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 Current Assets Long-Term Assets Total Liabilities "Book" value $13,400,000 $28,700,000 $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) Current Assets Giants Co will have, immediately after the acquisition. c) Total Assets Giants Co will have, immediately after the acquisition. d) Total Equity Giants Co will have, immediately after the acquisition. "Book" value "Fair" Value $5,600,000 $6,100,000 $13,800,000 $15,300,000 $9,100,000 $9,600,000
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 Current Assets Long-Term Assets Total Liabilities "Book" value $13,400,000 $28,700,000 $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) Current Assets Giants Co will have, immediately after the acquisition. c) Total Assets Giants Co will have, immediately after the acquisition. d) Total Equity Giants Co will have, immediately after the acquisition. "Book" value "Fair" Value $5,600,000 $6,100,000 $13,800,000 $15,300,000 $9,100,000 $9,600,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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) Current Assets Giants Co will have, immediately after the acquisition.
c) Total Assets Giants Co will have, immediately after the acquisition.
d) Total Equity Giants Co will have, immediately after the acquisition.
"Book" value "Fair" Value
$5,600,000 $6,100,000
$13,800,000 $15,300,000
$9,100,000 $9,600,000
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