Backstreets Company recently acquired all of Jungleland Incorporated's net assets in a business acquisition. The cash purchase price was $9.1 million. Jungleland's assets and liabilities had the following appraised values immediately prior to the acquisition: land, $2.5 million; buildings, $4.2 million; inventory, $3.0 million; long-term notes payable, for which Backstreets Company assumes payment responsibilities, $2.3 million. Required: How much goodwill will result from this transaction? Note: Enter your answer in whole dollars. Goodwill
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- INTANGIBLE ASSETS - Problem 3 a. Black Mirror, Inc. purchased another company Stranger Things, Corp. in its entirety for $165 million in cash (i.e., this is an M&A). Below is a list of the assets and liabilities that Stranger Things has (book values refer to how they appeared on Stranger Things' Balance Sheet before the acquisition, while fair values are determined in independent evaluation). Stranger Things Assets and Liabilities: ● Accounts Receivable: ● PP&E Goodwill from prior acquisitions • Copyrights (internally developed) Accounts Payable ● Deferred Tax Liability Amount Assets Book Value 35 30* 45 * BV of PP&E is comprised of Gross PP&E of 50 minus Accumulated Depreciation of 20 What assets does BlackMirror, Inc. add to its Balance Sheet as a result of this M&A Asset Name Amount 18 16 What liabilities does BlackMirror, Inc. add to its Balance Sheet as a result of this M&A Liability Name = Liabilities + Equity Fair Value 30 35 70 18 12 b. A year later Black Mirror, Inc. values…Exercise 8-21A (Algo) Computing and recording the amortization of intangibles LO 8-10, 8-11 Dynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items. Patent with 4 remaining years of legal life Goodwill $39,700 41,900 Dynamo's financial condition just prior to the acquisition of these assets is shown in the following statements model. Balance Sheet Income Statement Assets Stockholders' Cash + 85,200 + Patent NA + + Goodwill NA = NA = Liabilities + Equity 85,200 + Revenue NA - - = Expenses = Net Income NA NA Statement of Cash Flows ΝΑ Required a. Compute the annual amortization expense for these items. b. Show the acquisition of the intangible assets and the related amortization expense for Year 1 in a horizontal statements model. c. Prepare the journal entries to record the acquisition of the intangible assets and the related amortization for year 1. Complete this question by entering your answers in the tabs below.…Accounting On January 1, 20X1, Porta Corporation purchased Swick Company's net assets and assigned goodwill of $81,500 to Reporting Division K. The following assets and liabilities are assigned to Reporting Division K on the acquisition date: Carrying Fair Amount Value Cash 15,500 $ 15,500 Inventory 57,500 72,500 Equipment 185,000 205,000 Goodwill 81,500 Accounts 31,500 31,500 Payable Required: On December 31, 20X3, Porta must test goodwill for impairment. Determine the amount of goodwill to be reported for Division K and the amount of goodwill impairment to be recognized, if any, if Division K's fair value is determined to be $355,000. $295,000. $275,000.
- 4. Giants Co paid $12,500,000 cash to acquire California Co. At the time of the acquisition, Giants Co and California Co had the following balance sheet information: Giants Co Balance Sheet at time of purchase "Book" value Current Assets $13,400,000 Long-Term Assets $28,700,000 Total Liabilities $17,600,000 California Co Balance Sheet at time of purchase Current Assets Long-Term Assets Total Liabilities ** REQUIRED: 1) Determine the following: a) amount of goodwill that Giants Co will record as a result of the aquisition. b) Long-term Assets Giants Co will have, immediately after the acquisition. c) Total Assets Giants Co will have, immediately after the acquisition. d) Total Liabilities Giants Co will have, immediately after the acquisition. Given the same information as above, assume that Giants Co pays $10,500,000 cash, instead of $12,500,000 cash, for California Co. 2) Determine the following: a) amount of goodwill that Giants Co will record as a result of the aquisition. b)…Brief Exercise 7-12 Calculate amortization expense (L07-5) In early January, Burger Mania acquired 100% of the common stock of the Crispy Taco restaurant chain. The purchase price allocation included the following items: $4 million, patent; $5 million, trademark considered to have an indefinite useful life; and $6 million. goodwill. Burger Mania's policy is to amortize intangible assets with finite useful lives using the straight-line method, no residual value, and a five-year service life. What is the total amount of amortization expense that would appear in Burger Mania's income statement for the first year ended December 31 related to these items? (Enter your answer in dollars, not in millions (i.e. 5 should be entered as 5,000,000).) Amortization expense Graw pe here to search ASUSces Mc Graw Hill Problem 7-3B (Algo) Calculate and record goodwill (LO7-2) Northern Equipment Corporation purchased all the outstanding common stock of Pioneer Equipment Rental for $5,590,000 in cash. The book values and fair values of Pioneer's assets and liabilities were as follows: Accounts Receivable $ 740,000 Book Value Fair Value $ 640,000 Buildings 4,090,000 4,790,000 Equipment 100,000 190,000 Accounts Payable (760,000) (760,000) $ $ Net assets 4,170,000 4,860,000 Required: 1. Calculate the amount Northern Equipment should report for goodwill. 