Chapter 2, Problem 32P

On June 30, 2018, Streeter Company reported the following account balances:On June 30, 2018, Princeton Company paid $310,800 cash for all assets and liabilities of Streeter, which will cease to exist as a separate entity. In connection with the acquisition, Princeton paid $15,100 in legal fees. Princeton also agreed to pay $55,600 to the former owners of Streeter contingent on meeting certain revenue goals during 2019. Princeton estimated the present value of its probability adjusted expected payment for the contingency at $17,900.In determining its offer, Princeton noted the following pertaining to Streeter:• It holds a building with a fair value $43,100 more than its book value.• It has developed a customer list appraised at $25,200, although it is not recorded in its financial records.• It has research and development activity in process with an appraised fair value of $36,400. However, the project has not yet reached technological feasibility and the assets used in the activity…

On June 1, 2021, Cline Company paid P800,000 cash for the assets and liabilities of Renn Corp. The carrying values for Renn's assets and liabilities on June 1, 2021 follow: Cash - P150,000; Accounts receivable - P180,000; Capitalized software costs - P320,000; Goodwill - P100,000; and Liabilities - P130,000. On June 1, 2021, Renn's accounts receivable had a fair value of P140,000. Additionally, Renn's in-process and development costs was estimated to have a fair value of P200,000. Renn Corp. had a contingent liability of P20,000, the fair value of which was P15,000. Renn agreed to indemnify Cline for P10,000 for the contingent liability. All other items were stated at their fair values. On Cline's June 1 balance sheet. How much is reported for goodwill?    A. P90,000 B. P85,000 C. P130,000 D. P125,000

On December 31, 2021, the end of the fiscal year, California Microtech Corporation completed the sale of its semiconductor business for $10 million. The semiconductor business segment qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $8 million. The loss from operations of the segment during 2021 was $3.6 million. Pretax income from continuing operations for the year totaled $5.8 million. The income tax rate is 25%. Prepare the lower portion of the 2021 income statement beginning with income from continuing operations before income taxes. Ignore EPS disclosures. (Amounts to be deducted and negative amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions.) CALIFORNIA MICROTECH CORPORATION Partial Income Statement For the Year Ended December 31, 2021 Income from continuing operations before income taxes Income tax expense Income from continuing operations Discontinued operations: Loss…