Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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In a pre-2009 business combination, Acme Company acquired all of Brem Company's assets and liabilities for cash.
After the combination, Acme formally dissolved Brem. At the acquisition date, the following book and fair values were
available for the Brem Company accounts:
Items
Current assets
Equipment
Trademark
Liabilities
View transaction list
Book Values
$ 88,400
131,000
Common stock
Retained earnings
In addition, Acme paid an investment bank $29,200 cash for assistance in arranging the combination.
(74,400)
(100,000)
(45,000)
Required:
a. Using the legacy purchase method for pre-2009 business combinations, prepare Acme's entry to record its
acquisition of Brem in its accounting records assuming the cash amounts of $668,400 and $457,400 were paid to the
former owners of Brem.
b. How would these journal entries change if the acquisition occurred post-2009 and therefore Acme applied the
acquisition method?
Note: If no entry is required for a transaction/event, select "No Journal entry…
Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2018, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts:Prepare Allerton’s entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts:1. $145,000.2. $110,000.
On August 27, 2015, Celgene Corporation acquired all of the outstanding stock of Receptos, Inc., in exchange for $7.6 billion in cash. Referring to Celgene's 2015 financial statements and its July 14, 2015, press release announcing the acquisition, answer the following questions regarding the Receptos acquisition.
What amount did Celgene include in pre-combination service compensation in the total consideration transferred? What support is provided for this treatment in the Accounting Standards Codification (see ASC 805-30-30, paragraphs 9-l3)?
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