2. Record Northern Equipment's acquisition of Pioneer Equipment Rental. Complete this question by entering your answers in the tabs below. Required Required 1 2 Record Northern Equipment's acquisition of Pioneer Equipment Rental. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet < 1 Record the acquisition of Pioneer Equipment…
- INTANGIBLE ASSETS 8. An entity is planning to sell the business to new interests. The cumulative net earnings for the past five years amounted to P16,500,000 including expropriation loss of P1,500,000. The normal rate of return is 20%. The fair value of net assets of the entity at current year-end was P10,000,000. What is the amount of goodwill if: Excess earnings are purchased for 5 years? Excess earnings are capitalized at 25%? Annual average earnings are capitalized at 25%? Excess earnings are discounted at 12% for 5 years? (The PV of an ordinary annuity of 1 for 5 years at 12% is 3.60) 9. On January 1, 2021, an entity reported patent cost of P1,920,000 and related accumulated amortization of P240,000. The patent was purchased on January 1, 2019 at which date the remaining legal life was 16 years. On January 1, 2021, the useful life of the patent was determined to be only 8 years from the date of acquisition. On January 1, 2021, the entity paid P800,000, of which three-fourths was…Bl 69% i 4:18 pm SAR Co paid P110,000 for the net assets of Ken Corp. At the time of the acquisition,the attached photo are informatiom available related to Ken Corp's balance sheet. What is the amount of gain or loss on disposal of a business should Ken Corp. recognize? Same problem with the previous SAR Co. * Book Value Fair Value P 50,000 100, 000 50,000 30, 000 Current Assets P50,000 Building Equipment Liabilities 80,000 40,000 30, 000 Gain of 30,000 Gain of 60,000 Loss of 30,000 O Loss of 60,000Brief Exercise 7-12 Calculate amortization expense (LO7-5) In early January, Burger Mania acquired 100% of the common stock of the Crispy Taco restaurant chain. The purchase price allocation included the following items: $4 million, patent; $5 million, trademark considered to have an indefinite useful life; and $6 million, goodwill. Burger Mania's policy is to amortize intangible assets with finite useful lives using the straight-line method, no residual value, and a five-year service life. What is the total amount of amortization expense that would appear in Burger Mania's income statement for the first year ended December 31 related to these items? (Enter your answer in dollars, not in millions (i.e. 5 should be entered as 5,000,000).) Amortization expense
- Questio n 12 On July 1, 2020 , Brandon SE purchased Mills Company by paying $140,000 cash. On July 1, 2020, the fair value of the net assets of Mills Company was as follows. Buildings (net) $ 30,000 Patent 8,000 Land 25,000 Accounts receivable 12,000 Cash 50,000 Accounts payable 10,000 What is the amount of goodwill to be reported at Brandon's statement of financial position on 31/12/2019? 25000 15000 Zero 35000 37°C Haze e to search DELLBusiness Combination Versus Asset Acquisition Haley Corporation pays $3,900,000 in cash to acquire assets from Jaxon Inc., as follows: Fair Value $1,800,000 1,260,000 540,000 Machinery and equipment Developed technology (limited-life) Customer lists (limited-life) In addition, Haley pays $100,000 in cash for legal and advisory costs connected with the acquisition. Required Note: Enter all zeros with your numerical answers, do not abbreviate your answers in thousands or in millions. a. Prepare the journal entry to record the acquisition, assuming it qualifies as a business combination. Debit Credit To record the business combination + + + + + + + + + + To record the asset acquisition b. Prepare the journal entry to record the acquisition, assuming it is an asset acquisition. Credit Debit 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Exercise 8-21A (Algo) Computing and recording the amortization of intangibles LO 8-10, 8-11 Dynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items: Patent with 4 remaining years of legal life. Goodwill Required: a. Compute the annual amortization expense for these items. b. Record the acquisition of the intangible assets and the related amortization expense for Year 1 in a horizontal statements model. Complete this question by entering your answers in the tabs below. Required A Required B Compute the annual amortization expense for these items. Amortization expense per year $36,100 44,800 Required A Required B >