Homework Help is Here – Start Your Trial Now!
Business
Accounting
On July 31, 2025, Carla Vista Company paid $2,700,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a reporting unit) of Carla Vista. Conchita reported the following balance sheet at the time of the acquisition. Current assets $730,000 Current liabilities $570,000 Noncurrent assets 2,400,000 Long-term liabilities 470,000 Total assets $3,130,000 Stockholders' equity 2,090,000 Total liabilities and stockholders' equity $3,130,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,455,000. Over the next 6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2025, Conchita reports the following balance sheet information. Current assets $410,000 Noncurrent assets (including goodwill recognized in purchase) 2,060,000 Current liabilities (700,000) Long-term liabilities (470,000) Net assets $1,300,000 Finally, it is determined that the fair value of the Conchita Division is $1,850,000. (a) Compute the amount of goodwill recognized, if any, on July 31, 2025. (If answer is zero, do not leave answer field blank. Enter O for the

On July 31, 2025, Carla Vista Company paid $2,700,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a reporting unit) of Carla Vista. Conchita reported the following balance sheet at the time of the acquisition. Current assets $730,000 Current liabilities $570,000 Noncurrent assets 2,400,000 Long-term liabilities 470,000 Total assets $3,130,000 Stockholders' equity 2,090,000 Total liabilities and stockholders' equity $3,130,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,455,000. Over the next 6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2025, Conchita reports the following balance sheet information. Current assets $410,000 Noncurrent assets (including goodwill recognized in purchase) 2,060,000 Current liabilities (700,000) Long-term liabilities (470,000) Net assets $1,300,000 Finally, it is determined that the fair value of the Conchita Division is $1,850,000. (a) Compute the amount of goodwill recognized, if any, on July 31, 2025. (If answer is zero, do not leave answer field blank. Enter O for the

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 8MC
See similar textbooks
icon
Related questions
Question

please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste

On July 31, 2025, Carla Vista Company paid $2,700,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a reporting unit) of Carla Vista. Conchita reported the following balance sheet at the time of the acquisition. Current assets $730,000 Current liabilities $570,000 Noncurrent assets 2,400,000 Long-term liabilities 470,000 Total assets $3,130,000 Stockholders' equity 2,090,000 Total liabilities and stockholders' equity $3,130,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,455,000. Over the next 6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2025, Conchita reports the following balance sheet information. Current assets $410,000 Noncurrent assets (including goodwill recognized in purchase) 2,060,000 Current liabilities (700,000) Long-term liabilities (470,000) Net assets $1,300,000 Finally, it is determined that the fair value of the Conchita Division is $1,850,000. (a) Compute the amount of goodwill recognized, if any, on July 31, 2025. (If answer is zero, do not leave answer field blank. Enter O for the
Transcribed Image Text:On July 31, 2025, Carla Vista Company paid $2,700,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a reporting unit) of Carla Vista. Conchita reported the following balance sheet at the time of the acquisition. Current assets $730,000 Current liabilities $570,000 Noncurrent assets 2,400,000 Long-term liabilities 470,000 Total assets $3,130,000 Stockholders' equity 2,090,000 Total liabilities and stockholders' equity $3,130,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,455,000. Over the next 6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2025, Conchita reports the following balance sheet information. Current assets $410,000 Noncurrent assets (including goodwill recognized in purchase) 2,060,000 Current liabilities (700,000) Long-term liabilities (470,000) Net assets $1,300,000 Finally, it is determined that the fair value of the Conchita Division is $1,850,000. (a) Compute the amount of goodwill recognized, if any, on July 31, 2025. (If answer is zero, do not leave answer field blank. Enter O for the
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L…
Auditing: A Risk Based-Approach (MindTap Course L…
Accounting
ISBN:
9781337619455
Author:
Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS