Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 2, Problem 2.9.1P
To determine
Introduction:
Value Analysis Schedule compare the fair value of net assets of the firm and the price paid for it which is further utilized to determine
Determination and Distribution of Excess Schedule compare the book value and fair value of all the subsidiary. It also shows the adjustments made in each subsidiary account.
To prepare: Value Analysis as well as Determination and distribution of excess schedule.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Asap
On August 27, 2015, Celgene Corporation acquired all of the outstanding stock of Receptos, Inc., in exchange for $7.6 billion in cash. Referring to Celgene's 2015 financial statements and its July 14, 2015, press release announcing the acquisition, answer the following questions regarding the Receptos acquisition.
Why did Celgene acquire Recentos?
Company Aero is about to acquire 100% of company Berry. Company Berry has identifiable net assets with book value of $300,000 and $500,000 respectively. As payment Company Aero will issue common stock with a fair value of $75,000. How should the transaction be recorded if the acquisition is:a) An acquisition of net assets?b) An acquisition of Company B’s common stock and Company B remains a separate legal entity?
Chapter 2 Solutions
Advanced Accounting
Ch. 2 - Prob. 1UTICh. 2 - Prob. 2UTICh. 2 - Prob. 3UTICh. 2 - Prob. 4UTICh. 2 - Prob. 5UTICh. 2 - Prob. 6UTICh. 2 - Santos Corporation is considering investing in...Ch. 2 - Prob. 2.1ECh. 2 - Prob. 2.2ECh. 2 - Prob. 3.1E
Ch. 2 - Prob. 3.2ECh. 2 - Prob. 4.1ECh. 2 - Prob. 4.2ECh. 2 - Prob. 4.3ECh. 2 - Prob. 5.1ECh. 2 - Prob. 5.2ECh. 2 - Prob. 6.1ECh. 2 - Prob. 6.2ECh. 2 - Prob. 7.1ECh. 2 - Prob. 7.2ECh. 2 - Prob. 8.1ECh. 2 - Prob. 9.1ECh. 2 - Prob. 9.2ECh. 2 - Prob. 9.4ECh. 2 - Prob. 2A.1AECh. 2 - Prob. 2.1.1PCh. 2 - Prob. 2.1.2PCh. 2 - Prob. 2.2.1PCh. 2 - Prob. 2.2.2PCh. 2 - Prob. 2.2.3PCh. 2 - Prob. 2.3.1PCh. 2 - Prob. 2.3.2PCh. 2 - Prob. 2.3.3PCh. 2 - Prob. 2.4.1PCh. 2 - Prob. 2.4.2PCh. 2 - Prob. 2.4.3PCh. 2 - Prob. 2.5.1PCh. 2 - Prob. 2.5.2PCh. 2 - Prob. 2.5.3PCh. 2 - Prob. 2.6.1PCh. 2 - Prob. 2.6.2PCh. 2 - Prob. 2.7.1PCh. 2 - Prob. 2.7.2PCh. 2 - Prob. 2.8.1PCh. 2 - Prob. 2.8.2PCh. 2 - Prob. 2.9.1PCh. 2 - Prob. 2.9.2PCh. 2 - Prob. 2.10.1PCh. 2 - Prob. 2.11.1PCh. 2 - Prob. 2.12.1PCh. 2 - Prob. 2.12.2PCh. 2 - Prob. 2.13.1PCh. 2 - Prob. 2.13.2PCh. 2 - Prob. 2.14.1PCh. 2 - Prob. 2.14.2PCh. 2 - Prob. 2.15.1PCh. 2 - Prob. 2.15.2PCh. 2 - Prob. 2A.1.1APCh. 2 - Prob. 2A.1.2APCh. 2 - Prob. 2.1.1CCh. 2 - Prob. 2.1.2C
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Nascent, Inc., acquires 60 percent of Sea-Breeze Corporation for $414,000 cash on January 1, 2015. The remaining 40 percent of the Sea-Breeze shares traded near a total value of $276,000 both before and after the acquisition date. On January 1, 2015, Sea-Breeze had the following assets and liabilities:The companies’ financial statements for the year ending December 31, 2018, follow:Answer the following questions:a. How can the accountant determine that the parent has applied the initial value method?b. What is the annual excess amortization initially recognized in connection with this acquisition?c. If the parent had applied the equity method, what investment income would the parent have recorded in 2018?d. What amount should the parent report as retained earnings in its January 1, 2018, consolidated balance sheet?e. What is consolidated net income for 2018 and what amounts are attributable to the controlling and noncontrolling interests?f. Within consolidated statements at January 1,…arrow_forwardDEF company acquired the assets and assumed liabilities of GHI Company on January 1, 2022 by paying P3,000,000 and issuing its own ordinary shares. The comparison of the acquirer’s balance sheet before and after business combination transaction is as follows: Balance sheet before Acquisition Balance Sheet after Acquisition Total Assets 13,545,000 17,595,000 Total Liabilities 3,760,000 ? Total SHE 9,785,000 ? The fair value of the identifiable net asset of the acquiree is P4,835,000 and the book value of acquiree’s liabilities amounting to P1,300,000 is lower compared to its fair value by P350,000. DEF company paid acquisition related costs amounting to P50,000. What is the fair market value of the ordinary shares issued by the acquirer? a. 2,500,000 b. 2,400,000 c. 2,480,000 d. 2,450,000arrow_forwardCardo co purchases the net assets of allana co by issuing 50000 shares of their 20 par value shares with a fair value of 40 per share , pays 100000 cash, and payin direct and indirect cost of 75000 and 50000 respectively, determine the total amount of assets to be reported by Cardo Co. after the acquisitionarrow_forward
- S acquired 100 percent of F for P275,000. At the date of acquisition, F had the following book and market values: (see image below) What is the amount of the “Investment in F” account on S’s financial records at the acquisition date? What amount of pre-acquisition earnings is eliminated in the acquisition date worksheet elimination? Please answer in good accounting form. Thank you!arrow_forwardCompany X acquires 100 percent of the voting shares of Company Y for $275,000 on December 31, 2008. The fair value of the net assets of Company X at the date of acquisition was $300,000. This is an example of a(n): Select one: a. extraordinary loss b. revaluation adjustment c. bargain purchase d. positive differentialarrow_forwardplease answer it with a solution. REQUIRED: DETERMINE THE FAIR VALUE OF THE SHARES ISSUED BY BENI CO. TO ACQUIRE PATTY.arrow_forward
