How much is the share premium and acquired fair value of Net assets ?
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Co.acquires 70% interest in W Co. its supplier of raw materials by issuing 100,000 of its own equity instruments. Par Value is at 2,000 per share. the identifiable assets of W Co. are as follows:
CA Fair Value
Net Receivable 90,000,000 70,000,000
Inventory 140,000,000 120,000,000
Land 180,000,000 200,000,000
Building 55,000,000 40,000,000
Total Assets 475,000,000 445,000,000
Liabilities
Payable 200,000,000 200,000,000
other details:
Fair Value of V and W's equity instruments are 2,030/share and 1,050/share
W incurred the following acqusition-related costs:
consultating fees 1,000,000, due diligence cost 500,000 cost of registering of shares 2,000,000
Intangibles that were unrecorderd by W Co are:
Customer list 2,000,000 Potential contract with A Co. 7,000,000 Customer contracts 12,500,000 Internet domain name (not registered) 2,000,000 trademark 25,000,000 assembled workforce 31,000,000 total intangibles 79,500,000.
V leases out its machine to W under operating lease. Term of the lease is comparable with market terms are favorable. the FV differential is 2,000,000
V shared its trade secret process with W after the business combination; trade secret's affair fair value is at 20,000,000
V also estimated a restructuring provision 60,000,000
gain on bargain purchase is 13,000,000
question: How much is the share premium and acquired fair value of Net assets ?
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- V Co.acquires 70% interest in W Co. its supplier of raw materials by issuing 100,000 of its own equity instruments. Par Value is at 2,000 per share. the identifiable assets of W Co. are as follows: CA Fair Value Net Receivable 90,000,000 70,000,000 Inventory 140,000,000 120,000,000 Land 180,000,000 200,000,000 Building 55,000,000 40,000,000 Goodwill…Problem Company owns 90 percent of Solution Dairy’s stock. The balance sheets of the two companies immediately after the Solution acquisition showed the following amounts: Problem Company Solution Dairy Assets Cash & Receivables $ 130,000 $ 70,000 Inventory 210,000 90,000 Land 70,000 40,000 Buildings & Equipment (net) 390,000 220,000 Investment in Solution Dairy 270,000 Total Assets $ 1,070,000 $ 420,000 Liabilities & Stockholders’ Equity Current Payables $ 80,000 $ 40,000 Long-Term Liabilities 200,000 100,000 Common Stock 400,000 60,000 Retained Earnings 390,000 220,000 Total Liabilities & Stockholders’ Equity $ 1,070,000 $ 420,000 The fair value of the noncontrolling interest at the date of acquisition was determined to be $30,000. The full amount of the increase over book value is assigned to land held by Solution. At the date of acquisition, Solution owed Problem $8,000 plus $900 accrued interest. Solution had recorded the….Platek Enterprises purchases 100 percent of Smith Company for P600,000. At that date Smith Company had the following book value and market values:Accounts Book value Market valueCash and receivables P25,000 P25,000Inventory 125,000 180,000Plant assets (net) 300,000 475,000Current liabilities (60,000) (60,000)Long-term debt (120,000) (120,000)Common stock (15,000)Retained earnings (255,000)What is the total purchase differential (excess of cost over book value)? P150,000 P100,000 P420,000 P330,000
- Purchase Corporation purchased 60 percent of Steal Company ownership on January 1, 20X7, for $283,500. Steal reported the following net income and dividend payments: Year Net Income Dividends Paid 20X7 $ 48,000 $ 28,000 20X8 58,000 38,000 20X9 33,000 13,000 On January 1, 20X7, Steal had $256,000 of $10 par value common stock outstanding and retained earnings of $156,000, and the fair value of the noncontrolling interest was $189,000. Steal held land with a book value of $26,500 and a market value of $34,000 and equipment with a book value of $338,000 and a market value of $378,000 at the date of combination. The remainder of the differential at acquisition was attributable to an increase in the value of patents, which had a remaining useful life of 10 years. All depreciable assets held by Steal at the date of acquisition had a remaining economic life of eight years. Required: Compute the increase in the fair value of patents held by Steal. Prepare the…Delaney Company sells, for $280,000, a 40% of the shares it owns in Hunter Company. The carrying value of the Equity Investment relating to these shares is $240,000 on the date of sale. The journal entry to record the sale assuming Delaney keeps control over Hunter includes: Select one: A. Equity investment, debit, $240,000 B. Gain, credit, $40,000 C. APIC, credit, $40,000 D. Equity investment, credit, $280,000Pawn Corporation purchased 30 percent of Shop Company’s common stock on January 1, 20X5, by issuing preferred stock with a par value of $50,000 and a market price of $120,000. The following amounts relate to Shop's balance sheet items at that date: Book Value Fair Value Assets Cash & Receivables $ 200,000 $ 200,000 Buildings & Equipment 400,000 360,000 Less: Accumulated Depreciation (100,000) Total Assets $ 500,000 Liabilities & Equities Accounts Payable $ 50,000 50,000 Bonds Payable 200,000 200,000 Common Stock 100,000 Retained Earnings 150,000 Total Liabilities & Equities $ 500,000 Shop purchased buildings and equipment on January 1, 20X0, with an expected economic life of 20 years. No change in overall expected economic life occurred as a result of the acquisition of Pawn's stock. The amount paid in excess of the fair value of Shop's reported net assets is attributed to unrecorded copyrights with a remaining useful…
