Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill . To compute: The amount of common stock reported immediately following the business combination.

Question

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Answer 1

Question

Chapter 1, Problem 1.11E

a.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute:The amount of common stock reported immediately following the business combination.

a.

Expert Solution

Explanation of Solution

Calculate the amount of common stock reported immediately following the business combination:

Particulars	Amount ($)
Existing Common Stock	200,000
Add: Common Stock issued in exchange for net assets	(8,000×10) 80,000
Total common stock to be reported	280,000

Table (1)

b.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of cash and receivables reported immediately following the business combination.

b.

Expert Solution

Explanation of Solution

Calculate the amount of cash and receivables reported immediately following the business combination:

Particulars	Amount ($)
Existing Cash and Receivables	150,000
Add: Fair value of Cash and Receivables acquired	40,000
Total Cash and Receivables reported	190,000

Table (2)

c.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of land reported immediately following the business combination.

c.

Expert Solution

Explanation of Solution

Compute the amount of land reported immediately following the business combination:

Particulars	Amount ($)
Existing Land	100,000
Add: Fair value of Land acquired	85,000
Total Land reported	185,000

Table (3)

d.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of building and equipment reported immediately following the business combination.

d.

Expert Solution

Explanation of Solution

Compute the amount of building and equipment reported immediately following the business combination:

Particulars	Amount ($)
Existing Building and Equipment	300,000
Add: Fair value of Building and Equipment acquired	230,000
Total Building and Equipment reported	530,000

Table (4)

e.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of goodwill reported immediately following the business combination.

e.

Expert Solution

Explanation of Solution

Compute the amount of goodwill reported immediately following the business combination:

Particulars	Amount ($)
Consideration	(8,000×50) 400,000
Less: Fair value net assets acquired	355,000
Goodwill	45,000

Table (5)

f.

To determine

To compute: The amount of additional paid-in capital reported immediately following the business combination.

Introduction:Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

f.

Expert Solution

Explanation of Solution

Calculate the amount of additional paid-in capital reported immediately following the business combination:

Particulars	Amount ($)
Fair value net assets acquired	355,000
Add: Goodwill	45,000
Total Consideration	400,000
Less: Common Stock issued	80,000
Additional Paid-in Capital raised	320,000
Add: Existing Paid-in Capital	20,000
Total Additional Paid-in Capital Reported	340,000

Table (6)

g.

To determine

To compute: The amount of retained earnings reported immediately following the business combination.

Introduction:Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

g.

Expert Solution

Explanation of Solution

The amount of retained earnings would continue to be at its existing level of $330,000 immediately following the business combination.

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Students have asked these similar questions

P Company issues Php500,000 shares of its own Php10 par common stock for the net assets of S Company in a merger consummated on July 1, 2020. On this date, P stock is quoted at P20 per share. Summary of Balance sheet data for the two companies at July 1, 2020, just before combination, are as follows: P S Current Assets Plant Assets Total Assets 18,000,000 22,000,000 40,000,000 12,000,000 20,000,000 3,000,000 5,000,000 40,000,000 1,500,000 6,500,000 8,000,000 2,000,000 3,000,000 1,000,000 2,000,000 8,000,000 Liabilities Common Stock, P10 par Share Premium Retained Earnings Total Equities What is the total assets after of P after the business combination?

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Answer 2

Question

Chapter 1, Problem 1.11E

a.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute:The amount of common stock reported immediately following the business combination.

a.

Expert Solution

Explanation of Solution

Calculate the amount of common stock reported immediately following the business combination:

Particulars	Amount ($)
Existing Common Stock	200,000
Add: Common Stock issued in exchange for net assets	(8,000×10) 80,000
Total common stock to be reported	280,000

Table (1)

b.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of cash and receivables reported immediately following the business combination.

b.

Expert Solution

Explanation of Solution

Calculate the amount of cash and receivables reported immediately following the business combination:

Particulars	Amount ($)
Existing Cash and Receivables	150,000
Add: Fair value of Cash and Receivables acquired	40,000
Total Cash and Receivables reported	190,000

Table (2)

c.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of land reported immediately following the business combination.

c.

Expert Solution

Explanation of Solution

Compute the amount of land reported immediately following the business combination:

Particulars	Amount ($)
Existing Land	100,000
Add: Fair value of Land acquired	85,000
Total Land reported	185,000

Table (3)

d.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of building and equipment reported immediately following the business combination.

d.

Expert Solution

Explanation of Solution

Compute the amount of building and equipment reported immediately following the business combination:

Particulars	Amount ($)
Existing Building and Equipment	300,000
Add: Fair value of Building and Equipment acquired	230,000
Total Building and Equipment reported	530,000

Table (4)

e.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of goodwill reported immediately following the business combination.

e.

