Company A purchased Company B for $156 cash. At the time of purchase, Company B had the following information available regarding assets and liabilities: Book Value Fair Value Current Assets $63 $55 Long-Term Assets $100 $101 Current Liabilities $37 $37 Long-Term Liabilities $48 $46 What amount of goodwill should Company A record?

Company A purchased Company B for $156 cash. At the time of purchase, Company B had the following information available regarding assets and liabilities: Book Value Fair Value Current Assets $63 $55 Long-Term Assets $100 $101 Current Liabilities $37 $37 Long-Term Liabilities $48 $46 What amount of goodwill should Company A record?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 10PA: Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth...

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Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth $4,500,000. A. What is the amount of goodwill in this transaction? B. What is Buchanans journal entry to record the purchase of McLaren? C. What journal entry should Buchanan write when the company internally generates additional goodwill in the year following the purchase of McLaren?
Farm Fresh Agriculture Company purchased Sunny Side Egg Distribution for $400,000 cash when Sunny Side had net assets worth $390,000. A. What is the amount of goodwill in this transaction? B. What is Farm Fresh Agriculture Companys journal entry to record the purchase of Sunny Side Egg Distribution? C. What journal entry should Farm Fresh Agriculture Company write when the company tests for impairment and determines that goodwill is worth $1,000 in the year following the purchase of Sunny Side?
Assume the same information as in RE11-3, except that Albany Corporation purchased the asset on April 1, Year 1. Calculate the depreciation for Year 1 and Year 2 using the double-declining-balance method. Round to the nearest dollar.
(d) Ebersole, Inc. has been concerned about whether intangible assets could generate cash in case of liquidation. As a consequence, goodwill arising from a purchase transaction during the current year and recorded at $750,000 was written off as follows. Retained Earnings 750,000 Goodwill 750,000
Arizona 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 format
Loop Pole Co., acquired all the assets and current liabilities of North Pole Co.,. The North Pole Co., details as follows, Cash OMR 20,000, Building OMR 30,000, Equipment OMR 50,000, Creditors OMR 10,000 and Retained earnings OMR 30,000. Calculate goodwill or capital reserve. Select one: a. Capital Reserve OMR 90,000 b. Goodwill OMR 90,000 c. Goodwill OMR 70,000 d. Capital reserve OMR 70,000
S Company had the following balances at the time it was acquired by P Company:Cash P36,000Accounts receivable 457,000Inventories 120,000Property, plant and equipment 696,400Goodwill 200,000Accounts payable 350,800P Company paid P1.4M for the net assets of S Company. It was determined that fair market values of inventories and property, plant and equipment were P133,000 and P900,000, respectively.An assumed contingent liability with a fair value amounting to P20,000 and such amount is considered a reliable measurement. Also, a P50,000 future losses or reorganization/ restructuring costs are expected to be incurred as a result of the business combination.In the books of P Company, how will be the amount of Goodwill arising from business combination?
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
Lake Incorporated purchased all of the stock of Huron Company, paying $950,000 cash. Lake also assumed all of the liabilities of Huron. Book values and fair values of the acquired assets and liabilities were: Book value Fair value Current assets (net) $130,000 $125,000 Property, plant & equipment (net) 600,000 750,000 Liabilities 150,000 175,000 Required:What amount of Goodwill should Lake Inc. record in connection with this purchase?
Floyd Company purchases Haeger Company for $2,400,000 cash on January 1, 2021. The book value of Haeger Company’s net assets, as reflected on its December 31, 2020 balance sheet is $1,860,000. An analysis by Floyd on December 31, 2020 indicates that the fair value of Haeger’s tangible assets exceeded the book value by $180,000, and the fair value of identifiable intangible assets exceeded book value by $135,000. How much goodwill should be recognized by Floyd Company when recording the purchase of Haeger Company?
First Company purchased Second Company for $19,000,000 cash. At the time of purchase, Second Company's assets had a market value of $28,000,000 and the liabilities had a market value of $13,000,000. At the time of the purchase, Second Company's assets had a book value of $15,000,000, and the liabilities had a book value of $9,000,000. What amount of goodwill is recorded?
The following assets are exchanged between Company A and Company B: Company A Company B Asset original cost $53,400 $65,100 Accumulated depreciation 32,630 39,600 Net book value 20,770 25,500 Fair value of asset 24,200 28,600 In addition, Company A paid Company B $4,400 cash.Required:Prepare the journal entry to record the transaction for Company A and B