On January 1, 2021, ABC acquired all the assets and assumed all the liabilities of DEF Co. for P4,500,000. Relevant information follows: ASSETS Carrying Value 55,000 800,000 Fair Values 55,000 800,C00 Cash Receivable Allowance for Doubtful Accounts 150,000 180,C00 750,C00 4,000,C00 200,C00 1,555,0000 700,000 Inventory Land Goodwill 3,500,000 150,000 1,555,000 Liabilities DEC Co. has research and development projects with fair value of P100,000. ABC does not intend to use those R&Ds. However, there have been exchange trarsactions involving the information generated from DEF, but those transactions are infrequent > All fair value adjustments result to temporary differences but do not affect the tax bases of the assets and liabilities. The taxrate is 30%. > ABC incurred P200,000 on general administrative costs of maintaining an internal acquisition department. Compute the goodwill (gain on bargain purchase)?

On January 1, 2021, ABC acquired all the assets and assumed all the liabilities of DEF Co. for P4,500,000. Relevant information follows: ASSETS Carrying Value 55,000 800,000 Fair Values 55,000 800,C00 Cash Receivable Allowance for Doubtful Accounts 150,000 180,C00 750,C00 4,000,C00 200,C00 1,555,0000 700,000 Inventory Land Goodwill 3,500,000 150,000 1,555,000 Liabilities DEC Co. has research and development projects with fair value of P100,000. ABC does not intend to use those R&Ds. However, there have been exchange trarsactions involving the information generated from DEF, but those transactions are infrequent > All fair value adjustments result to temporary differences but do not affect the tax bases of the assets and liabilities. The taxrate is 30%. > ABC incurred P200,000 on general administrative costs of maintaining an internal acquisition department. Compute the goodwill (gain on bargain purchase)?

