question 28 help pls Parent Company acquires Subsidiary Company on September1, 2020. Parent seeks an independent valuation for an item ofproperty, plant and equipment acquired in the combination,and the valuation was not complete by the time Parentauthorized for issue its financial statements for the year endedDecember 31, 2020. At the acquisition date, the item ofproperty, plant and equipment had a remaining useful life offive years with no residual value.In its 2020 annual financial statements, Parent recognized aprovisional fair value for the asset of P300,000. Fourteenmonths after the acquisition date, Parent received theindependent valuation, which estimated the asset'sacquisition-date fair value as P400,000.How much is the adjustment in goodwill as a result of themeasurement period adjustment during 2021?

The acquirer will adjust the amount of goodwill in the provisional amount in that reporting period…

Answered: How much is the adjustment in goodwill…

Business

Accounting

How much is the adjustment in goodwill as a result of the measurement period adjustment during 2021?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 8MC

See similar textbooks

Related questions

Q: It is assumed that the Cost of equity and rate of return are both constant under Walter’s Model of D...

A: Option C is incorrect because when the Cost of Equity and the Rate of Return are both equal then the...

Q: On November 27, the board of directors of Marin Company declared a $0.40 per share dividend. The div...

A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal....

Q: Which of the following would best explain an increase in receivables turnover? * A Due to problems w...

A: Receivables turnover ratio indicates how frequently the entity can collect the dues from its custome...

Q: Bulldogs Inc. expects to use 48,000 boxes of chocolate per year costing P12 per box. Inventory carry...

A: Total Boxes = 48,000 Cost per Box = P12 Inventory carrying cost = 20% Safety stock = 2,400 Order per...

Q: Which of the following statements is incorrect?

A: In order to authenticate the financial statements which has been prepared by the company and in orde...

Q: Statement I: In lumpsum liquidation, the remaining cash available after realization and payment of ...

A: Solution:- Given, Under Lumpsum Liquidation all the assets are realized or sold and the available ca...

Q: The following financial information is available for Sheridan Ltd. as at December 31 (in thousands, ...

A: Profit available to common stock holders= Profit- Preference dividend EPS= Profit available to commo...

Q: Bulldogs Inc. is a retail mail order firm that currently uses a centralized collection system that r...

Q: On January 1, 2022, P Company acquired 80% of S Company for P2,000,000. The fair value of identifiab...

A: Working: Unsold merchandise shipped from P at cost = P50,000/125% = P40,000 Unrealized profit on abo...

Q: Apr. 1. Paid the treasurer of the union the amount of union dues withheld from workers' earnings d...

A: Payroll Payroll is considered to be one of the important function in the business entity and to time...

Q: Bryant Inc. and Rizzo Co. have an exchange that lacks commercial substance. The asset given up by Br...

A: An asset is a monetary resource that an individual, corporation, or government owns or controls in t...

Q: Assume that the business combination is a pooling of interests. Prepare all journal entries on Pop's...

A: Pooling of interest is an approach that is used for the purpose of reporting the financial transacti...

Q: The Felton and Burchell Partnership has partner capital account balances as follows: Felton, Capit...

A: Admission of New Partner While making the admission of a new partner it can received in the form of ...

Q: Company’s stockholders’ equity as of December 31, 2020 is P7,308,000. On January 1, 2021, Parent acq...

A: The goodwill or gain on bargain purchase refers to the excess or short amount paid for the acquisiti...

Q: 1. Statement 1: Measurement period is relevant if Fair Value of Net Assets of acquiree includes the...

A: According to IFRS 3 : It includes transaction or an event in which acquirer obtains control over b...

Q: pare sary urnals for 1. Cash paid to Sara BD 600 2. Sold Furniture BD 15000 3 Salary Paid B D 6000 S...

A: These are the accounting transactions that are having a monetary impact on the financial statement o...

Q: Dow Deep Mining Co acquired mineral rights for S56,000,000. The mineral deposit is estimated at 70,0...

A: Formula: Depletion rate per ton = Mineral rights value / Estimated Tons

Q: Arrow Industries employs a standard cost system in which direct materials inventory is carried at st...

