Homework Answers
Answer:
Net asset recognized is calculated on the basis of fair value of shares =5000 shares×$10 per share
=$50,000
So $50,000 is recognized as net assets due to this business combination.
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Accounting for a controlling financial interest An acquiring company issues 5,000 shares of $2 par value...
On July 1, 2012, an acquiring company Corp. paid $2,200,000 for 100% of the outstanding common...
On July 1, 2012, an acquiring company Corp. paid $2,200,000 for 100% of the outstanding common stock of an investee company in a transaction that qualifies as a business combination. Immediately preceding the transaction, the investee company had the following condensed balance sheet: Pre-acquisition amounts reported on investee's balance sheet Current assets $300,000 Property and equipment, net 2,800,000 Liabilities 1,500,000 Equity 1,600,000 The acquisition-date fair value of the property and equipment was $440,000 more than its carrying amount. For all...
On July 1, 2012, an acquiring company Corp. paid $1,100,000 for 100% of the outstanding common...
On July 1, 2012, an acquiring company Corp. paid $1,100,000 for 100% of the outstanding common stock of an investee company in a transaction that qualifies as a business combination. Immediately preceding the transaction, the investee company had the following condensed balance sheet: Pre-acquisition amounts reported on investee's balance sheet Current assets $150,000 Property and equipment, net 1,400,000 Liabilities 750,000 Equity 800,000 The acquisition-date fair value of the property and equipment was $220,000 more than its carrying amount. For all...
Review of pre-consolidation equity method (controlling investment in affiliate, fair value equals book value) Assume an...
Review of pre-consolidation equity method (controlling investment in affiliate, fair value equals book value) Assume an investee has the following financial statement information for the three years ending December 31, 2019: (At December 31) 2019 2018 2017 Current assets $285,000 $277,500 $207,000 Tangible fixed assets 662,500 575,000 563,000 Intangible assets 40,000 45,000 50,000 Total assets $987,500 $897,500 $820,000 Current liabilities $120,000 $110,000 $100,000 Noncurrent liabilities 266,250 242,500 220,000 Common stock 100,000 100,000 100,000 Additional paid-in capital 100,000 100,000 100,000 Retained...
Assume the Parent company acquires its subsidiary by exchanging 35,000 shares of its Common Stock, with...
Assume the Parent company acquires its subsidiary by exchanging 35,000 shares of its Common Stock, with a fair value on the acquisition date of $60 per share, for all of the outstanding voting shares of the investee. In its analysis of the investee company, the parent values all of the subsidiary’s assets and liabilities at an amount equaling their book values except for an unrecorded Patent owned by the subsidiary with a fair value of $200,000. Any further discrepancy between...
Price Company issued 8,220 shares of its $20 par value common stock for the net assets...
Price Company issued 8,220 shares of its $20 par value common
stock for the net assets of Sims Company in a business combination
under which Sims Company will be merged into Price Company.
Although the questions are correct, my question is how do I solve
part "B"?
Exercise 2-7 Price Company issued 8,220 shares of its $20 par value common stock for the net assets of Sims Company in a business combination under which Sims Company will be merged into...
1. Parker Company issued 10,000 shares of S10 par common stock (market value of $30 per...
1. Parker Company issued 10,000 shares of S10 par common stock (market value of $30 per share) for the all of the outstanding stock of Schein Company. Direct acquisition costs were $15,000. Indirect acquisition costs were $5,000 Stock issuance costs were $3,000. As a result of this transaction, Parker's Additional Paid in Capital account will increase by what amount?
13-16. The financial balances for the Atwood Company and the Franz Company as of December 31,...
13-16. The financial balances for the Atwood Company and the Franz Company as of December 31, 20X1, are presented below. Also included are the fair values for Franz Company's net assets. Parenthesis indicate a credit balance. Assume an acquisition business combination took place at December 31, 20X1. Atwood issued 50 shares of its common stock with a fair value of $35 per share for all of the outstanding common shares of Franz. Stock issuance costs of $15 (in thousands) and...
13-16. The financial balances for the Atwood Company and the Franz Company as of December 31,...
13-16. The financial balances for the Atwood Company and the
Franz Company as of December 31, 20X1, are presented below. Also
included are the fair values for Franz Company's net assets.
Parenthesis indicate a credit balance. Assume an acquisition
business combination took place at December 31, 20X1. Atwood issued
50 shares of its common stock with a fair value of $35 per share
for all of the outstanding common shares of Franz. Stock issuance
costs of $15 (in thousands) and...
Exercise 3-4 On January 1, 2013, Peach Company issued 1,390 of its $20 par value common...