- Peace Computer Corporation acquired 90 percent of Symbol Software Company’s common stock on January 2, 20X3, by issuing preferred stock with a par value of $6 per share and a market value of $8.10 per share. A total of 10,000 shares of preferred stock was issued. Balance sheet data for the two companies immediately before the business combination are as follows: Peace Computer Corporation Symbol Software Company Book Value Fair Value Book Value Fair Value Cash $ 200,000 $ 200,000 $ 50,000 $ 50,000 Other Assets 400,000 400,000 120,000 120,000 Total Debits $ 600,000 $ 170,000 Current Liabilities $ 100,000 100,000 $ 80,000 80,000 Common Stock 300,000 50,000 Retained Earnings 200,000 40,000 Total Credits $ 600,000 $ 170,000 Required: Prepare a consolidated balance sheet for the companies immediately after Peace obtains ownership of Symbol by issuing the preferred stock.On Jan 2, 20X1, ABC acquired 20% of the 400,000 ordinary shares of Yellow Co at P30 per share. The following data are applicable for 20X1 and 20X2: 20X1 20X2 Yellow dividends 40,000 48,000 Yellow profit 140,000 160,000 Yellow share market price at year end 32 31 How much is the carrying value of the Investment in associate-Yellow at Dec 31, 20X2? 2,372,000 2,442,400 2,612,000 12,042,400 On Jan 2, 20X1, ABC acquired 20% of the 400,000 ordinary shares of Yellow Co at P30 per share. The following data are applicable for 20X1 and 20X2: 20X1 20X2 Yellow dividends 40,000 48,000 Yellow profit…On January 1, 2015, Artic Company acquires an 80% interest in Calco Company for $400,000. On the acquisition date, Calco Company has the following stockholders’ equity:Common stock ($10 par). . . . . . . . . . . . . . . . . . $200,000Paid-in capital in excess of par . . . . . . . . . . . . . 100,000Retained earnings . . . . . . . . . . . . . . . . . . . . . . . 150,000Total stockholders’ equity. . . . . . . . . . . . . . . . $450,000Assets and liabilities have fair values equal to book values. Goodwill totals $50,000.Calco Company has net income of $60,000 for 2015. No dividends are paid or declared during 2015.On January 1, 2016, Calco Company sells 10,000 shares of common stock at $60 per share in a public offering.Assuming the parent uses the simple equity method, prepare all parent company entries required for the issuance of the shares.Assume the following alternative situations:1. Artic Company purchases 8,000 shares.2. Artic Company purchases 9,000 shares.3. Artic Company…
- Delta Corporation acquires 70 percent of Bravo Company’s stock. What amount of non-controlling interest is recognized on the acquisition date balance sheet if Telephone has the following account balances? Book Value Market Value Cash P10,000 P10,000 Inventory 80,000 80,000 Plant Assets (net) 350,000 350,000 Cost of Goods Sold 130,000 Depreciation Expense 20,000 Liabilities (110,000) (110,000) Common Stock (30,000) Retained Earnings (260,000) Sales (190,000) Please explain step by step with clear explanation on how it happened.Thank you.(TCO A) Adelman Company owns 45% of the outstanding voting common stock of Craig Corp. and has the ability to significantly influence the investee's operations. On January 3, 20X1, the balance in the Investment in Craig Corp. account was $462,000. Amortization associated with this acquisition is $10,000 per year. During 20X1, Craig earned a net income of $105,000 and paid cash dividends of $20,000. Previously in 20X0, Craig had sold inventory costing $28,000 to Adelman for $40,000. All but 20% of that inventory had been sold to outsiders by Adelman during 20X0. Additional sales were made to Adelman in 20X1 at a transfer price of $60,000 that had cost Craig $45,000. Only 10% of the 20X1 purchases had not been sold to outsiders by the end of 20X1.Required:(A) What amount of unrealized intra-entity inventory profit should be deferred by Adelman at December 31, 20X0?(B) What amount of unrealized intra-entity profit should be deferred by Adelman at December 31, 20X1?(C) What amount of…Strickland Industries purchased a 30% interest in Spartan, Inc. for P600,000. Spartan, Inc. has 100,000 P10 par value ordinary shares outstanding. This investment enables Strickland to exert significant influence over Spartan. During the year, Spartan earned net income of P360,000 and paid dividends of P120,000; Strickland earned net income of P48,000 and paid dividends of P160,000. At the end of the year, the shares of Spartan were trading on an organized exchange for P22 per share. On Strickland’s year-end statement of financial position, its investment in Spartan, Inc. will be valued at a.) P600,000 b.) P660,000 c.) P672,000 d.) P696,000