Homework Answers
Answer ) True
Fair value of net assets is subtracted from Purchase Consideration paid to calculate the value of goodwill
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QUESTION 12 For an 100% owned subsidairy, goodwill is generally calculated as the purchase price of...
Goodwill is the difference between the purchase price and the estimated fair value of the assets...
Goodwill is the difference between the purchase price and the estimated fair value of the assets acquired. Question options: True False
Consolidation entries at date of acquisition (purchase price greater than book value) A parent company exchanges...
Consolidation entries at date of acquisition (purchase price greater than book value) A parent company exchanges 30,000 shares of its $1 par value common stock, with a market value of $10/share, for all of the shares owned by the subsidiary's shareholders, resulting in a $300,000 total purchase price. On the acquisition date, the subsidiary reported a book value of Stockholders' Equity of $225,000, comprised of $90,000 of Common Stock and $135,000 of Retained Earnings. An examination of the subsidiary's balance...
Exercise 2-11 Relation between Purchase Price, Goodwill, and Negative Goodwill LO 6 The following balance sheets...
Exercise 2-11 Relation between Purchase Price, Goodwill, and Negative Goodwill LO 6 The following balance sheets were reported on January 1, 2019, for Peach Company and Stream Company: Peach Stream Cash $ 100,000 $ 20,000 Inventory 300,000 100,000 Equipment (net) 880,000 380,000 Total $1,280,000 $500,000 Total Liabilities $ 300,000 $100,000 Common stock, $20 par value 400,000 200,000 Other contributed capital 250,000 70,000 Retained earnings 330,000 130,000 Total $1,280,000 $500,000 Required: Appraisals reveal that the inventory has a fair value of...
47. Determining ending balances of accounts on the consolidated balance sheet Common Assume that the parent...
47. Determining ending balances of accounts on the consolidated balance sheet Common Assume that the parent company acquires its subsidiary by exchanging 75,400 shares of its Snock, with a fair value on the acquisition date of 530 per share, for all of the outstanding voking shares of the investee. In its analysis of the investee and liabilities at an amount equaling their book values except for a building that is undervalued by $4so,000, an unrecorded License Agreement with a fair...
The basis of property inherited from a decedent is generally the __________. Purchase price of the...
The basis of property inherited from a decedent is generally the __________. Purchase price of the property. Fair market value (FMV) of the property on the date of death or the alternative valuation date. Higher of the decedent's adjusted basis or the fair market value (FMV) on the date of death or the alternative valuation date. Adjusted basis of the decedent on the date of death or the alternative valuation date
Consolidation entries at date of acquisition (purchase price greater than book value) A parent company acquires...
Consolidation entries at date of acquisition (purchase price greater than book value) A parent company acquires all of the outstanding common stock of its subsidiary for cash purchase price of $530,000. On the acquisition date, the subsidiary reported $120,000 for Common Stock and $90,000 for Retained Earnings. An examination of the subsidiary's balance sheet revealed that book values were equal to fair values for all assets, except for an unrecorded patent, which the parent values at $190,000. a. Prepare the...
LO4 32. Compute the amount of acquired Goodwill, including contingent earnings and bargain purchase Assume you...
LO4 32. Compute the amount of acquired Goodwill, including contingent earnings and bargain purchase Assume you are charged with assigning fair values related to a 53.040,000 acquisition. You determine that the fair value of the net identifiable tangible assets is $1,480,000. You also conclude that the pur- chase included a Customer List with a fair value at $272,000. 4. How much Goodwill will you record in this acquisition, and how is the Goodwill accounted for subsequent to the acquisition? b....
On January 1, 2017, Franklin Company acquires 80% of the outstanding common stock of LaSalle, for a purchase price of $9...
On January 1, 2017, Franklin Company acquires 80% of the outstanding common stock of LaSalle, for a purchase price of $970,000. It was determined that the fair value of the noncontrolling interest in the subsidiary is $240,000. The book value of the LaSalle’s stockholders’ equity on the date of acquisition is $700,000 and its fair value of net assets is $1,100,000. The acquisition-date acquisition accounting premium (AAP) is allocated $250,000 to equipment with a remaining useful life of 10 years,...