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 8RE

See similar textbooks

Similar questions

Action, Inc. acquired the following assets and assumed the related liabilities of Slacker Corp. in a transaction completed on February 16, 2023: Accounts receivable, net Inventories Property, plant & equipment Non-amortizable intangible assets Carrying value for Slacker Current liabilities Noncurrent liabilities $ 11,000 $ 50,000 $ 100,000 $ 200,000 Fair Value $ 10,000 $ 50,000 $ 150,000 $ 225,000 $ (40,000) $(200,000) $ (40,000) $(200,000) Action paid $205,000 in cash for all of the above from Slacker. a) Determine if Action must record any goodwill. Show any calculations. b) Record the acquisition in Action's general journal on Feb. 16, 2023. Show: any calculations. c) Prepare any adjusting entry for amortization required as of the fiscal year end, December 31, 2023. If no amortization is required, explain why.
Blue Ray Bhd. acquired all the assets and liabilities of Sharp Bhd. on 1 July 2021. Given below are the statements of financial position of Blue Ray and Sharp Bhd. as at 1 July 2021: Blue Ray (RM’000) Sharp (RM’000) Non-Current Tangible Assets 400,000 230,000 Goodwill 50,000 Shares in Sharp (30,000) 40,000 490,000 230,000 Current Asset 56,000 36,000 Total Assets 546,000 266,000 Current Liabilities (40,000) (20,000) 506,000 246,000 Ordinary Share capital at RM1 ach 400,000 150,000 Retained Profits 106,000 96,000 506,000 246,000 The acquisition was undertaken under the following terms: Blue Ray agreed to issue 200,000,000 ordinary shares. It was agreed that the fair value of the shares of Blue Ray for the acquisitions is RM1.60. Sharp will go into liquidation. The fair value of the assets and liabilities of Sharp were estimated to be: Tangible Assets…
Blue Ray Bhd. acquired all the assets and liabilities of Sharp Bhd. on 1 July 2021. Given below are the statements of financial position of Blue Ray and Sharp Bhd. as at 1 July 2021: Blue Ray (RM’000) Sharp (RM’000) Non-Current Tangible Assets 400,000 230,000 Goodwill 50,000 Shares in Sharp (30,000) 40,000 490,000 230,000 Current Asset 56,000 36,000 Total Assets 546,000 266,000 Current Liabilities (40,000) (20,000) 506,000 246,000 Ordinary Share capital at RM1 ach 400,000 150,000 Retained Profits 106,000 96,000 506,000 246,000 The acquisition was undertaken under the following terms: Blue Ray agreed to issue 200,000,000 ordinary shares. It was agreed that the fair value of the shares of Blue Ray for the acquisitions is RM1.60. Sharp will go into liquidation. The fair value of the assets and liabilities of Sharp were estimated to be: Tangible Assets…
On July 1, 2022 the ABC Company acquired the net assets of XYZ Company for P8,000,000. The recorded assets and liabilities of XYZ Corporation on July 1, 2022, immediately before the acquisition are as follows: Cash P 800,000 Inventory 2,400,000 Property and equipment, net 4,800,000 Liabilities 1,800,000 On July 1, 2022 it was determined that the inventory of XYZ had a fair value of P1,900,000, and the property and equipment, net had a fair value of P5,600,000. What is the amount of goodwill (gain on bargain purchase) that will be reported in the books of ABC?
The T-accounts for Equipment and the related Accumulated Depreciation—Equipment for Oriole Company at the end of 2022 are shown here. Equipment Beg. bal. 75,600 Disposals 21,800 Acquisitions 45,500 End. bal. 99,300 Accumulated Depreciation—Equipment Disposals 5,000 Beg. bal. 44,700 Depr. exp. 11,500 End. bal. 51,200 In addition, Oriole’s income statement reported a loss on the disposal of plant assets of $4,000. What amount was reported on the statement of cash flows as “cash flow from sale of equipment”? (Show an amount that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Cash flow from sale of equipment $
Machine P was acquired on April 1, 2019 in exchange for 400, 000 face amount of bonds payable selling at 94, and maturing on April 1,2029 . The accountant recorded acquisition by a debit to Machinery and a credit to Bonds Payable for 400, 000 Straight line Depreciation was recorded based on a 5-year economic life and amounted to 54,000 for nine months In the computation of depreciation , residual value of 40,000 was used. What is the initial carrying amount of the PPE? What is the carrying amount if the PPE as of December 31, 2020?
Background: On December 31, 2021, Company A purchased acquired various assets from Company B as follows:and assumed liabilities does not meet the definition of a business under ASC 805.UmbrellaTableLemon squeezerThe books and records of Company B value these assets at December 31, 2021 as followsUmbrella $100Table $50Lemon squeezer $150Company B determined the fair value for these assets on January 1, 2022 to be as follows:Umbrella $80Table $20Lemon squeezer $100On December 31, 2021, Company A paid $350 for these assets. Question How should the acquired asset be valued and reflected on Company A's books on January 1, 2022? US GAAP standards used: ASC_____,EY FRD Business Combinations, p. Methodology applied: Calculation: Findings: Conclusion:
On January 2, 2030, Esko Corp. acquired all the net assets of Tolits Inc. Esko Corp. paid P6,000,000 for the net assets of Tolits Inc. On this date, the following accounts of Tolits, Inc. are as follows: Cash – P150,000; Accounts Receivable – P1,600,000; Inventories – P600,000; Property, plant, and equipment – P2,600,000; Accounts Payable – P1,400,000. On the date of acquisition, it was determined that the fair values of inventories and property, plant, and equipment were P660,000 and P3,400,000, respectively. Esko Corp. has estimated a restructuring provision of P500,000 representing costs of exiting the activity of Tolits Inc., cost of terminating the employees of Tolits Inc. Compute the goodwill or gain from acquisition. * a. P 2,950,000 b. P 1,590,000 c. P 2,090,000 d. P 2,450,000 pls. answer it asap thank you:)
9. RGW Industries purchased the net assets of SP Company for P1,300,000. A schedule of the net assets of SP Company, as recorded on SP Company's books at the time of the acquisition, is as follows: Assets Cash Receivable Inventory Land, buildings, and equipment (net) Total assets Liabilities Current liabilities Long-term debt P31,000 250,000 302,000 350,000 P933,000 Inventory Land, building and equipment Patent P90,000 185,000 P275,000 P658,000 Total liabilities Net assets (book value) The following schedule shows the differences between the recorded costs and market values of the assets of SP Company at the date of the acquisition: Cost P302,000 350,000 0 Purchased in-process research and development Existing workforce Totals P652,000 P275,000 Liabilities Determine the amount of goodwill to be recognized on the acquisition? a. P642,000 c. P74,000 b. P464,000 d. P164,000 0 0 Market P400,000 390,000 40,000 300,000 90,000 P1,220,000 P275,000
On January 1, 2022, William Corp. (qualifies as SME) paid cash of P600,000 for all the outstanding shares of Kate Company. The carrying value of the assets and liabilities of Kate on January 1, 2022 follow: Accounts Receivable Inventory • Plant & Equipment (net of Accumulated Depreciation of P220,000) Goodwill Liabilities P90,000 180,000 320,000 100,000 120,000 On January 1, 2022 Kate inventory had a fair value of P150,000 and plant & equipment (net) had a fair value of P380,000. Cost of arranging the combination are as follows: legal fees for combination, P30,000; finder's fee, P50,000; other miscellaneous direct costs, P25,000. Net income of William and Kate for 2022 amounts to P188,000 and P60,000, respectively. William received dividend of P18,000 from Kate during 2022. The PPE has original useful life of 10 years and was already held for 4 years as of date of acquisition. Determine the amount of Goodwill on the Consolidated balance sheet on December 31, 2022.
Show the solution in good accounting form Orange Company’s ledger revealed the following account balances as of December 31, 2020: Unamortized discount on bonds payable P120,000; Organization costs P100,000; Losses in early years of company P450,000; Trademarks P750,000 Patents P150,000; Amount set up by BOD as goodwill P300,000. How much should be presented as intangible assets shown In the statement of financial position?
On October 1, 2020, Generosity Company declared a property dividend of machinery payable on April 1, 2021. The carrying amount of the machinery is P4,000,000 on October 1, 2020.The machinery had the following fair value: Oct. 1, 2020 3,800,000 Dec. 31, 2020 3,600,000 April 1, 2020 3,500,000 What id the dividends payable and loss on distribution of property dividend?