Homework Answers
Answer
| Calculation of Goodwill | ||
| Consideration Transferred | 12,00,000.00 | |
| Less: Net identifiable asset | ||
| Common Stock | 1,00,000.00 | |
| Retained Earnings | 2,00,000.00 | |
| Additional Paid-in Capital | 3,00,000.00 | |
| Fair value adjustment for property equipment | 1,50,000.00 | |
| Fair value adjustment for license | 2,50,000.00 | |
| 10,00,000.00 | ||
| Goodwill | 2,00,000.00 |
| Journal Entries | ||
| Cash and Receivable | 1,00,000.00 | - |
| Property & Equipment | 9,25,000.00 | - |
| Inventory | 2,00,000.00 | - |
| License | 2,75,000.00 | - |
| Goodwill | 2,00,000.00 | - |
| To Current Liabilities | - | 1,50,000.00 |
| To Notes Payable | - | 3,50,000.00 |
| To Purchase Consideration | - | 12,00,000.00 |
| Purchase Consideration | 12,00,000.00 | |
| To Equity Investment | - | 12,00,000.00 |
| Consolidated Balance Sheet | ||
| Assets | ||
| Current Assets | ||
| Cash & Receivable | 9,00,000.00 | |
| Inventory | 8,00,000.00 | |
| Non-current Assets | ||
| Property & Equipment | 32,25,000.00 | |
| License | 2,75,000.00 | |
| Intangible Asset | ||
| Goodwill | 2,00,000.00 | |
| Total Assets | 54,00,000.00 | |
| Liabilities and Shareholder's Equity | ||
| Current Liabilities | 5,50,000.00 | |
| Other Liabilities | 3,00,000.00 | |
| Non-current Liabilities | ||
| Notes payable | 3,50,000.00 | |
| Shareholder's Equity | ||
| Common Stock | 16,70,000.00 | |
| Retained Earnings | 14,30,000.00 | |
| Additional Paid-in Capital | 11,00,000.00 | |
| Total Liabilities and Equity | 54,00,000.00 | |
| Consolidated Balance Sheet | ||
| Assets | ||
| Current Assets | ||
| Cash & Receivable | 9,00,000.00 | |
| Inventory | 8,00,000.00 | |
| Non-current Assets | ||
| Property & Equipment | 32,25,000.00 | |
| License | 2,75,000.00 | |
| Intangible Asset | ||
| Goodwill | 2,00,000.00 | |
| Total Assets | 54,00,000.00 | |
| Liabilities and Shareholder's Equity | ||
| Current Liabilities | 5,50,000.00 | |
| Other Liabilities | 3,00,000.00 | |
| Non-current Liabilities | ||
| Notes payable | 3,50,000.00 | |
| Shareholder's Equity | ||
| Common Stock | 16,70,000.00 | |
| Retained Earnings | 14,30,000.00 | |
| Additional Paid-in Capital | 11,00,000.00 | |
| Total Liabilities and Equity | 54,00,000.00 |
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