(a)
Concept introduction: An accounting
To record: The entry that the glass company would make for acquisition.
(b)
Concept introduction: An accounting journal entry determines how the business transaction is being written and recorded for future purposes. Every entry must have the details of the transactions to make sure that no mistakes are being made.
The way in which the investment would appear on Glass’sunconsolidated
(c)
Concept introduction: An accounting journal entry determines how the business transaction is being written and recorded for future purposes. Every entry must have the details of the transactions to make sure that no mistakes are being made.
The way in which the consolidated balance sheet would appear.
Trending nowThis is a popular solution!
Chapter 2 Solutions
Advanced Accounting
- Should Gee Co. proceed with the acquisition of Bea Co.? yes or no? show your solution. The management team of Gee Co. is deciding to acquire Bea Co. an entity that sells a product that compliments its own product. The management of Bea Co. demands a price of P18,000,000 for it to agree with the acquisition by Gee Co. Relevant data gathered for annual operations are as follows: Gee Co. Вea Co. Combined Average Net Income Depreciation Expense 3,500,000 2,500,000 6,500,000 250,000 150,000 350,000 WACC 12% 15% 12.50%arrow_forwardKing’s Road recently acquired all of Oxford Corporation’s stock and is now consolidating the financial data of this new subsidiary. King’s Road paid a total of $850,000 for Oxford, which has the following accounts:a. What amount of deferred tax liability arises in the acquisition?b. What amounts will be used to consolidate Oxford with King’s Road at the date of acquisition?c. On a consolidated balance sheet prepared immediately after this takeover, how much goodwill should King’s Road recognize? Assume a 40 percent effective tax rate.arrow_forwardRequired: Should Gwapo Co. proceed with the acquisition of Beauty Co.?arrow_forward
- Arizona Corporation acquired the business Data Systems for $310,000 cash and assumed all liabilities at the date of purchase. Data's books showed tangible assets of $320,000, liabilities of $17,000, and stockholders' equity of $303,000. An appraiser assessed the fair market value of the tangible assets at $300,000 and liabilities at $17,000 at the date of acquisition. Arizona Corporation's financial condition just prior to the acquisition is shown in the following statements model. Balance Income Sheet Statement Assets Cash = + Liabilities + Tangible Assets ΝΑ + Stockholders Equity Goodwill Revenue Expenses = + ΝΑ = ΝΑ + Net Income 520,000 + Required 1.Compute the amount of goodwill acquired. 2.Record the acquisition in a financial statements model. Arizona Corporation's financial condition just prior to the acquisition is shown in the financial statements model. 3.Record the acquisition in general journal format. 520,000 NA Statement of Cash Flows ΝΑ = ΝΑ ΝΑarrow_forwardVMware, Inc. is a subsidiary of Dell Technologies Inc.. providing customers with IT resource management. In fiscal 2020, VMware acquired Avi Networks, Inc., a provider of multi- cloud application delivery services, for $335 million. This price reflected goodwill of $228 million and identifiable intangible assets of $94 million. Assume that VMware paid the acquisition price in cash, and also incurred $10 million in acquisition-related legal and advisory services, paid in cash. Required a. What was the fair value of tangibile net assets, if any, that VMware recognized at the date of acquisition? Note: Provide all answers in millions, million b. Prepare the journal entry to record this business combination. Debit > > > > > Creditarrow_forwardCarla Vista Company is considering the acquisition of Kingbird, Inc. To assess the amount it might be willing to pay, Carla Vista makes the following computations and assumptions. A. B. C. Kingbird, Inc. has identifiable assets with a total fair value of $6,016,000 and liabilities of $3,719,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 25% higher than book value, and land with a fair value 50% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Kingbird, Inc. Kingbird, Inc.'s pretax incomes for the years 2020 through 2022 were $472,100, $573,300, and $372,700, respectively. Carla Vista believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments for the following items included in pretax earnings: Depreciation on Buildings (each year) Depreciation on Equipment…arrow_forward
- If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: compute for the consolidated total assets at the date of acquisitionarrow_forwardGodoarrow_forwardAnsarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education