Arizona Corp. acquired the business Data Systems for $325,000 cash and assumed all liabilities at the...
Arizona Corp. acquired the business Data Systems for $325,000
cash and assumed all liabilities at the date of purchase. Data’s
books showed tangible assets of $350,000, liabilities of $20,000,
and stockholders’ equity of $330,000. An appraiser assessed the
fair market value of the tangible assets at $315,000 at the date of
acquisition. Arizona Corp.’s financial condition just prior to the
acquisition is shown in the following statements model:
| Assets | = | Liab. | + | Equity | Rev. | – | Exp. | = | Net Inc. | Cash Flow | |||||
| Cash | + | Tang. Assets | + | Goodwill | |||||||||||
| 550,000 | + | NA | + | NA | = | NA | + | 550,000 | NA | – | NA | = | NA | NA | |
Required:
a. Compute the amount of goodwill acquired.
b. Record the acquisition in a financial
statements model like the preceding one.
d. Record the acquisition in general journal
format.
Homework Answers
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Arizona Corp. acquired the business Data Systems for $325,000
cash and assumed all liabilities at the...
Arizona Corp. acquired the business Data Systems for $345,000 cash and assumed all liabilities at the date of pur...
Arizona Corp. acquired the business Data Systems for $345,000 cash and assumed all liabilities at the date of purchase. Data's books showed tangible assets of $390,000, liabilities of $24,000, and stockholders' equity of $366,000. An appraiser assessed the fair market value of the tangible assets at $335,000 at the date of acquisition. Arizona Corp.'s financial condition just prior to the acquisition is shown in the following statements model: Assets +Tang. Assets + NA Liab. Equity Rev. Exp. Net Inc. Cash...
Arizona Corp. acquired the business Data Systems for $320,000 cash and assumed all liabilities at the...
Arizona Corp. acquired the business Data Systems for $320,000
cash and assumed all liabilities at the date of purchase. Data’s
books showed tangible assets of $340,000, liabilities of $19,000,
and stockholders’ equity of $321,000. An appraiser assessed the
fair market value of the tangible assets at $310,000 at the date of
acquisition. Arizona Corp.’s financial condition just prior to the
acquisition is shown in the following statements model:
Assets
=
Liab.
+
Equity
Rev.
–
Exp.
=
Net Inc.
Cash...
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Arizona Corp. acquired the business Data Systems for $345,000 cash and assumed all liabilities at the date of purchase. Data's books showed tangible assets of $390,000, liabilities of $24,000, and stockholders' equity of $366,000. An appraiser assessed the fair market value of the tangible assets at $335,000 at the date of acquisition. Arizona Corp.'s financial condition just prior to the acquisition is shown in the following statements model: Assets +Tang. Assets + NA Liab. Equity Rev. Exp. Net Inc. Cash...
Arizona Corp. acquired the business Data Systems for $320,000
cash and assumed all liabilities at the date of purchase. Data’s
books showed tangible assets of $340,000, liabilities of $19,000,
and stockholders’ equity of $321,000. An appraiser assessed the
fair market value of the tangible assets at $310,000 at the date of
acquisition. Arizona Corp.’s financial condition just prior to the
acquisition is shown in the following statements model:
Assets
=
Liab.
+
Equity
Rev.
–
Exp.
=
Net Inc.
Cash...
Dynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items: Patent with 4 remaining years of legal life Goodwill $33,600 39,600 Dynamo's financial condition just prior to the acquisition of these assets is shown in the following statements model: Liab. Rev. Exp. Net Inc. Cash Flow + Assets Patent NA Cash 85,600 + Goodwill NA Equity 85,600 NA NA NA NA NA Required: a. Compute the annual amortization expense for...
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Hendrie Inc. acquired the listed assets and liabilities of Smith Corp. for $2,200,000 cash on 1 January. The book values and fair values of the assets of Smith as of the date of acquisition were: Accounts receivable Inventory Property, plant, and equipment Land Book Value $ 245 000 320,000 490,000 295.000 Fair Value $ 245,000 540.000 740,000 590.000 In addition, Smith Corp. had liabilities totalling $510,000 at the date of acquisition and a customer list estimated to have a fair...
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