- On January 1, 2022, Pacer Corporation (Pacer) acquired 80% of Sprint Ltd. (Sprint) Corp. for $500,000. Please uses the cost method to account for its investment. On January 1, 2022, Sprint's retained earnings and common shares were $350,000 and $110,000, respectively. Sprint's book values did not differ materially from its fair values on the date of acquisition with the following exceptions: • Inventory had a fair value that was $20,000 higher than its book value. This inventory was sold to outsiders during 2022. • A patent (which had not previously been accounted for) was identified on the acquisition date with an estimated fair value of $15,000. The patent had an estimated useful life of 3 years. The financial statements of Pacer and Sprint for the year ended December 31, 2023 are shown below: Income Statements Pacer Corporation Sprint Ltd. Sales $500,000 $300,000 Other revenues 300,000 120,000 Less: expenses Cost of goods sold 400,000 240,000 Depreciation/amortization…arrow_forwardPeer, Inc. acquires 75 percent of Sea-breeze Corporation for P600,000 cash on January 1, 2016. The remaining percent of the Sea-breeze shares traded near a total value of 200,000 both before and after the acquisition date. NCI is measured on a full basis .On January 1, 2016, Sea-breeze had the following assets and liabilities: Book Value Fair Value Current Assets P 250,000 P 250,000 Land 100,000 100,000 Building (net) – 5-year-year life 400,000 350,000 Equipment (net) – 8-year life 300,000 400,000 Patent (10-year life) -0- 50,000 Accounts Payable (200,000) (200,000) Bonds Payable – 5-years (150,000) (175,000) Net P 700,000 P 775,000 Common Stock P 650,000 Retained Earnings P 50,000 The companies’ financial statements for the year ending December 31, 2016 using cost method are as follows: Peer Sea-Breeze Revenue P (800,000) P (250,000) Operating expenses…arrow_forwardAssume that ayisiyiniwiwinak Corp. paid $19 million to purchase 10-Trees Inc. Below is a summary of the balance sheet of 10-Trees Inc. at the time of the ayisiyiniwiwinak Corp. acquisition (amounts are given in million $). The fair value of 10-Tree Inc.'s non-current assets was higher than the book value and amounted to $24 at that time. Assets Current assets Non-current assets Total assets 6 18 24 Liabilities Current liabilities Non-current liabilities Total liabilities Shareholders' equity Common shares Retained earnings Total shareholders' equity Total liabilities and shareholders' equity 8 10 18 2 4 6 24 Requirement 1: Based on the information provided above, fill Blanks 1 and 2. Blank #1: What is the goodwill resulting from this transaction? Enter your response as a plain number (no $-signs or decimals).arrow_forward
- Born Corporation agrees to acquire the net assets ofWren Corporation on January 1, 2015.Wren has the following balance sheet on the date of acquisition:An appraiser determines that in-process R&D exists and has an estimated value of $20,000. The appraisal indicates that the following assets have fair values that differ from their book values: Fair ValueInventory . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 98,000Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 340,000Trademark . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000Use value analysis to prepare the entry on the books of Born Corporation to acquire the net assets ofWren Corporation under each of the following purchase price scenarios:1. Purchase price is $540,000.2. Purchase price is $350,000.arrow_forwardOn January 1, 2020, Allan Company bought a 15 percent interest in Sysinger Company. The acquisition price of $184,500 reflected an assessment that all of Sysinger’s accounts were fairly valued within the company’s accounting records. During 2020, Sysinger reported net income of $100,000 and declared cash dividends of $30,000. Allan possessed the ability to significantly influence Sysinger’s operations and, therefore, accounted for this investment using the equity method. On January 1, 2021, Allan acquired an additional 80 percent interest in Sysinger and provided the following fair-value assessments of Sysinger’s ownership components: Consideration transferred by Allan for 80% interest $ 1,400,000 Fair value of Allan's 15% previous ownership 262,500 Noncontrolling interest's 5% fair value 87,500 Total acquisition-date fair value for Sysinger Company $ 1,750,000 Also, as of January 1, 2021, Allan assessed a $400,000 value to an unrecorded…arrow_forwardOn January 1, 2023, Novak Corporation, a public company following IFRS, acquired 15,900 of the 53,000 outstanding common shares of Noah Corp. for $22 per share. Noah's statement of financial position reported the following information at the date of the acquisition: Assets not subject to depreciation $289,800 Assets subject to depreciation 860,100 Liabilities 150,100 Additional information: 1. On the acquisition date, the fair value is the same as the carrying amount for the assets that are not subject to depreciation and for the liabilities. 2. 3. 4. On the acquisition date, the fair value of the assets that are subject to depreciation is $964,100. These assets had a remaining useful life of eight years at that time. Noah reported 2023 net income of $104,000 and paid dividends of $5,000 in December 2023. Noah's shares are not actively traded on the stock exchange, but Novak has determined that they have a fair value of $21 per share on December 31, 2023. (a) Your answer is partially…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you