Exercise 3-4
On January 1, 2013, Peach Company issued 1,390 of its $20 par value
common shares with a fair value of $58 per share in exchange for
the 1,870 outstanding common shares of Swartz Company in a purchase
transaction. Registration costs amounted to $1,867, paid in cash.
Just prior to the acquisition, the balance sheets of the two
companies were as follows:
Peach Company
Swartz Company
Cash
$70,580
$13,760
Accounts receivable (net)
95,150
20,050
Inventory
58,210
22,920
Plant and...
12. When a private company acquires another company, GMP for private companies allows which identifiable intangible...
12. When a private company acquires another company, GMP for private companies allows which identifiable intangible assets to be combined with goodwill and not separately capitalized! Brand names b. Technology Software licenses d. Noncompetition agreements d. . Textbook page number that supports your answer: 13. Company A has unreported identifiable intangible assets that are very valuable, and would like investors to know about them. Which one of the following actions will allow these intangible assets to be reported? a. Get...
On July 1, 2012, an acquiring company Corp. paid $2,200,000 for 100% of the outstanding common stock of an investee company in a transaction that qualifies as a business combination. Immediately preceding the transaction, the investee company had the following condensed balance sheet: Pre-acquisition amounts reported on investee's balance sheet Current assets $300,000 Property and equipment, net 2,800,000 Liabilities 1,500,000 Equity 1,600,000 The acquisition-date fair value of the property and equipment was $440,000 more than its carrying amount. For all...
On July 1, 2012, an acquiring company Corp. paid $1,100,000 for 100% of the outstanding common stock of an investee company in a transaction that qualifies as a business combination. Immediately preceding the transaction, the investee company had the following condensed balance sheet: Pre-acquisition amounts reported on investee's balance sheet Current assets $150,000 Property and equipment, net 1,400,000 Liabilities 750,000 Equity 800,000 The acquisition-date fair value of the property and equipment was $220,000 more than its carrying amount. For all...
Review of pre-consolidation equity method (controlling investment in affiliate, fair value equals book value) Assume an investee has the following financial statement information for the three years ending December 31, 2019: (At December 31) 2019 2018 2017 Current assets $285,000 $277,500 $207,000 Tangible fixed assets 662,500 575,000 563,000 Intangible assets 40,000 45,000 50,000 Total assets $987,500 $897,500 $820,000 Current liabilities $120,000 $110,000 $100,000 Noncurrent liabilities 266,250 242,500 220,000 Common stock 100,000 100,000 100,000 Additional paid-in capital 100,000 100,000 100,000 Retained...
Price Company issued 8,220 shares of its $20 par value common
stock for the net assets of Sims Company in a business combination
under which Sims Company will be merged into Price Company.
Although the questions are correct, my question is how do I solve
part "B"?
Exercise 2-7 Price Company issued 8,220 shares of its $20 par value common stock for the net assets of Sims Company in a business combination under which Sims Company will be merged into...
1. Parker Company issued 10,000 shares of S10 par common stock (market value of $30 per share) for the all of the outstanding stock of Schein Company. Direct acquisition costs were $15,000. Indirect acquisition costs were $5,000 Stock issuance costs were $3,000. As a result of this transaction, Parker's Additional Paid in Capital account will increase by what amount?
13-16. The financial balances for the Atwood Company and the
Franz Company as of December 31, 20X1, are presented below. Also
included are the fair values for Franz Company's net assets.
Parenthesis indicate a credit balance. Assume an acquisition
business combination took place at December 31, 20X1. Atwood issued
50 shares of its common stock with a fair value of $35 per share
for all of the outstanding common shares of Franz. Stock issuance
costs of $15 (in thousands) and...
Exercise 3-4
On January 1, 2013, Peach Company issued 1,390 of its $20 par value
common shares with a fair value of $58 per share in exchange for
the 1,870 outstanding common shares of Swartz Company in a purchase
transaction. Registration costs amounted to $1,867, paid in cash.
Just prior to the acquisition, the balance sheets of the two
companies were as follows:
Peach Company
Swartz Company
Cash
$70,580
$13,760
Accounts receivable (net)
95,150
20,050
Inventory
58,210
22,920
Plant and...
12. When a private company acquires another company, GMP for private companies allows which identifiable intangible assets to be combined with goodwill and not separately capitalized! Brand names b. Technology Software licenses d. Noncompetition agreements d. . Textbook page number that supports your answer: 13. Company A has unreported identifiable intangible assets that are very valuable, and would like investors to know about them. Which one of the following actions will allow these intangible assets to be reported? a. Get...
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