Only Part B please and thank you!E2.20 Business Combination Versus Asset Acquisition As part of a project, Webflow Inc. acquiresthese assets from Digital Sea Company (in millions):Cash....Trading debt investmentsEquipmentIn-process R&DFair Value$ 4624060The in-process R&D has no alternative future use. Webflow pays $335 million in cash for the acquiredassets, and also pays $5 million in cash for legal and advisory costs.Requireda.b.Prepare the journal entry to record the acquisition if it qualifies as a business combination.Prepare the journal entry to record the acquisition if it is an asset acquisition. Assume the cash andtrading investments are nonqualifying assets.

As per the given situation, the amount of purchase consideration will be allocated over the acquired…

Answered: Only Part B please and thank you! E2.20…

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter15: International Corporate Governance And Control

Section: Chapter Questions

Problem 1CT

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Only Part B please and thank you! E2.20 Business Combination Versus Asset Acquisition As part of a project, Webflow Inc. acquires these assets from Digital Sea Company (in millions): Cash.. Trading debt investments Equipment In-process R&D Fair Value $4 6 240 60 The in-process R&D has no alternative future use. Webflow pays $335 million in cash for the acquired assets, and also pays $5 million in cash for legal and advisory costs. Required a. Prepare the journal entry to record the acquisition if it qualifies as a business combination. b. Prepare the journal entry to record the acquisition if it is an asset acquisition. Assume the cash and trading investments are nonqualifying assets.
Business Combination Versus Asset Acquisition As part of a project, Webflow Inc. acquires these assets from Digital Sea Company (in millions) Fair Value Cash Trading debt investments Equipment In-process R&D 240 60 6 The in-process R&D has no alternative future use. Webflow pays $335 million in cash for the acquired assets, and also pays $5 million in cash for legal and advisory costs. Note: Provide all answers in millions and round answers to the nearest whole number. For example, 16,355,000 would be 16. a. Prepare the journal entry to record the acquisition if it qualifies as a business combination. Debit Credit : 0 : : : : Cash To record the business combination 0 0 O 0 0 0 O O 0 0 0 0 340
Business Combination Versus Asset Acquisition As part of a project, Webflow Inc. acquires these assets from Digital Sea Company (in millions): Fair Value $4 Cash Trading debt investments Equipment in process R&D 6 240 60 The in-process R&D has no alternative future use. Webflow pays $335 million in cash for the acquired assets, and also pays $5 million in cash for legal and advisory costs Note: Provide all answers in millions and round answers to the nearest whole number. For example. 16.355.000 would be 16. a Prepare the journal entry to record the acquisition if it qualifies as a business combination. Debit Credit Cash to record the business combination 0 0 0 0 0 D O 0 10 0 0 0 340 it is an ecat acnuutine Ama the cash and die thindacate
Q17: a) Acquisition of Assets for Cash, Master Corporation wants to buy certain fixed assets of Smith Corporation. However, Smith Corporation wants to dispose of its entire business. The balance sheet of Smith follows: ASSETS Cash $2,000 Accounts receivable 8,000 Inventories 20,000 Equipment 1 10,000 Equipment 2 20,000 Equipment 3 35,000 Building 90,000 Total assets $185,000 LIABILITIES AND STOCKHOLDERS' EQUITY Total liabilities $80,000 Total stockholders equity 105,000 Total liabilities and stockholders', equity $185,000 Master needs only equipment 1 and 2 and the building. The other assets excluding cash can be sold for $35,000, Smith wants $48,0X) for the entire business. It is anticipated that the after-tax cash inflows from the new equipment will he $30,000 a year for the next 8 years. The cost of capital is 12 percent. (1) What is the initial net cash outlay? (2) Should the acquisition be made?
Firm A acquires firm B when firm B has a book value of assets of $345 million and a book value of liabilities of $130 million. Firm A actually pays $365 million for firm B. This purchase would result in goodwill for firm A equal to. Multiple Choice $215 million $365 million $150 million Help Save & Exit $345 million S
If the company's assets in TL: cash 100.000, accounts receivable 50.000, inventory 150.000, and building 200.000 (market value 300.000) and the liabilities 300.000. If the price paid to acquire company 400.000 TL, how much is the goodwill under market value approach? Select one: a. 100.000 b. 300.000 c. 200.000 d. 150.000
E3.5 Acquisition analysis, including fair value adjustment for plant and equipment (Section 3.6.2) On 1 October 20XO, EF Ltd acquired all the issued ordinary shares of GH Ltd. The terms of the acquisition agreement specified that EF Ltd must pay the existing shareholders of GH Ltd $1.5million immediately and a further $1.5million on 30 September 20X1. The incremental cost of short-term finance to EF Ltd is 10% p.a. At acquisition date, the issued capital and reserves of GH Ltd were as follows: Issued capital 1 200000 Retained eamings 1/10/20X0 1400000 At 1 October 20xO, the plant and equipment of GH Ltd had a carrying amount that was $150000 less than its fair value. The company income tax rate is 30%. REQUIRED (a) Prepare the general journal entries for the accounting records of EF Ltd to record: (i) the investment in GH Ltd on 1 October 20X0 (ii) the cash payment of the $1500 000 on 30 September 20X1.
Suppose that an acquirer decides to pay a 25% premium to buy Uber. The book value of Uber’s net assets is $6.7 million. The fair value of Uber’s net assets is estimated at $7 million. What amount of goodwill will be recorded in this acquisition? Question 14Answer a. $75,000 b. $8,750,000 c. $1,675,000 d. $1,750,000
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?
hi i need help with this questions with the 3 question Adams, Inc., acquires Clay Corporation on January 1, 2020, in exchange for $732,300 cash. Immediately after the acquisition, the two companies have the following account balances. Clay’s equipment (with a five-year remaining life) is actually worth $604,900. Credit balances are indicated by parentheses. Adams Clay Current assets $ 326,000 $ 290,000 Investment in Clay 732,300 0 Equipment 781,900 526,000 Liabilities (280,000 ) (170,000 ) Common stock (350,000 ) (150,000 ) Retained earnings, 1/1/20 (1,210,200 ) (496,000 ) In 2020, Clay earns a net income of $62,700 and declares and pays a $5,000 cash dividend. In 2020, Adams reports net income from its own operations (exclusive of any income from Clay) of $193,000 and declares no dividends. At the end of 2021, selected account balances for the two companies are as follows: Adams Clay Revenues $ (452,000 ) $…
Blue sky company’s balance sheet dated 12/31/2020 reports 6 million And assets in 2.4 million in liabilities book values for all the firms assets, approximate their fair values except for land which has the book value that is 360,000 lower than it’s fair value on December 31 Horatio corporation pay 6.12 million to acquire blue sky as a result of the purchase, Horacio should record a Goodwill amount of. please give me answer fast
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 $40,000 35,000 Dynamo's financial condition just prior to the acquisition of these assets is shown in the following statements model: Assets Rev. Cash Flow Cash 90,000 + Patent NA Goodwill NA Liab. + Equity NA + 90,000 Exp. W Net Inc. NA NA NA NA 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 like the one shown earlier Complete this question by entering your answers in the tabs below. Required A Required t Show the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model like the one shown earlier. (In the Cash Flo initials OA to designate operating activity, IA for investing activity, FA for…

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