Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
5th Edition
ISBN: 9780134078939
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 9, Problem 9.34AP
1.
To determine
To Journalize: the purchase of S Company by M Company.
2.
To determine
To name: the special asset that M Company’s acquisition of S Company identifies.
To determine
To explain: the accounting of goodwill after acquiring S Company.
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Accounting for intangibles
Core Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Core purchased goodwill as part of the acquisition of Surety Wireless Company, which had the following figures:
Requirements
Journalize the entry to record Core’s purchase of Surety Wireless for $280,000 cash plus a $420,000 note payable.
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Accounting for intangibles
Midland States Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Midland States Telecom purchased goodwill as part of the acquisition of Sheldon Wireless Enterprises, which had the following figures:
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Journalize the entry to record Midland States Telecom’s purchase of Sheldon Wireless for $440,000 cash plus a $660,000 note payable.
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Heartland Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Heartland Telecom purchased goodwill as part of the acquisition of Samson Wireless Enterprises, which had the following figures:
Data table:
Book value of assets
$800,000
Market value of assets
900,000
Market value of liabilities
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1.
Journalize the entry to record Heartland Telecom's purchase of SamsonSamson Wireless for $400,000cash plus a $600,000 note payable.
2.
What special asset does
Heartland Telecom'sHeartland Telecom's
acquisition of
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HeartlandHeartland
Telecom account for this asset after acquiring
SamsonSamson
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Chapter 9 Solutions
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
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