INTERMEDIATE ACCOUNTING ACCESS 540 DAY
10th Edition
ISBN: 9781264706327
Author: SPICELAND
Publisher: MCG
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Chapter 10, Problem 10.7E
To determine
Goodwill is an intangible asset. It is defined as the excess of cost of an acquired company over the fair value of its net assets. Net assets are the difference between the total assets and the total liabilities. The value of the goodwill is the unique features of the company such as the location of the company, its efficient employees, and its reputation, which cannot be associated with any specific asset of the Company.
To Calculate: The amount paid for the goodwill.
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Problem 4
Archibald Corporation, a public corporation exchanged an asset with Bass Industries.
Archibald
Bass
$ 320,000 $
430,000
Original cost of the asset
Accumulated depreciation
$
256,000 $
344,000
Fair value of the asset
$
80,000 $
120,000
9 Required-
10 a) Prepare the journal entries on the books of Archibald Corp assuming that the exchange would have commercial substance.
11 b) Prepare the journal entries on the books of Archibald Corp assuming that the exchange would have no commercial substance.
12
13 RESPONSE:
14
15
Debit
Credit
Date
a)
Account Name
New Asset
16
17
18
+
ces
Mc
Graw
Hill
Problem 7-3B (Algo) Calculate and record goodwill (LO7-2)
Northern Equipment Corporation purchased all the outstanding common stock of Pioneer Equipment Rental for
$5,590,000 in cash. The book values and fair values of Pioneer's assets and liabilities were as follows:
Accounts Receivable $ 740,000
Book Value
Fair Value
$ 640,000
Buildings
4,090,000
4,790,000
Equipment
100,000 190,000
Accounts Payable
(760,000)
(760,000)
$
$
Net assets
4,170,000
4,860,000
Required:
1. Calculate the amount Northern Equipment should report for goodwill.
2. Record Northern Equipment's acquisition of Pioneer Equipment Rental.
Complete this question by entering your answers in the tabs below.
Required Required
1
2
Record Northern Equipment's acquisition of Pioneer Equipment Rental. (If no entry is required for a
transaction/event, select "No Journal Entry Required" in the first account field.)
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Journal entry worksheet
<
1
Record the acquisition of Pioneer Equipment…
Hi there, can help with answering the attached questions, thanks so much.
Chapter 10 Solutions
INTERMEDIATE ACCOUNTING ACCESS 540 DAY
Ch. 10 - Prob. 10.1QCh. 10 - Prob. 10.2QCh. 10 - Prob. 10.3QCh. 10 - Prob. 10.4QCh. 10 - Prob. 10.5QCh. 10 - Prob. 10.6QCh. 10 - When an asset is acquired and a note payable is...Ch. 10 - Explain how assets acquired in exchange for equity...Ch. 10 - Prob. 10.9QCh. 10 - What account is credited when a company receives...
Ch. 10 - Prob. 10.11QCh. 10 - Identify the two exceptions to valuing property,...Ch. 10 - In what situations is interest capitalized?Ch. 10 - Define average accumulated expenditures and...Ch. 10 - Explain the difference between the specific...Ch. 10 - Prob. 10.16QCh. 10 - Prob. 10.17QCh. 10 - Explain the accounting treatment of costs incurred...Ch. 10 - Explain the difference in the accounting treatment...Ch. 10 - Prob. 10.20QCh. 10 - Prob. 10.21QCh. 10 - Prob. 10.22QCh. 10 - Prob. 10.23QCh. 10 - Acquisition cost; machine LO101 Beavert on Lumber...Ch. 10 - Prob. 10.2BECh. 10 - Prob. 10.3BECh. 10 - Cost of a natural resource; asset retirement...Ch. 10 - Asset retirement obligation LO101 Refer to the...Ch. 10 - Prob. 10.6BECh. 10 - Prob. 10.8BECh. 10 - Prob. 10.11BECh. 10 - Nonmonetary exchange LO106 Refer to the situation...Ch. 10 - Nonmonetary exchange LO106 Refer to the situation...Ch. 10 - Prob. 10.14BECh. 10 - Prob. 10.15BECh. 10 - Research and development LO108 Maxtor Technology...Ch. 10 - Prob. 10.18BECh. 10 - Prob. 10.19BECh. 10 - Research and development; various types LO108...Ch. 10 - Prob. 10.21BECh. 10 - Acquisition cost; equipment LO101 Oaktree Company...Ch. 10 - Prob. 10.3ECh. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - Acquisition costs; noninterest-bearing note ...Ch. 10 - Prob. 10.11ECh. 10 - Prob. 10.14ECh. 10 - Nonmonetary exchange LO106 [This is a variation...Ch. 10 - Prob. 10.16ECh. 10 - Nonmonetary exchange LO106 [This is a variation...Ch. 10 - Prob. 10.18ECh. 10 - Prob. 10.19ECh. 10 - Prob. 10.20ECh. 10 - FASB codification research LO101, LO106, LO107,...Ch. 10 - Prob. 10.30ECh. 10 - Prob. 10.31ECh. 10 - Prob. 10.32ECh. 10 - Intangibles; start-up costs LO101, LO108 Freitas...Ch. 10 - Prob. 10.1PCh. 10 - Prob. 10.4PCh. 10 - Acquisition costs; journal entries LO101, LO103,...Ch. 10 - Prob. 10.6PCh. 10 - Prob. 10.8PCh. 10 - Prob. 10.9PCh. 10 - Judgment Case 101 Acquisition costs LO101, LO103,...Ch. 10 - Judgment Case 104 Interest capitalization LO107...Ch. 10 - Prob. 10.6DMPCh. 10 - Prob. 10.7DMPCh. 10 - Judgment Case 108 Research and development LO108...Ch. 10 - Prob. 10.9DMPCh. 10 - Prob. 10.11DMPCh. 10 - Prob. 10.13DMPCh. 10 - Prob. 10.15DMPCh. 10 - Prob. 10.16DMP
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- Mini-Exercise 6-7 (Algo) Goodwill LO 6-9 Backstreets Company recently acquired all of Jungleland Incorporated's net assets in a business acquisition. The cash purchase price was $9.1 million. Jungleland's assets and liabilities had the following appraised values immediately prior to the acquisition: land, $2.5 million; buildings, $4.2 million; inventory, $3.0 million; long-term notes payable, for which Backstreets Company assumes payment responsibilities, $2.3 million. Required: How much goodwill will result from this transaction? Note: Enter your answer in whole dollars. Goodwillarrow_forward1 2 3 On April 30, 2024, Cardamom Corporation acquired all of the outstanding common stock of Killarney Corporation for $18,000,000 in cash. The book values and fair values of Killarney's assets and liabilities were as follows: 4 S 6 7 Amount paid for all of the outstanding common stock 8 9 10 Current assets 11 Property, plant, and equipment 12 Other assets 13 Current liabilities 14 Long-term liabilities 15 16 Calculate the amount paid for goodwill. 17 678 18 19 20 Book Value $6,000,000 11,400,000 1,200,000 3,600,000 6,120,000 $18,000,000 Fair Value $7,800,000 14,820,000 1,560,000 3,600,000 5,810,000arrow_forwardLO 9 Assets Cash + Patent + 94,000 ΝΑ + + Exercise 8-20A Computing and recording the amortization of intangibles Texas Manufacturing paid cash to purchase the assets of an existing company. Among the assets purchased were the following items: Goodwill ΝΑ Texas's financial condition just prior to the purchase of these assets is shown in the following statements model: = Patent with 5 remaining years of legal life Goodwill Liab. ΝΑ Equity Rev. + 94,000 ΝΑ Exp. $36,000 40,000 ΝΑ = Net Inc. = ΝΑ Cash Flow ΝΑ Required a. Compute the annual amortization expense for these items if applicable. b. Record the purchase of the intangible assets and the related amortization expense for year 1 in a horizontal statements model like the preceding one. c. Prepare the journal entries to record the purchase of the intangible assets and the related amortization for year 1.arrow_forward
- 25arrow_forwardQuestio n 12 On July 1, 2020 , Brandon SE purchased Mills Company by paying $140,000 cash. On July 1, 2020, the fair value of the net assets of Mills Company was as follows. Buildings (net) $ 30,000 Patent 8,000 Land 25,000 Accounts receivable 12,000 Cash 50,000 Accounts payable 10,000 What is the amount of goodwill to be reported at Brandon's statement of financial position on 31/12/2019? 25000 15000 Zero 35000 37°C Haze e to search DELLarrow_forwardMC12 Mega Company and its subsidiaries have a provided you with a list of property items they own: Land held by Mega for undetermined future P10 million use A vacant building owned by Mega and to be leased out under an operating lease Property held by a subsidiary of Mega, a real estate firm, in the ordinary course of business Property held by Mega for use in production A hotel owned by Mega's subsidiary; the subsidiary also provides security services to its guests A building owned by Mega being leased out to Vega, one of Mega's subsidiaries, under operating leases 20 million 50 million 12 million 60 million 25 million What amount shall be shown as Investment Property in the consolidated statement of financial position of Mega and its subsidiaries? P20 million P30 million a. b. P85 million P90 million с. d.arrow_forward
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