A: Direct Labor usage (efficiency) variance = (Actual hours worked - Standard hours allowed) x Standard...

Q: Anya Company disclosed the following accounts on December 31, 2020. 12% Bo...

A: Journal entries refer to the process of systematic documentation of the financial transactions of a ...

Q: The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be $1 per share, and there...

A: Dividend is the amount of return on the shares of an entity.

Q: Which of the following choices best describes reasonable conclusions that you might make about the t...

A: Current ratio = Current assets / Current liabilities Current ratio of A = 40,000/10,000 = 4 Current ...

Q: Pueblo Company sells a product for $88. Variable cost is $32. Pueblo could accept a special order fo...

A: Solution:- Given, Pueblo company sells product for = $88 Variable cost = $32 Pueblo could accept a s...

Q: on january 1 2020 paco comapny issued 1800 shares of 5% $105 per cumumlative preferred stock for $22...

A: Note: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-part...

Q: On January 1, 2020, B Company acquired 80% of A Company’s common stock for Php280,000 cash. At that ...

A: Net identifiable assets: Net identifiable assets include both tangible and intangible assets at the ...

Q: At December 31, 20x5 and 20x4, Rose Corp. had 180,000 shares of common stock and 10,000 shares of 6%...

A: Earnings per share refers to the amount of Net income allocated to every single shares issued and ou...

Q: Amount Percent Amount Per $ 148,000 100.00 S 148,000 10 88,800 60.00 44,400 34

A: MOS is the dollar amount in which actual sales volume exceeds the break-even sales volume. The margi...

Q: ABC Corporation declared 15% bonus issue to its ordinary shareholders on December 31,2021. As of thi...

A: No. of shares outstanding = ordinary share capital account / Par value per share No. of shares issue...

Q: An up-and-coming band is releasing their first album on Spotify on 3/4/2022. They make an initial in...

A: Here, the payment is made every two weeks. The album will be released on 2/28/2022. Payments will be...

Q: 2022, Draper Company discovered errors made in 2019-2021, its first thre years of operation 2021 202...

A: Calculations of Restated 2021 Net Income. Hence, Restated 2021 Net Income is $23,350. Working Not...

Q: 47 I. Financial accounting info. is usually used exclusively by internal parties such as managers. ...

A: Financial accounting refers to recording, analyzing and reporting of financial data of a company so ...

Q: Bulldogs Inc. deals with various clients throughout the city and is attempting to collect its accoun...

A: Total receipts=Daily receipts×Average amount=300×P5,000=P1,500,000

Q: The carrying cost curve and ordering cost curve of Bulldogs Inc.'s inventory intersect at 3,50 units...

A: the concept of economic order quantity for me is applicable where there is ideal order quantity. is ...

Q: How should negative goodwill be shown on the consolidated financial statements of the acquirer? Grou...

A: Introduction:- Negative goodwill arises, where one company (Acquirer company) purchases or acquires ...

Q: The new manager of inventory at Bulldogs Inc. is developing an inventory control system and plans to...

A: Safety stock refers to extra or additional quantity of inventory held in stock by a company in order...

Q: Compute the unrealized gains or losses. Unrealized 2$ Prepare the adjusting entry for Larkspur on De...

A: Solution:- Given, Larkspur Company has the securities in its investment portfolio on December 31, 20...

Q: Subsidiary Company was merged with Parent Corporation on December 31, 2021. In the business combinat...

A: Retained earning after combination i.e. merger of the companies is the total of the retained earning...

Q: Before preparing financial statements for the current year, the chief accountant for Crane Ltd. prov...

A: A journal entry is a form of accounting entry that is used to report a business transaction in a com...

Q: Required: Journalize the above business transactions in general journal form.

A: Journal entries recording is the first step in accounting cycle process, under which atleast one acc...

Q: A banker is reviewing the bank's current portfolio of outstanding loans based on the following infor...

A: Times interest earned = Earnings before interest and income taxes Interest expense ...

Q: Bulldogs Inc. has forecasted that its net income will be P400,000. The company has debt ratio of 30%...

