a. Inventory $140,000 b. Land $60,000 c. Buildings and Equipment $550,000 d. Fair value of consideration given by Prize $470,000 Fair value of noncontrolling interest 117,500 Total fair value $587,500 Book value of Statue's net assets Fair value increment for: Inventory Land Buildings and equipment (net) Fair value of identifiable net assets (530,000) Goodwill $57,500 e. Investment in Statue Corporation: None would be reported; the balance in the investment account is eliminated. $450,000 20,000 (10,000) 70,000

a. Inventory $140,000 b. Land $60,000 c. Buildings and Equipment $550,000 d. Fair value of consideration given by Prize $470,000 Fair value of noncontrolling interest 117,500 Total fair value $587,500 Book value of Statue's net assets Fair value increment for: Inventory Land Buildings and equipment (net) Fair value of identifiable net assets (530,000) Goodwill $57,500 e. Investment in Statue Corporation: None would be reported; the balance in the investment account is eliminated. $450,000 20,000 (10,000) 70,000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 25CE: Cost of Intangible Assets Advanced Technological Devices Inc. acquired a patent for $91,500. It...

See similar textbooks

Similar questions

A purchased B, paying $850,000 cash. The books values and fair values of acquired assets and liabilities were: Book asset - Fair Value Current assets net: $130,000 - $125,000 Property, plant, equip: 600,000 - 750,000 Liabilities: 175,000 - 175000 A would record goodwill of: A. $0. B. $150,000 C. $345,000 D. $850,000
ABC is testing a store branch for impairment. The assets of thebranch include a building with a carrying amount of P4,000,000,equipment of P3,000,000, inventory of P2,000,000 and goodwill ofP500,000. The fair value less cost to dispose of the inventory is P2,500,000.The expected cashflows from the branch are: Year Amount1 P 2,000,0002 1,700,0003 1,500,0004 1,500,0005 1,300,000 The effective interest rate is 9%. The present value of the cashflowsbeyond year 5 is estimated to be at P400,000. 10. Value in use of the store branch11. Total Impairment Loss12. Carrying value of the building after impairment13. Carrying value of the inventory after impairment14. Carrying value of the goodwill after impairment
14 Majestic LLC purchased a factory for lump-sum of RO800,000 paid via bank. The fair value of each of component of the purchase is given below: Asset Fair Market value Land 85000 Building 155000 Equipment 460000 Calculate the amount at which each of the above components shall be recognized on purchase date and write the journal entry for recording purchase transaction. a. Dr Land Ac OMR 85000 Dr Building A/C 155000 Dr Equipment A/C 460000and Cr Cash A/C OMR 700000 b. Dr Land Ac OMR 97120 Dr Building A/C 177120 Dr Equipment A/C 525760 and Cr Cash A/C OMR 800000 c. None of the given options d. Dr Cash A/C OMR 800000 and Cr land A/c 97120 Cr Building A/C 177120 Equipment A/C 460000
Entity A acquires equipment on January 1, 20x1. Information on costs is as follows: Purchase price, gross of P10,000 trade discount 800,000 Non-refundable purchase taxes 20,000 Delivery and handling costs 40,000 Installation costs 30,000 Present value of decommissioning and restoration costs 10,000 1.) How much is the initial cost of the equipment? A. P 890,000 B. P 820,000 C. P 900,000 D. P 870,000
Laker Grind Coffee House, Inc. purchased Brian's Bakery, Inc. for $400,000. The fair market value of tangible assets received from Brian's Bakery is listed below. Building $200,000 Equipment $150,000 Furniture $50,000 Inventory $30,000 What amount of goodwill will Laker Grind Coffee House record in conjunction with this transaction? A $0 B $130,000 C) $500,000 D) $530,000
SEASH, Inc. acquired an office building, land, and equipment in a single basket purchase. The fair values were $2,400,000, $1,200,000, and $400,000 for the building, land, and equipment, respectively. The company recorded the building for $2,160,000. What was the total purchase cost for all three assets? Select one: a. $3,400,000 b. $3,600,000 c. $3,200,000 d. $3,800,000 e. $4,000,000
