On May 1, Soriano Company reported the following account balances along with their estimated fair values:Carrying Amount$ 245,30079,200Fair Value$ 245,30079,200505,500658,000125,500875,000$ 1,325,000$ 1,488,000$ 253,000729,800AccountReceivablesInventoryCopyrightsPatented technologyTotal assetsCurrent liabilitiesLong-term liabilitiesCommon stockRetained earnings$ 253,000740,000100,000232,000$ 1,325,000On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. Tofacilitate the merger, Zambrano also paid $100,000 to an investment banking firm.The following information was also available:• Zambrano further agreed to pay an extra $71,200 to the former owners of Soriano only if they meet certain revenue goals during thenext two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $35,600.• Soriano has a research and development project in process with an appraised value of $221,500. However, the project has not yetreached technological feasibility, and the project's assets have no alternative future use.Required:a. Determine whether there is a gain on bargain purchase or goodwill if $670,000 of cash was paid for Soriano.b. Determine whether there is a gain on bargain purchase or goodwill if $790,100 of cash was paid for Soriano. the givenanswers should be input and displayed as positive values.a. Determine whether there is a gain on bargain purchase or goodwill if $670,000 of cash was paid for Soriano.Cash paidContingent performance liabilityTotal consideration transferredFair value of net assetsGain on bargain purchasemplete this question. Allb. Determine whether there is a gain on bargain purchase or goodwill if $790,100 of cash was paid for Soriano.Cash paidContingent performance liabilityTotal consideration transferredFair value of net assetsGoodwill

The cost of investment includes the cash transferred, Fair value of assets transferred, fair value…

On May 1, Soriano Company reported the following account balances along with their estimated fair values: Carrying Amount $ 245,300 79,200 Account Receivables Inventory Copyrights Patented technology Total assets Current liabilities Long-term liabilities Common stock Retained earnings 125,500 875,000 $ 1,325,000 $ 253,000 740,000 100,000 232,000 $ 1,325,000 Fair Value $ 245,300 79,200 505,500 658,000 $ 1,488,000 $ 253,000 729,800

On May 1, Soriano Company reported the following account balances along with their estimated fair values: Carrying Amount $ 245,300 79,200 Account Receivables Inventory Copyrights Patented technology Total assets Current liabilities Long-term liabilities Common stock Retained earnings 125,500 875,000 $ 1,325,000 $ 253,000 740,000 100,000 232,000 $ 1,325,000 Fair Value $ 245,300 79,200 505,500 658,000 $ 1,488,000 $ 253,000 729,800

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On May 1, Soriano Company reported the following account balances along with their estimated fair values: Fair Value Carrying Amount $ 196,000 85,000 171,000 874,000 Receivables Inventory Copyrights Patented technology Total assets Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and equities Items View transaction list $ 1,326,000 $216,000 742,000 100,000 268,000 $ 1,326,000 4 On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. To facilitate the merger, Zambrano also paid $125,500 to an investment banking firm. The following information was also available: . Zambrano further agreed to pay an extra $78,200 to the former owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $39.100. • Soriano has a research and development…
The comparative balance sheet of Merrick Equipment Co. for Dec. 31, 20Y9 and 20Y8, is:Dec. 31, 20Y9 Dec. 31, 20Y8AssetsCash $70,720 $47,940Accounts receivable (net) 207,230 188,190Inventories 298,520 289,850Investments 0 102,000Land 295,800 0Equipment 438,600 358,020Accumulated depreciation—equipment (99,110) (84,320)Total assets $1,211,760 $901,680Liabilities and Stockholders' EquityAccounts payable (merchandise creditors) $205,700 $194,140Accrued expenses payable (operating expenses) 30,600 26,860Dividends payable 25,500 20,400Common stock, $1 par 202,000 102,000Paid-in capital: Excess of issue price over par—common stock 354,000 204,000Retained earnings 393,960 354,280Total liabilities and stockholders' equity $1,211,760 $901,680The income statement for the year ended December 31, 20Y9, is as follows:Sales $2,023,898Cost of goods sold 1,245,476Gross profit $778,422Operating expenses:Depreciation expense $14,790Other operating expenses 517,299Total operating expenses 532,089Operating…
The comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and 20Y8, is as follows:Dec 31 20Y9 Dec 31 20Y8ASSETSCash $ 70,720 $ 47,940Accounts Receivable 207,230 188,190Inventories 298,520 289,850Investments - 102,000Land 295,800 -Equipment 438,600 358,020Accumulated Depreciation-Equipment (99,110) (84,320)Total Assets $ 1,211,760 $ 901,680LIABILITIES AND STOCKHOLDERS' EQUITYAccounts Payable $ 205,700 $ 194,140Accrued Expenses Payable (operating expenses) 30,600 26,860Dividends Payable 25,500 20,400Common Stock, $1 par 202,000 102,000Paid-in Capital; Excess of issue price over par-common stock 354,000 204,000Retained Earnings 393,960 354,280Total Liabilities and Stockholders Equity: $ 1,211,760 $ 901,680Additional data obtained from an examination of the accounts in the ledger for 20Y9 are as follows:A. Equipment and land were acquired for cashB. There were no disposals of equipment during the year.C. The investments were sold for $91,800 cash.D. The common stock was…
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On May 1, Soriano Co. reported the following account balances along with their estimated fair values: Carrying Amount Fair Value 151,000 80,000 587,000 652,000 1,470,000 Receivables 151,000 80,000 Inventory Copyrights Patented technology 168,000 855,000 $ 1, 254,000 Total assets 237,000 $ 694,000 100,000 223,000 Current liabilities 237,000 Long-term liabilities Common stock 681, 000 Retained earnings Total liabilities and equities $ 1,254,000 On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. To facilitate the merger, Zambrano also paid $105,000 to an investment banking firm. The following information was also available: • Zambrano further agreed to pay an extra $82,400 to the former owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $41,200. Soriano has a…
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