Rivendell Corporation and Foster Company merged as of January 1, 2009. To effect the merger, Rivendell paid finder's fees of $40,000, legal fees of $13,000, audit fees related to the stock issuance of $10,000, stock registration fees of $5,000, and stock listing application fees of $4,000.
32. Using the preceding information, what amount would have been
expensed if the purchase method of accounting was used?
A. $0
B. $19,000
C. $53,000
D. $72,000
*I know the answer is $0 but if you can please show computations for that answer.
33. Using the preceding information, what amount would have been
expensed if the pooling-of-interests method of accounting was
used?
A. $0
B. $19,000
C. $53,000
D. $72,000
*I know the answer is $72,000 but if you can please show computations for that answer.
Following its acquisition of the net assets of Dan Company, Empire Company assigned goodwill of $60,000 to one of the reporting divisions. Information for this division follows:
20. Based on the preceding information, what amount of goodwill
impairment will be recognized for this division if its fair value
is determined to be $195,000?
A. $5,000
B. $30,000
C. $60,000
D. $55,000
*I know the answer is $55,000 but if you can please show computations for that answer.
Homework Answers
| Ans | ||||||||||||
| 32 | Purchase method of accounting | |||||||||||
| In above method all assets & liabilty of target company are recorded in acquiring company at its fair market value on date of transfer. | ||||||||||||
| Hence in this case no expenses will be recorded, and assets & liability of acuirer compay are recorded | ||||||||||||
| Hence answer is A. $0 | ||||||||||||
| 33 | pooling-of-interests method | |||||||||||
| In above method all assets & liabilty of target company are recorded in acquiring company at its carrying value on date of transfer. | ||||||||||||
| and assets & liability of both compay are recorded | ||||||||||||
| Hence answer is D. $72000 (40000+13000+10000+5000+4000) | ||||||||||||
| 20 | Current fair value | |||||||||||
| Cash | 20000 | |||||||||||
| Inventory | 40000 | |||||||||||
| Equipment | 160000 | |||||||||||
| Account Payable | -30000 | |||||||||||
| Net Fair Value | 190000 | |||||||||||
| New Fair value | 195000 | |||||||||||
| Difference | 5000 | |||||||||||
| Goodwill will be reduced by 5000 as the fair value has increase by 5000 | ||||||||||||
| Hence revised impairement of goodwill will be recognised as 60000-5000=55000 | ||||||||||||
| Hence answer is D. $55000 | ||||||||||||
Add Answer to:
Rivendell Corporation and Foster Company merged as of January 1,
2009. To effect the merger, Rivendell...
Following its acquisition of the net assets of Dan Company, Empire Company assigned goodwill of $60,000...
Following its acquisition of the net assets of Dan Company, Empire Company assigned goodwill of $60,000 to one of the reporting divisions. Information for this division follows: Carrying Amount Fair Value Cash $ 20,000 $ 20,000 Inventory 35,000 40,000 Equipment 125,000 160,000 Goodwill 60,000 Accounts Payable 30,000 30,000 31) Based on the preceding information, what amount of goodwill will be reported for this division – after any necessary impairments – if the fair value of the entire reporting unit is...
Pursuing an inorganic growth strategy, Wilson Company acquired Venus Company's net assets and assigned them to...
Pursuing an inorganic growth strategy, Wilson Company acquired
Venus Company's net assets and assigned them to four separate
reporting divisions. Wilson assigned total goodwill of $134,000 to
the four reporting divisions as given below:
25. Based on the preceding information, what amount of goodwill
will be reported for Alpha at year-end?
A. $0
B. $20,000
C. $30,000
D. $10,000
*I know the answer is $20,000 but if you can please show
computations for that answer.
26. Based on the preceding...
Octane Company and Bio Company have announced terms of an exchange agreement under which Octane will...
Octane Company and Bio Company have announced terms of an
exchange agreement under which Octane will issue 10,000 shares of
its $5 par value common stock to acquire all of Bio's assets.
Octane shares are trading at $28, and Bio's $10 par value shares
are trading at $15. Historical cost and fair value balance sheet
data on January 1, 2008, are as follows:
12. Based on the information provided, what amount will be
reported immediately following the business combination for...
Plummet Corporation reported the book value of its net assets at $400,000 when Zenith Corporation acquired...
Plummet Corporation reported the book value of its net assets at $400,000 when Zenith Corporation acquired 100 percent ownership. The fair value of Plummet's net assets was determined to be $510,000 on that date. 9. Based on the preceding information, what amount of goodwill will be reported in consolidated financial statements presented immediately following the combination if Zenith paid $550,000 for the acquisition? A. $0 B. $50,000 C. $150,000 D. $40,000 *I know the answer is $40,000 but if you...
Plummet Corporation reported the book value of its net assets at $400,000 when Zenith Corporation acquired...
Plummet Corporation reported the book value of its net assets at $400,000 when Zenith Corporation acquired 100 percent ownership. The fair value of Plummet's net assets was determined to be $510,000 on that date. 9. Based on the preceding information, what amount of goodwill will be reported in consolidated financial statements presented immediately following the combination if Zenith paid $550,000 for the acquisition? A. $0 B. $50,000 C. $150,000 D. $40,000 *I know the answer is $40,000 but if you...
On January 1, 2007, Firewire Company acquired 40 percent of Browser Company's common stock. For this...
On January 1, 2007, Firewire Company acquired 40 percent of Browser Company's common stock. For this acquisition, Firewire paid $45,000 above book value. The full differential was attributed to equipment with a remaining life of ten years and zero salvage value at the date of acquisition. During 2007 and 2008, Browser reported net income of $90,000 and $50,000 and paid dividends of $40,000 and $60,000, respectively. Firewire reported a balance in its investment account of $230,000 on December 31, 2008....