Expert Solution

Explanation of Solution

Compute the amount of goodwill reported immediately following the business combination:

Particulars	Amount ($)
Consideration	(8,000×50) 400,000
Less: Fair value net assets acquired	355,000
Goodwill	45,000

Table (5)

f.

To determine

To compute: The amount of additional paid-in capital reported immediately following the business combination.

Introduction:Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

f.

Expert Solution

Explanation of Solution

Calculate the amount of additional paid-in capital reported immediately following the business combination:

Particulars	Amount ($)
Fair value net assets acquired	355,000
Add: Goodwill	45,000
Total Consideration	400,000
Less: Common Stock issued	80,000
Additional Paid-in Capital raised	320,000
Add: Existing Paid-in Capital	20,000
Total Additional Paid-in Capital Reported	340,000

Table (6)

g.

To determine

To compute: The amount of retained earnings reported immediately following the business combination.

Introduction:Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

g.

Expert Solution

Explanation of Solution

The amount of retained earnings would continue to be at its existing level of $330,000 immediately following the business combination.

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Answer 3

Question

Chapter 1, Problem 1.11E

a.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute:The amount of common stock reported immediately following the business combination.

a.

Expert Solution

Explanation of Solution

Calculate the amount of common stock reported immediately following the business combination:

Particulars	Amount ($)
Existing Common Stock	200,000
Add: Common Stock issued in exchange for net assets	(8,000×10) 80,000
Total common stock to be reported	280,000

Table (1)

b.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of cash and receivables reported immediately following the business combination.

b.

Expert Solution

Explanation of Solution

Calculate the amount of cash and receivables reported immediately following the business combination:

Particulars	Amount ($)
Existing Cash and Receivables	150,000
Add: Fair value of Cash and Receivables acquired	40,000
Total Cash and Receivables reported	190,000

Table (2)

c.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of land reported immediately following the business combination.

c.

Expert Solution

Explanation of Solution

Compute the amount of land reported immediately following the business combination:

Particulars	Amount ($)
Existing Land	100,000
Add: Fair value of Land acquired	85,000
Total Land reported	185,000

Table (3)

d.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of building and equipment reported immediately following the business combination.

d.

Expert Solution

Explanation of Solution

Compute the amount of building and equipment reported immediately following the business combination:

Particulars	Amount ($)
Existing Building and Equipment	300,000
Add: Fair value of Building and Equipment acquired	230,000
Total Building and Equipment reported	530,000

Table (4)

e.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of goodwill reported immediately following the business combination.

e.

Expert Solution

Explanation of Solution

Compute the amount of goodwill reported immediately following the business combination:

Particulars	Amount ($)
Consideration	(8,000×50) 400,000
Less: Fair value net assets acquired	355,000
Goodwill	45,000

Table (5)

f.

To determine

To compute: The amount of additional paid-in capital reported immediately following the business combination.

Introduction:Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

f.

Expert Solution

Explanation of Solution

Calculate the amount of additional paid-in capital reported immediately following the business combination:

Particulars	Amount ($)
Fair value net assets acquired	355,000
Add: Goodwill	45,000
Total Consideration	400,000
Less: Common Stock issued	80,000
Additional Paid-in Capital raised	320,000
Add: Existing Paid-in Capital	20,000
Total Additional Paid-in Capital Reported	340,000

Table (6)

g.

To determine

To compute: The amount of retained earnings reported immediately following the business combination.

Introduction:Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

g.

Expert Solution

Explanation of Solution

The amount of retained earnings would continue to be at its existing level of $330,000 immediately following the business combination.

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Answer 4

Question

Chapter 1, Problem 1.11E

a.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute:The amount of common stock reported immediately following the business combination.

a.

Expert Solution

Explanation of Solution

Calculate the amount of common stock reported immediately following the business combination:

Particulars	Amount ($)
Existing Common Stock	200,000
Add: Common Stock issued in exchange for net assets	(8,000×10) 80,000
Total common stock to be reported	280,000

Table (1)

b.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of cash and receivables reported immediately following the business combination.

b.

Expert Solution

Explanation of Solution

Calculate the amount of cash and receivables reported immediately following the business combination:

Particulars	Amount ($)
Existing Cash and Receivables	150,000
Add: Fair value of Cash and Receivables acquired	40,000
Total Cash and Receivables reported	190,000

Table (2)

c.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of land reported immediately following the business combination.

c.

Expert Solution

Explanation of Solution

Compute the amount of land reported immediately following the business combination:

Particulars	Amount ($)
Existing Land	100,000
Add: Fair value of Land acquired	85,000
Total Land reported	185,000

Table (3)

d.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of building and equipment reported immediately following the business combination.

d.