A: Answer) Under residual model, dividend is paid to common stockholders after deduction of amount to b...

Q: Prosperity Company holds 40% of the voting rights of MNO Co. The remaining shares was held by thousa...

A: Protective right is the right which protect the interest of party who holds that right but does not ...

Q: b. Suppose that Jack also reported income of $8,800 from a half share of profits from a partnership....

A: AGI is an acronym and stands for the adjusted gross income of the taxpayer which is computed when ce...

Q: In the event of payroll fraud, discuss the suggestion that the human elements of control systems are...

A: Employee payroll fraud is a complex problem for small company owners in the United States. The proce...

Q: You were assigned to audit the Property, plant and equipment account of your continuing audit client...

A: Office Equipment was acquired at the beginning of 2019. Depreciation on Straight-line method with no...

Q: Mike Flannery holds the following portfolio: Stock Investment Beta A P150,000 1.40 B 50...

A: Answer) Calculation of Portfolio Beta Stock Investment Weightage Beta Weighted Beta...

Q: Bulldogs Inc. has forecasted that its net income will be P520,000. The company has an debt-to- equit...

A: Under residual model, amount of dividend paid to common stockholders is the balance of Net Income af...

Q: PARENT Corporation acquired 80% of the outstanding shares of SUBSIDIARY Company on June 1, 2022 for ...

A: Introduction' Non controlling interest means where stakeholder has less than 50 % equity and has no ...

Q: ABC Corp issued a bond for $87,000 at par. The bond will mature in 10 years when the principal will ...

A: Bond price implies for the consideration paid by an investor for acquiring bond. In provided case, b...

Q: Which of the following has the highest relative likelihood of being defaulted in paying the outstand...

A: The interest expense and earnings before interest and income taxes details for each of the company i...

Q: Paul Corporation acquired 80 percent of Saul Company on January 1, 2019, by issuing 118,000 shares o...

A: Acqusition Cost It may be incurred several cost which are related with the Acqusition cost while car...

Question

question 28 help pls

Parent Company acquires Subsidiary Company on September
1, 2020. Parent seeks an independent valuation for an item of
property, plant and equipment acquired in the combination,
and the valuation was not complete by the time Parent
authorized for issue its financial statements for the year ended
December 31, 2020. At the acquisition date, the item of
property, plant and equipment had a remaining useful life of
five years with no residual value.
In its 2020 annual financial statements, Parent recognized a
provisional fair value for the asset of P300,000. Fourteen
months after the acquisition date, Parent received the
independent valuation, which estimated the asset's
acquisition-date fair value as P400,000.
How much is the adjustment in goodwill as a result of the
measurement period adjustment during 2021?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Monitoring By the Board of Directors and Others

