Q27 Under the acquisition method of accounting for a business combination, goodwill is equal to The...
Q27
Under the acquisition method of accounting for a business combination, goodwill is equal to
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The acquired company's ability to generate excess profits. |
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The excess of the cost of the acquisition plus the fair value of the noncontrolling interest over the fair value of the acquiree's net assets. |
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The excess of the cost of the acquisition over the fair value of the acquiree's net assets. |
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The excess of the fair value of acquiree's net assets over the cost of acquisition. |
Homework Answers
The answer is:
The excess of the cost of the acquisition over the fair value of the acquiree's net assets.
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Q27
Under the acquisition method of accounting for a business
combination, goodwill is equal to
The...
which of the following best describes the accounting for goodwill acquired in business acquisition? a. Goodwill...
which of the following best describes the accounting for goodwill acquired in business acquisition? a. Goodwill can be recorded by a company when it can demonstrate that the company has generated excess market value directly attributable to its strong reputation b. Goodwill is recorded as an asset when the purchaser of a business believes that the purchased business has a good reputation among its customers c. Goodwill is recorded as an asset when the purchaser of a business pays less...
Q20 In a business combination that is accounted for under the acquisition method, the entity that...
Q20 In a business combination that is accounted for under the acquisition method, the entity that obtains control over one or more businesses and establishes the acquisition date that control was achieved is called the Controller. Acquirer. Proprietor. Controlling interest.
6 ] In a business combination, the valuation of goodwill is a calculation A. To offset...
6 ] In a business combination, the valuation of goodwill is a calculation A. To offset the bargain purchase cost. B.Of all of the unlimited life intangible assets. C.Of the residual paid above the fair value of the identifiable net assets. D.Of all of the increases in market valuation of the intangible assets acquired
15. A U.S. company acquires 65% of another company. The acquisition includes the following items: 10,000...
15. A U.S. company acquires 65% of another company. The acquisition includes the following items: 10,000 shares of new stock issued to the former shareholders of the acquired company, fair value $40/share $5/share in cash paid to the former shareholders of the acquired company, 25,000 shares acquired Registration fees for the stock, $2,000, paid in cash Legal and consulting fees, $3,000, paid in cash $5,000 in severance pay to former employees of the acquired company Vested stock options issued to...
Consolidation on date of acquisition - Equity method with noncontrolling interest and AAP Assume ...
Consolidation on date of acquisition - Equity method with noncontrolling interest and AAP Assume that a parent company acquires an 80% interest in its subsidiary for a purchase price of $620,800. The excess of the total fair value of the controlling and noncontrolling interests over the book value of the subsidiary's Stockholders' Equity is assigned to a building (in PPE, net) that the parent believes is worth $50,000 more than its book value, an: unrecorded Patent that the parent valued...
Parent Company recently acquired a business appropriately recognizing goodwill in the acquisition at the reporting unit...
Parent Company recently acquired a business appropriately recognizing goodwill in the acquisition at the reporting unit level. The goodwill was allocated to the reporting units: Rexy Inc. Parent provides the following information in performing the 2019 annual review for impairment: Rexy Reporting Unit: Carrying value of net assets including $130,000 of Goodwill equals $540,000; Fair Value of net assets excluding Goodwill equals $400,000; Valuation of Reporting Unit (including Goodwill $525,000). Using the two-step Goodwill Impairment test, compute the amount of...
Consolidation on date of acquisition - Equity method with noncontrolling interest and AAP Assume a parent...
Consolidation on date of acquisition - Equity method with noncontrolling interest and AAP Assume a parent company acquires a 75% interest in its subsidiary for a purchase price of $924,000. The excess of the total fair value of the controlling and noncontrolling Interests over the book value of the subsidiary's Stockholders' Equity is assigned to a building in PPE, net) that is worth $88,000 more than its book value, an unrecorded patent with a fair value of $144,000, and Goodwill...
Company A is assigned $200,000 of goodwill arising from a recent business combination. The current carrying...
Company A is assigned $200,000 of goodwill arising from a recent business combination. The current carrying value of its net assets is $400,000 and the current fair value of its net assets, excluding goodwill, is $350,000. The fair value of the reporting unit is estimated to be $380,000. How much is the impairment loss? $150,000 $170,000 $180,000 $200,000
3. Under the provisions of the business combination rules, when the fair value of identifiable net assets acquired exce...
3. Under the provisions of the business combination rules, when the fair value of identifiable net assets acquired exceeds the investment cost, which of the following statements is correct? A) A gain from a bargain purchase is recognized for the amount that the fair value of the identifiable net assets acquired exceeds the acquisition price. B) The difference is allocated first to reduce proportionately (according to market value) non-current assets, then to non-monetary current assets, and any negative remainder is...
2* Sharp Company will acquire 90 percent of Moore Company in a business combination. The total...
2* Sharp Company will acquire 90 percent of Moore Company in a business combination. The total consideration has been agreed upon. Tha nature of Sharp's payment has not been fully agreed upon. Therefore, it is possible that this business combination might be accounted as either a purchase or a pooling of interests. It is expected that on the date the business combination is to be consummated, the fair value will exceed the book value of Moore's assets minus liabilities. Sharp...
15. A U.S. company acquires 65% of another company. The acquisition includes the following items: 10,000 shares of new stock issued to the former shareholders of the acquired company, fair value $40/share $5/share in cash paid to the former shareholders of the acquired company, 25,000 shares acquired Registration fees for the stock, $2,000, paid in cash Legal and consulting fees, $3,000, paid in cash $5,000 in severance pay to former employees of the acquired company Vested stock options issued to...
Consolidation on date of acquisition - Equity method with noncontrolling interest and AAP Assume that a parent company acquires an 80% interest in its subsidiary for a purchase price of $620,800. The excess of the total fair value of the controlling and noncontrolling interests over the book value of the subsidiary's Stockholders' Equity is assigned to a building (in PPE, net) that the parent believes is worth $50,000 more than its book value, an: unrecorded Patent that the parent valued...
Consolidation on date of acquisition - Equity method with noncontrolling interest and AAP Assume a parent company acquires a 75% interest in its subsidiary for a purchase price of $924,000. The excess of the total fair value of the controlling and noncontrolling Interests over the book value of the subsidiary's Stockholders' Equity is assigned to a building in PPE, net) that is worth $88,000 more than its book value, an unrecorded patent with a fair value of $144,000, and Goodwill...
3. Under the provisions of the business combination rules, when the fair value of identifiable net assets acquired exceeds the investment cost, which of the following statements is correct? A) A gain from a bargain purchase is recognized for the amount that the fair value of the identifiable net assets acquired exceeds the acquisition price. B) The difference is allocated first to reduce proportionately (according to market value) non-current assets, then to non-monetary current assets, and any negative remainder is...
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