VMware, Inc. is a subsidiary of Dell Technologies Inc.. providing customers with IT resource management. In fiscal 2020, VMware acquired Avi Networks, Inc., a provider of multi- cloud application delivery services, for $335 million. This price reflected goodwill of $228 million and identifiable intangible assets of $94 million. Assume that VMware paid the acquisition price in cash, and also incurred $10 million in acquisition-related legal and advisory services, paid in cash. Required a. What was the fair value of tangible net assets, if any, that VMware recognized at the date of acquisition? Note: Provide all answers in millions million b. Prepare the journal entry to record this business combination. Debit > > > > > Credit

VMware, Inc. is a subsidiary of Dell Technologies Inc.. providing customers with IT resource management. In fiscal 2020, VMware acquired Avi Networks, Inc., a provider of multi- cloud application delivery services, for $335 million. This price reflected goodwill of $228 million and identifiable intangible assets of $94 million. Assume that VMware paid the acquisition price in cash, and also incurred $10 million in acquisition-related legal and advisory services, paid in cash. Required a. What was the fair value of tangible net assets, if any, that VMware recognized at the date of acquisition? Note: Provide all answers in millions million b. Prepare the journal entry to record this business combination. Debit > > > > > Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, 2021, Access IT Company exchanged $1,000,000 for 40 percent of the outstanding voting stock of Net Connect. Especially attractive to Access IT was a research project underway at Net Connect that would enhance both the speed and quantity of client-accessible data. Although not recorded in Net Connect’s financial records, the fair value of the research project was considered to be $1,960,000. In contractual agreements with the sole owner of the remaining 60 percent of Net Connect, Access IT was granted (1) various decision-making rights over Net Connect’s operating decisions and (2) special service purchase provisions at below-market rates. As a result of these contractual agreements, Access IT established itself as the primary beneficiary of Net Connect. Immediately after the purchase, Access IT and Net Connect presented the following balance sheets: (Note: Parentheses indicate credit balances.) Each of the above amounts represents a fair value at January 1, 2021. The…
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