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Parent Company acquires Subsidiary Company on September 1, 2020. Parent seeks an independent valuation for an item of property, plant and equipment acquired in the combination, and the valuation was not complete by the time Parent authorized for issue its financial statements for the year ended December 31, 2020. At the acquisition date, the item of property, plant and equipment had a remaining useful life of five years with no residual value. In its 2020 annual financial statements, Parent recognized a provisional fair value for the asset of P300,000. Fourteen months after the acquisition date, Parent received the independent valuation, which estimated the asset’s acquisition-date fair value as P400,000. How much is the adjustment in goodwill as a result of the measurement period adjustment during 2021?
Parent Company acquires Subsidiary Company on September 30, 2020. Parent seeks an independent valuation for an item of property, plant and equipment acquired in the combination, and the valuation was not complete by the time Parent authorized for issue its financial statements for the year ended December 31, 2020. At the acquisition date, the item of property, plant and equipment had a remaining useful life of five years with no residual value.In its 2020 annual financial statements, Parent recognized a provisional fair value for the asset of P300,000. Five months after the acquisition date, Parent received the independent valuation, which estimated the asset’s acquisition-date fair value as P400,000.What is the increase in goodwill as a result of the measurement period adjustment during 2021?
Amiable Company purchased an equipment for P5,000,000 on January 1, 2020. The equipment had a useful life of 5 years with no residual value. On December 31, 2020, the entity classified the equipment as held for sale. On such date, the fair value less cost of disposal of the equipment was P3,500,000. On December 31, 2021, the entity believed that the criteria for classification as held for sale can no longer be met. Accordingly, the entity decided not to sell the equipment but to continue to use it. On December 31, 2021, the fair value less cost of disposal of the equipment was P2,700,000. requirement What is the carrying amount of the equipment on December 31, 2020 before classification as held for sale? What is the adjusted carrying amount of the equipment on December 31, 2022?
On May 1, 2021, Jazzie Co. agreed to sell the assets of its Mister Division to Shawna Inc. for $80 million. The sale was completed on December 31, 2021. Jazzie’s year ends on December 31st. The following additional facts pertain to the transaction: The Mister Division qualifies as a component of an entity as defined by GAAP. Mister's net assets totaled $48 million on Jazzie's books at the time of the sale. Mister incurred a pre-tax operating loss of $10 million in 2021. Jazzie’s income tax rate is 40%. Suppose that the Mister Division's assets had not been sold by December 31, 2021, but were considered held for sale. Assume that the fair value of these assets at December 31 was $80 million. In their 2021 income statement, Jazzie Co. would report for discontinued operations: Group of answer choices a $6 million after tax loss. a $10 million after tax loss after tax income of $13.2 million. after tax income of $22 million.
On May 1, 2021, Jazzie Co. agreed to sell the assets of its Mister Division to Shawna Inc. for $80 million. The sale was completed on December 31, 2021. Jazzie’s year ends on December 31st. The following additional facts pertain to the transaction: The Mister Division qualifies as a component of an entity as defined by GAAP. Mister's net assets totaled $48 million on Jazzie's books at the time of the sale. Mister incurred a pre-tax operating loss of $10 million in 2021. Jazzie’s income tax rate is 40%. Suppose that the Mister Division's assets had not been sold by December 31, 2021, but were considered held for sale. Assume that the fair value of these assets at December 31 was $40 million. In their 2021 income statement, Jazzie Co. would report for discontinued operations: Group of answer choices a $6 million after tax loss. a $10 million after tax loss. a $10.8 million after tax loss. an $18 million after tax loss.
Affable Company purchased an equipment for P5,000,000 on January 1, 2020. The equipment had a useful life of 5 years with no residual value. On December 31, 2020, the entity classified the equipment as held for sale. On such a date, the fair value less cost of disposal of the equipment was P 3,500,000. On December 31, 2021, the entity believed that the criteria for classification as held for sale can no longer be met. Accordingly, the entity decided not to sell the equipment but to continue to use it. On December 31, 2021, the fair value less cost of disposal of the equipment was P2,700,000 Required:1. Compute the carrying value of the equipment on December 31, 2020 before reclassification as held for sale.2. Compute the amount of impairment loss in 20203. Compute the amount to be included in profit or loss in 2021 as a result of the reclassification of the equipment to property, plant and equipment4. Compute the depreciation of the equipment for 20225.Compute the adjusted carrying…
On January 1, 2021, ABC Company sold machinery to MNO, its wholly-owned subsidiary for P450,000. The Equipment had cost ABC P560,000. The book value at the time of sale was P230,000. ABC used a 5-year life, with a salvage value o P10,000 and uses sum of the years digits depreciation. MNO will adopt this practice. On the consolidated statement of financial position at December 31, 2021, the deprecation expense should be stated at: Your answer
On May 28, 2021, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc., for $510 million. The fair value of Harman's identifiable tangible and intangible assets totaled $575 million, and the fair value of liabilities assumed by Pesky was $149 million. Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2021. Management has provided the following information: Fair value of Harman, Inc. $ 490 million Fair value of Harman's net assets (excluding goodwill) 430 million Book value of Harman's net assets (including goodwill) 518 million Required:1. Determine the amount of goodwill that resulted from the Harman acquisition.2. Determine the amount of goodwill impairment loss that Pesky should recognize at the end of 2021, if any.3. If an impairment loss is required, prepare the journal entry to record the loss.