Pace Corporation acquired 100 percent of Spin Company's common stock on January 1, 20X9. Balance sheet...
Pace Corporation acquired 100 percent of Spin Company's common stock on January 1, 20X9. Balance sheet data for the two companies immediately following the acquisition follows: Item Pace Corporation Spin Company Cash $ 30,000 $ 25,000 Accounts Receivable 80,000 40,000 Inventory 150,000 55,000 Land 65,000 40,000 Buildings and Equipment 260,000 160,000 Less: Accumulated Depreciation (120,000 ) (50,000 ) Investment in Spin Company Stock 150,000 Total Assets $ 615,000 $ 270,000 Accounts Payable $45,000 $33,000 Taxes Payable 20,000 8,000 Bonds Payable...
On January 1, 2007, Rotor Corporation acquired 30 percent of Stator Company's stock for $150,000. On...
On January 1, 2007, Rotor Corporation acquired 30 percent of Stator Company's stock for $150,000. On the acquisition date, Stator reported net assets of $450,000 valued at historical cost and $500,000 stated at fair value. The difference was due to the increased value of buildings with a remaining life of 15 years. During 2007 and 2008 Stator reported net income of $25,000 and $15,000 and paid dividends of $10,000 and $12,000, respectively. Rotor uses the equity method. 1. Based on...
objective question On December 31, 20X3, Saxe Corporation was merged into Poe Corporation. In the business...
objective question
On December 31, 20X3, Saxe Corporation was merged into Poe Corporation. In the business combination, Poe issued 200,000 shares of its $10 par common stock, with a market price of $18 a share, for all of Saxe's common stock. The stockholders' equity section of each company's balance sheet immediately before the combination was: Poe Saxe Common Stock Additional Paid-In Capital Retained Earnings $3,000,000 1,300,000 2,500,000 $6,800,000 $1,500,000 150,000 850,000 $2,500,000 In the December 31, 20X3, combined balance sheet,...
In order to reduce the risk associated with a new line of business, Conservative Corporation established...
In order to reduce the risk associated with a new line of
business, Conservative Corporation established Spin Company as a
wholly owned subsidiary. It transferred assets and accounts payable
to Spin in exchange for its common stock. Spin recorded the
following entry when the transaction occurred:
1. Based on the preceding information, what number of shares of
$7 par value stock did Spin issue to Conservative?
A. 10,000
B. 7,000
C. 8,000
D. 25,000
*I know the answer is...
Pursuing an inorganic growth strategy, Wilson Company acquired
Venus Company's net assets and assigned them to four separate
reporting divisions. Wilson assigned total goodwill of $134,000 to
the four reporting divisions as given below:
25. Based on the preceding information, what amount of goodwill
will be reported for Alpha at year-end?
A. $0
B. $20,000
C. $30,000
D. $10,000
*I know the answer is $20,000 but if you can please show
computations for that answer.
26. Based on the preceding...
Octane Company and Bio Company have announced terms of an
exchange agreement under which Octane will issue 10,000 shares of
its $5 par value common stock to acquire all of Bio's assets.
Octane shares are trading at $28, and Bio's $10 par value shares
are trading at $15. Historical cost and fair value balance sheet
data on January 1, 2008, are as follows:
12. Based on the information provided, what amount will be
reported immediately following the business combination for...
objective question
On December 31, 20X3, Saxe Corporation was merged into Poe Corporation. In the business combination, Poe issued 200,000 shares of its $10 par common stock, with a market price of $18 a share, for all of Saxe's common stock. The stockholders' equity section of each company's balance sheet immediately before the combination was: Poe Saxe Common Stock Additional Paid-In Capital Retained Earnings $3,000,000 1,300,000 2,500,000 $6,800,000 $1,500,000 150,000 850,000 $2,500,000 In the December 31, 20X3, combined balance sheet,...
In order to reduce the risk associated with a new line of
business, Conservative Corporation established Spin Company as a
wholly owned subsidiary. It transferred assets and accounts payable
to Spin in exchange for its common stock. Spin recorded the
following entry when the transaction occurred:
1. Based on the preceding information, what number of shares of
$7 par value stock did Spin issue to Conservative?
A. 10,000
B. 7,000
C. 8,000
D. 25,000
*I know the answer is...
Most questions answered within 3 hours.
-
The following standards for variable manufacturing overhead have
been established for a company that makes only...
asked 1 minute ago -
The United States government wanted to determine what proportion
of Americans approve of the current president,...
asked 16 minutes ago -
2-N stone is dropped from the top of a cliff. The stone hits the
ground 3...
asked 16 minutes ago -
Vitamins participate in metabolic reactions in their coenzyme
forms . Match the following reactions to the respective...
asked 18 minutes ago -
We have developed a new mobile device and wish to gain insight
into the price that...
asked 40 minutes ago -
12.8 ml of a solution is run into an empty flask, from a buret.
The mass...
asked 32 minutes ago -
Using java:
Use the following starter code:
public class HandsOn01 {
public //// insert your code...
asked 31 minutes ago -
Two speakers are placed along a wall 3 m apart. They are in
phase and emitting...
asked 43 minutes ago -
Determine the magnitude of the complex number z = 3 – j * 4
using the...
asked 37 minutes ago -
Why don’t we give poor people more cash welfare instead of
in-kind transfers like food stamps,...
asked 43 minutes ago -
Two companies, A and B, decide to acquire asset worth $15
million. Company A decides to...
asked 44 minutes ago -
The unknown sample from Part (a) was found to have a mass of
0.7041 g. The...
asked 1 hour ago