Company A entered into a contract to purchase the assets of Company B except for cash, accounts receivable. Company A will provide Company B with enough funds to cover the liquidation of the business including accrued expenses. Under the contract, only the amount to pay out the loan was required at settlement. The balance is to be paid within 30 days of settlement. Company A will issue Company B shareholders one of its shares for every 5 of their Company B shares. Settlement occurred on 1 July 2022. Company A shares were valued at $12.25 per share. Company A incurred $9,000 in acquisition related expenses and $15,100 in share issue costs. Attached is a list of net fair value of assets and liabilities as estimated by Company A. The following costs also need to be covered by Company A Accrued employee benefits $43,000 Accrued loan interest to 1 July 2022 $15,680 Other accrued expenses $7,862 Other liquidation costs $8,920 1) Prepare and the acquisition analysis related journal entries of Company A to record its acquisition of Company B at 1 July 2022.
Company A entered into a contract to purchase the assets of Company B except for cash, accounts receivable. Company A will provide Company B with enough funds to cover the liquidation of the business including accrued expenses. Under the contract, only the amount to pay out the loan was required at settlement. The balance is to be paid within 30 days of settlement. Company A will issue Company B shareholders one of its shares for every 5 of their Company B shares.
Settlement occurred on 1 July 2022. Company A shares were valued at $12.25 per share. Company A incurred $9,000 in acquisition related expenses and $15,100 in share issue costs.
Attached is a list of net fair value of assets and liabilities as estimated by Company A.
The following costs also need to be covered by Company A
Accrued employee benefits $43,000
Accrued loan interest to 1 July 2022 $15,680
Other accrued expenses $7,862
Other liquidation costs $8,920
1) Prepare and the acquisition analysis related
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Why isn't the $900,000 loan taken into account when calculating
by Bartleby ExpertThank you for your response. Can you please show calculations on how you arrived at the $72,560 portion of
by Bartleby Expert
