Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Question
Chapter 18, Problem 27P
To determine
Identify the correct option out of the given statements.
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Students have asked these similar questions
The correct answer is letter B. How did they get the 7,500,000 answer?
Melton Devices acquires Beck, a small start-up company, by paying $2,170,900 in cash on January 2. Following are the book values and fair values of Beck on the date of acquisition.
(Click the icon to view the book values and fair values.)
Read the requirements.
Requirement a. What is the amount of goodwill acquired?
The amount of goodwill acquired
Requirement b. What intangible assets are acquired? Which of the intangibles have an indefinite life? Which will be amortized? What will the amortization expense be in the year after acquisition? (If an input field
is not used in the table leave the field empty, do not enter a zero)
Intangible
Asset
Finite or
Indefinite Life
Amortization
Amortized?
Expense
Trial Balance
Beck
Book Value
Fair Value
Cash
$
29,000 $
29,000
Receivables
100,700
100,650
Manufacturing Equipment
640,350
654,500
Patents (remaining life 8 years)
60,600
684,000
Trademarks
14,650
187,500
Payables
58,904
58,904
Print
Done
Carmela Company acquired a financial instrument for P4,000,000 on March 31, 2020. The financial
instrument is classified at financial asset at fair value through other comprehensive income. The direct
acquisition costs incurred amounted to P700,000. On December 31, 2020, the fair value of the instrument
was P5,500,000 and the transaction costs that would be incurred on the sale of the investment are
estimated at P600,000. What gain should be recognized in the other comprehensive income for the year
ended December 31, 2020?
a.Nil
b.P900,000
c.P800,000
d.P200,000
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