L') Cost of the investment less the subsidiary's fair var (D) Cost of the investment less...
L') Cost of the investment less the subsidiary's fair var (D) Cost of the investment less the subsidiary's fair val E) No longer allowed under federal law. thent less the subsidiary's book value at the acquisition de less the subsidiary's fair value at the beginning of the year. ry's fair value at the acquisition date. 2. CPA Inc. acquired 100% of the voting common stoc MBA's accounts on that date (prior to creating the com ting common stock of MBA...
Company B has a reporting unit that failed step one. For step 2, it has calculated...
Company B has a reporting unit that failed step one. For step 2, it has calculated the following amounts (in Millions) for this reporting unit: $800 Goodwill on the books at time step 2 is performed Book value of the reporting unit (including goodwill) 2200 1800 Fair value of reporting unit Fair value of net assets of the reporting unit, excluding goodwill, assuming a hypothetical purchase of the reporting unit 1300 32. The implied fair value of goodwill is 400...
Consolidation entries at date of acquisition (purchase price greater than book value) A parent company exchanges 30,000 shares of its $1 par value common stock, with a market value of $10/share, for all of the shares owned by the subsidiary's shareholders, resulting in a $300,000 total purchase price. On the acquisition date, the subsidiary reported a book value of Stockholders' Equity of $225,000, comprised of $90,000 of Common Stock and $135,000 of Retained Earnings. An examination of the subsidiary's balance...
Exercise 2-11 Relation between Purchase Price, Goodwill, and Negative Goodwill LO 6 The following balance sheets were reported on January 1, 2019, for Peach Company and Stream Company: Peach Stream Cash $ 100,000 $ 20,000 Inventory 300,000 100,000 Equipment (net) 880,000 380,000 Total $1,280,000 $500,000 Total Liabilities $ 300,000 $100,000 Common stock, $20 par value 400,000 200,000 Other contributed capital 250,000 70,000 Retained earnings 330,000 130,000 Total $1,280,000 $500,000 Required: Appraisals reveal that the inventory has a fair value of...
47. Determining ending balances of accounts on the consolidated balance sheet Common Assume that the parent company acquires its subsidiary by exchanging 75,400 shares of its Snock, with a fair value on the acquisition date of 530 per share, for all of the outstanding voking shares of the investee. In its analysis of the investee and liabilities at an amount equaling their book values except for a building that is undervalued by $4so,000, an unrecorded License Agreement with a fair...
Consolidation entries at date of acquisition (purchase price greater than book value) A parent company acquires all of the outstanding common stock of its subsidiary for cash purchase price of $530,000. On the acquisition date, the subsidiary reported $120,000 for Common Stock and $90,000 for Retained Earnings. An examination of the subsidiary's balance sheet revealed that book values were equal to fair values for all assets, except for an unrecorded patent, which the parent values at $190,000. a. Prepare the...
LO4 32. Compute the amount of acquired Goodwill, including contingent earnings and bargain purchase Assume you are charged with assigning fair values related to a 53.040,000 acquisition. You determine that the fair value of the net identifiable tangible assets is $1,480,000. You also conclude that the pur- chase included a Customer List with a fair value at $272,000. 4. How much Goodwill will you record in this acquisition, and how is the Goodwill accounted for subsequent to the acquisition? b....
L') Cost of the investment less the subsidiary's fair var (D) Cost of the investment less the subsidiary's fair val E) No longer allowed under federal law. thent less the subsidiary's book value at the acquisition de less the subsidiary's fair value at the beginning of the year. ry's fair value at the acquisition date. 2. CPA Inc. acquired 100% of the voting common stoc MBA's accounts on that date (prior to creating the com ting common stock of MBA...
Company B has a reporting unit that failed step one. For step 2, it has calculated the following amounts (in Millions) for this reporting unit: $800 Goodwill on the books at time step 2 is performed Book value of the reporting unit (including goodwill) 2200 1800 Fair value of reporting unit Fair value of net assets of the reporting unit, excluding goodwill, assuming a hypothetical purchase of the reporting unit 1300 32. The implied fair value of goodwill is 400...
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