Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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In a pre-2009 business combination, Acme Company acquired all of Brem Company's assets and liabilities for cash.
After the combination, Acme formally dissolved Brem. At the acquisition date, the following book and fair values were
available for the Brem Company accounts:
Items
Current assets
Equipment
Trademark
Liabilities
View transaction list
Book Values
$ 88,400
131,000
Common stock
Retained earnings
In addition, Acme paid an investment bank $29,200 cash for assistance in arranging the combination.
(74,400)
(100,000)
(45,000)
Required:
a. Using the legacy purchase method for pre-2009 business combinations, prepare Acme's entry to record its
acquisition of Brem in its accounting records assuming the cash amounts of $668,400 and $457,400 were paid to the
former owners of Brem.
b. How would these journal entries change if the acquisition occurred post-2009 and therefore Acme applied the
acquisition method?
Note: If no entry is required for a transaction/event, select "No Journal entry…
Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2018, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts:Prepare Allerton’s entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts:1. $145,000.2. $110,000.
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.
What amount did Celgene include in pre-combination service compensation in the total consideration transferred? What support is provided for this treatment in the Accounting Standards Codification (see ASC 805-30-30, paragraphs 9-l3)?
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- In January 1, 2015, Fun company purchased Company A for $40,000 in cash and paid immediately. Fun company assumed all of Company A's assets and assumed Company A's liabilities. company A has assets valued at $60,000 and liabilities valued at $50,000. question: what is the amount of GOODWILL that should be recorded on Fun company's books? provide the journal entry for the acquisition of company A. Make sure to include account classifications and label debits and credits. please show work so I can understand. Thanks!arrow_forwardAllerton Company acquires all of Deluxe Company's assets and liabilities for cash on January 1, 2024, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts: Items Current assets Building Land Trademark Goodwill Liabilities Common stock Retained earnings View transaction list Required: a. and b. Prepare Allerton's journal entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts: $157,000 and $92,000. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet Next >arrow_forwardIn 2018, PepsiCo, Inc. acquired SodaStream, a sparkling water maker, for $3,343 million in cash. At the acquisition date, SodaStream's identifiable net assets had fair values as follows (in millions): Inventories $176 Property, plant and equipment 193 Intangible assets 2,124 Other net assets (93) Required Prepare the journal entry necessary to record this acquisition on PepsiCo's books, assuming it is reported as a merger. Note: Provide all answers in millions. To record acquisition of SodaStream. くくくくくく Debit Creditarrow_forward
- 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. What accounting method was used, and for what amount, to record the acquisition?arrow_forwardThe financial statements of International Foods for the year ended December 31, 2022, reported the following details of acquisitions (adapted) (Click the icon to view the details of acquisitions.) International Foods paid $131,000 cash for the acquisitions. Assume that the book value of the assets is equal to their fair value Required 1. How much goodwill did International Foods purchase as part of the 2022 acquisitions? 2. Prepare the summary journal entry to record the acquisition at December 31, 2022. 3. Assume that, in 2023, the annual review of goodwill at December 31 identified a 20 percent impairment of the goodwill acquired in 2022. Prepare the journal entry required to record this impairment Requirement 1. How much goodwill did International Foods purchase as part of the 2022 acquisitions? How much goodwill did International Foods purchase as part of the 2022 acquisitions? Details of Acquisitions Assets Cash Accounts receivable Equipment Intangibles Liabiles Long-term debl…arrow_forwardOn 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.1. Why did Celgene acquire Receptos?2. What accounting method was used, and for what amount, to record the acquisition?3. What amount did Celgene include in pre-combination service compensation in the total consideration transferred? What support is provided for this treatment in the Accounting Standards Codification (see ASC 805-30-30, paragraphs 9-13)?4. What allocations did Celgene make to the assets acquired and liabilities assumed in the acquisition? Provide a calculation showing how Celgene determined the amount allocated to goodwill.5. Describe the nature of the in-process research and development product rights acquired by Celgene in its acquisition of Receptos.6. How…arrow_forward
- Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2018, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts: BookValues FairValues Current assets $ 20,250 $ 20,250 Building 110,250 65,150 Land 17,250 28,550 Trademark 0 34,600 Goodwill 37,500 ? Liabilities (50,250 ) (50,250 ) Common stock (100,000 ) Retained earnings (35,000 ) 1&2. Prepare Allerton’s entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts: $132,000 and $86,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)arrow_forwardArizona Corp. acquired the business Data Systems for $320,000 cash and assumed all liabilities at the date of purchase. Data's books showed tangible assets of $260,000, liabilities of $40,000, and stockholder's equity of $220,000. An appraiser assessed the fair market value of the tangible assets at $250,000 at the date of acquisition. Compute the amount of good will acquired Record the qcquisition in a financial statements model When will teh goodwill be written off under the impairment rules Record the acquisition in general journal formatarrow_forwardArizona Corporation acquired the business Data Systems for $320,000 cash and assumed all liabilities at the date of purchase. Data's books showed tangible assets of $260,000, liabilities of $40,000, and stockholders' equity of $220,000. An appraiser assessed the fair market value of the tangible assets at $250,000 at the date of acquisition. Arizona Corporation's financial condition just prior to the acquisition is shown in the following statements model. Required a. Compute the amount of goodwill acquired. b. Record the acquisition in a financial statements model like the preceding one. Complete this question by entering your answers in the tabs below. Required A Required B Record the acquisition in a financial statements model. Note: In the Statement of Cash Flows column, use the initials OA for operating activities, FA for financing activities, or IA for investing activity. Enter any cash outflows or decreases to account balances with a minus sign. Leave cells blank if no input is…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_forwardOn March 1, 2020, Dorsey Corporation purchased Johnson Company. The book and fair value of Johnson's balance sheet accounts is shown below. Record the purchase on Dorsey's books under each of the following independent assumptions. a. Dorsey paid Johnson $1,000,000 b. Dorsey paid Johnson $700,000 Book Value Fair Value Cash 50,000 50,000 Accounts Receivable 90,000 75,000 Inventory 125,000 175,000 Equipment 70,000 100,000 Buildings 75,000 95,000 Land 600,000 700,000 Accounts Payable 200,000 200,000 Note Payable Retained Earnings 100,000 100,000 315,000 315,000 Common Stock 15,000 250,000 Paid in Capital For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). 380,000 380,000arrow_forwardPuncho Company is acquiring the net assets of Semos Company in exchange for common stock valued at $900,000. The Semos identifiable net assets have book and fair values of $400,000 and $800,000, respectively. Compare accounting for the acquisition (including assignment of the price paid) by Puncho with accounting for the sale by Semos.arrow_forward
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