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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