Question

Company S has no long-term marketable securities. Assume the following scenarios: Case A Assume that P Company paid $134,910 cash for 100% of the net assets of S Company. S COMPANY Assets Current Assets Long-lived Assets Liabilities Net Assets Book Value $14,770 $85,340 $18,920 $81,190 Fair Value 21,580 117,830 30,700 108,710 Case B Assume that P Company paid $109,090 cash for 100% of the net assets of S Company. S COMPANY Assets Current Assets Long-lived Assets Liabilities Net Assets Book Value $14,770 $85,340 $18,920 $81,190 Fair Value 29,660 84,060 21,300 92,420 Case C Assume that P Company paid $15,530 cash for 100% of the net assets of S Company. S COMPANY Assets Current Assets Long-lived Assets Liabilities Net Assets Book Value $14,770 $85,340 $18,920 $81,190 Fair Value 20,060 43,970 40,430 23,600 Complete the following schedule by listing the amount that would be recorded on P's books.

Answer 1

solution - Page No o Good will Purchase Less fair value of Goodwill net assets (Gain) (Gain) Price case 134910 108710 26 200 case B 109090 १२ ५२० 16670 -8070 case C 15530 23600 Good will Current Long Lived Assets Assets Retained Emining Liabilities (Gain in income statement) CASE 26200 21580 117830 30 700 A CASE 16670 29660 84060 21300 B CASE 20060 43970 40430 8070 с C