Cash-generating unit (adopted from Wiley publication) Sydney Ltd reported the following assets in its statement of financial position at 30 June 2020: Assets Carrying Amount Plant $570 000 Land 300 000 Patent 240 000 Office equipment 280 000 Inventory 400 000 $1 790 000 The recoverable amount of the entity was calculated to be $1 660 000. The fair value less costs of disposal of the land was $280 913. Required: Prepare the journal entry for any impairment loss at 30 June 2020. Answer: Carrying amount of assets = Recoverable amount = Impairment loss = Assuming the inventory is carried at the lower of cost and net realisable value, the allocation of the impairment loss will not involve both cash and inventory
A SE company has on its books for its proved property: P/P- tangible assets $50,000 Well and E&F $220,000 Accumulated DD&A $32,000 If the entire proved property is sold for $220,000, what will be any gain or loss? Accouinting
Company A applies IFRS. The following information pertains to Company A's intangible assets: On December 31, Year 3, Company A determines the following data regarding one of its cash-generating units (CGUs): Total CGU Liabilities Other Assets Goodwill Carrying amount $90,000 ($160,000) $200,000 $50,000 Fair value minus cost to sell $80,000 Value in use $65,000 On January 1, Year 2, Company A purchased a restaurant franchise for $360,000. The franchise has an active market, and the company applies the revaluation model as its accounting policy regarding franchises and amortizes them using the straight-line method. The estimated useful life of the franchise is 20 years with no residual value. The company revalues the franchise at the end of each year. The fair values of the franchise at the end of Years 2 and 3 are $350,000 and $330,000 respectively. During Year 1, the company incurred the following costs in relation to an internally developed patent: research…
Company A applies IFRS. The following information pertains to Company A's intangible assets: On December 31, Year 3, Company A determines the following data regarding one of its cash-generating units (CGUs): Total CGU Liabilities Other Assets Goodwill Carrying amount $90,000 ($160,000) $200,000 $50,000 Fair value minus cost to sell $80,000 Value in use $65,000 On January 1, Year 2, Company A purchased a restaurant franchise for $360,000. The franchise has an active market, and the company applies the revaluation model as its accounting policy regarding franchises and amortizes them using the straight-line method. The estimated useful life of the franchise is 20 years with no residual value. The company revalues the franchise at the end of each year. The fair values of the franchise at the end of Years 2 and 3 are $350,000 and $330,000 respectively. During Year 1, the company incurred the following costs in relation to an internally developed patent: research…
Purple Corp. purchased all of the listed assets and liabilities of Sudden Corp. for $1,600,000. The following assets and liabilities were purchased:Book Value Fair MarketValueAccounts receivables $ 140,000 $ 140,000 Inventory 168,000 256,000 Property, plant, and equipment (net) 820,000 1,040,000 Patent 0 276,000 Liabilities (170,000 ) (170,000 )________________________________________ Required:1. What is the appropriate amount that would be recorded for goodwill? 2. Prepare the journal entry for the acquisition. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
On 30 June 2018, HTL Bhd classifies a business segment as a disposal group for sale. The carrying amount and the impairment loss recognised are as follows: Before RM'million Impairment RM'million After RM'million Goodwill allocated 50 950 - Property, at revalued amount 80 (13.3) 66.7 Plant and equipment, at cost 100 (16.7) 83.3 AFS investment at fait value 40 - 40 Other monetary assets 30 - 30 Net amount 300 (80) 220 On 31 December 2018, the fair value of the AFS investment increase to RM45m. On this date, HTL Bhd signs an agreement with a third party to dispose of the business for a consideration of RM240m. Costs to sell are estimated at 3% of the consideration. Required: Compute the reversal of impairment loss that shall be recogniZed on 31 December 2018.