Expert Solution

Explanation of Solution

Compute the amount of building and equipment reported immediately following the business combination:

Particulars	Amount ($)
Existing Building and Equipment	300,000
Add: Fair value of Building and Equipment acquired	230,000
Total Building and Equipment reported	530,000

Table (4)

e.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of goodwill reported immediately following the business combination.

e.

Expert Solution

Explanation of Solution

Compute the amount of goodwill reported immediately following the business combination:

Particulars	Amount ($)
Consideration	(8,000×50) 400,000
Less: Fair value net assets acquired	355,000
Goodwill	45,000

Table (5)

f.

To determine

To compute: The amount of additional paid-in capital reported immediately following the business combination.

Introduction:Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

f.

Expert Solution

Explanation of Solution

Calculate the amount of additional paid-in capital reported immediately following the business combination:

Particulars	Amount ($)
Fair value net assets acquired	355,000
Add: Goodwill	45,000
Total Consideration	400,000
Less: Common Stock issued	80,000
Additional Paid-in Capital raised	320,000
Add: Existing Paid-in Capital	20,000
Total Additional Paid-in Capital Reported	340,000

Table (6)

g.

To determine

To compute: The amount of retained earnings reported immediately following the business combination.

Introduction:Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

g.

Expert Solution

Explanation of Solution

The amount of retained earnings would continue to be at its existing level of $330,000 immediately following the business combination.

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Answer 5

Chapter 1, Problem 1.11E

a.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute:The amount of common stock reported immediately following the business combination.

a.

Expert Solution

Explanation of Solution

Calculate the amount of common stock reported immediately following the business combination:

Particulars	Amount ($)
Existing Common Stock	200,000
Add: Common Stock issued in exchange for net assets	(8,000×10) 80,000
Total common stock to be reported	280,000

Table (1)

b.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of cash and receivables reported immediately following the business combination.

b.

Expert Solution

Explanation of Solution

Calculate the amount of cash and receivables reported immediately following the business combination:

Particulars	Amount ($)
Existing Cash and Receivables	150,000
Add: Fair value of Cash and Receivables acquired	40,000
Total Cash and Receivables reported	190,000

Table (2)

c.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of land reported immediately following the business combination.

c.

Expert Solution

Explanation of Solution

Compute the amount of land reported immediately following the business combination:

Particulars	Amount ($)
Existing Land	100,000
Add: Fair value of Land acquired	85,000
Total Land reported	185,000

Table (3)

d.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of building and equipment reported immediately following the business combination.

d.

Expert Solution

Explanation of Solution

Compute the amount of building and equipment reported immediately following the business combination:

Particulars	Amount ($)
Existing Building and Equipment	300,000
Add: Fair value of Building and Equipment acquired	230,000
Total Building and Equipment reported	530,000

Table (4)

e.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of goodwill reported immediately following the business combination.

e.

Expert Solution

Explanation of Solution

Compute the amount of goodwill reported immediately following the business combination:

Particulars	Amount ($)
Consideration	(8,000×50) 400,000
Less: Fair value net assets acquired	355,000
Goodwill	45,000

Table (5)

f.

To determine

To compute: The amount of additional paid-in capital reported immediately following the business combination.

Introduction:Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

f.

Expert Solution

Explanation of Solution

Calculate the amount of additional paid-in capital reported immediately following the business combination:

Particulars	Amount ($)
Fair value net assets acquired	355,000
Add: Goodwill	45,000
Total Consideration	400,000
Less: Common Stock issued	80,000
Additional Paid-in Capital raised	320,000
Add: Existing Paid-in Capital	20,000
Total Additional Paid-in Capital Reported	340,000

Table (6)

g.

To determine

To compute: The amount of retained earnings reported immediately following the business combination.

Introduction:Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

g.

Expert Solution

Explanation of Solution

The amount of retained earnings would continue to be at its existing level of $330,000 immediately following the business combination.

Answer 6

Chapter 1, Problem 1.11E

a.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute:The amount of common stock reported immediately following the business combination.

a.

Expert Solution

Explanation of Solution

Calculate the amount of common stock reported immediately following the business combination:

Particulars	Amount ($)
Existing Common Stock	200,000
Add: Common Stock issued in exchange for net assets	(8,000×10) 80,000
Total common stock to be reported	280,000

Table (1)

Answer 7

Chapter 1, Problem 1.11E

a.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute:The amount of common stock reported immediately following the business combination.

Answer 8

a.

Expert Solution

Explanation of Solution

Calculate the amount of common stock reported immediately following the business combination:

Particulars	Amount ($)
Existing Common Stock	200,000
Add: Common Stock issued in exchange for net assets	(8,000×10) 80,000
Total common stock to be reported	280,000

Table (1)

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

b.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of cash and receivables reported immediately following the business combination.

b.

Expert Solution

Explanation of Solution

Calculate the amount of cash and receivables reported immediately following the business combination:

Particulars	Amount ($)
Existing Cash and Receivables	150,000
Add: Fair value of Cash and Receivables acquired	40,000
Total Cash and Receivables reported	190,000

Table (2)

Answer 13

b.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of cash and receivables reported immediately following the business combination.

Answer 14

b.

Expert Solution

Explanation of Solution

Calculate the amount of cash and receivables reported immediately following the business combination:

Particulars	Amount ($)
Existing Cash and Receivables	150,000
Add: Fair value of Cash and Receivables acquired	40,000
Total Cash and Receivables reported	190,000

Table (2)

Answer 15

b.

Expert Solution

Answer 16

b.

Expert Solution

Answer 17

Expert Solution

Answer 18

c.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of land reported immediately following the business combination.

c.

Expert Solution

Explanation of Solution

Compute the amount of land reported immediately following the business combination:

Particulars	Amount ($)
Existing Land	100,000
Add: Fair value of Land acquired	85,000
Total Land reported	185,000

Table (3)

Answer 19

c.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of land reported immediately following the business combination.

Answer 20

c.

Expert Solution

Explanation of Solution

Compute the amount of land reported immediately following the business combination:

Particulars	Amount ($)
Existing Land	100,000
Add: Fair value of Land acquired	85,000
Total Land reported	185,000

Table (3)

Answer 21

c.

Expert Solution

Answer 22

c.

Expert Solution

Answer 23

Expert Solution

Answer 24

d.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of building and equipment reported immediately following the business combination.

d.

Expert Solution

Explanation of Solution

Compute the amount of building and equipment reported immediately following the business combination:

Particulars	Amount ($)
Existing Building and Equipment	300,000
Add: Fair value of Building and Equipment acquired	230,000
Total Building and Equipment reported	530,000

Table (4)

Answer 25

d.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of building and equipment reported immediately following the business combination.

Answer 26

d.

Expert Solution

Explanation of Solution

Compute the amount of building and equipment reported immediately following the business combination:

Particulars	Amount ($)
Existing Building and Equipment	300,000
Add: Fair value of Building and Equipment acquired	230,000
Total Building and Equipment reported	530,000

Table (4)

Answer 27

d.

Expert Solution

Answer 28

d.

Expert Solution

Answer 29

Expert Solution

Answer 30

e.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of goodwill reported immediately following the business combination.

e.

Expert Solution

Explanation of Solution

Compute the amount of goodwill reported immediately following the business combination:

Particulars	Amount ($)
Consideration	(8,000×50) 400,000
Less: Fair value net assets acquired	355,000
Goodwill	45,000

Table (5)

Answer 31

e.

To determine

Introduction: Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

To compute: The amount of goodwill reported immediately following the business combination.

Answer 32

e.

Expert Solution

Explanation of Solution

Compute the amount of goodwill reported immediately following the business combination:

Particulars	Amount ($)
Consideration	(8,000×50) 400,000
Less: Fair value net assets acquired	355,000
Goodwill	45,000

Table (5)

Answer 33

e.

Expert Solution

Answer 34

e.

Expert Solution

Answer 35

Expert Solution

Answer 36

f.

To determine

To compute: The amount of additional paid-in capital reported immediately following the business combination.

Introduction:Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

f.

Expert Solution

Explanation of Solution

Calculate the amount of additional paid-in capital reported immediately following the business combination:

Particulars	Amount ($)
Fair value net assets acquired	355,000
Add: Goodwill	45,000
Total Consideration	400,000
Less: Common Stock issued	80,000
Additional Paid-in Capital raised	320,000
Add: Existing Paid-in Capital	20,000
Total Additional Paid-in Capital Reported	340,000

Table (6)

Answer 37

f.

To determine

To compute: The amount of additional paid-in capital reported immediately following the business combination.

Introduction:Acquisition of Net Assets is a process in which the acquiring company acquires all the assets and liabilities of the acquired company in exchange for consideration. In this process, the acquiring company records all identifiable assets and liabilities at fair values and any excess of the consideration paid over fair value is recognized as goodwill.

Answer 38

f.

Expert Solution

Explanation of Solution

Calculate the amount of additional paid-in capital reported immediately following the business combination:

Particulars	Amount ($)
Fair value net assets acquired	355,000
Add: Goodwill	45,000
Total Consideration	400,000
Less: Common Stock issued	80,000
Additional Paid-in Capital raised	320,000
Add: Existing Paid-in Capital	20,000
Total Additional Paid-in Capital Reported	340,000