Measurement Period Adjustment with Income Effects On December 1, 2022, Placer Corporation acquired all of the assets and liabilities of Sonata Company. The acquisition generated goodwill of $60.000,000. At the date of acquisition Sonata's equipment had an estimated fair value of $40,000,000, and a 5-year life, straight-line. On March 31, 2023, new information reveals that the equipment's fair value was $49,000,000 at the date of acquisition Placer's accounting year ends on December 31, Required Prepare the journal entry or entries to record the change in valuation of Sonata's equipment on March 31, 2023, assuming the valuation change is within the measurement period, and depreciation has already been recorded through March 31. Not all drop-down answers may be required for the journal entry. If an account is not required, select "N/A" as your answer. Description Debit Credit Equipment Depreciation expense Goodwill 9000000 >>>
Measurement Period Adjustment with Income Effects On December 1, 2022, Placer Corporation acquired all of the assets and liabilities of Sonata Company. The acquisition generated goodwill of $60.000,000. At the date of acquisition Sonata's equipment had an estimated fair value of $40,000,000, and a 5-year life, straight-line. On March 31, 2023, new information reveals that the equipment's fair value was $49,000,000 at the date of acquisition Placer's accounting year ends on December 31, Required Prepare the journal entry or entries to record the change in valuation of Sonata's equipment on March 31, 2023, assuming the valuation change is within the measurement period, and depreciation has already been recorded through March 31. Not all drop-down answers may be required for the journal entry. If an account is not required, select "N/A" as your answer. Description Debit Credit Equipment Depreciation expense Goodwill 9000000 >>>
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.5E: Change in Estimate Assume that Bloomer Company purchased a new machine on January 1, 2016, for...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Measurement Period Adjustment with Income Effects
On December 1, 2022, Placer Corporation acquired all of the assets and liabilities of Sonata Company. The acquisition generated goodwill of $60,000,000. At the date of acquisition, Sonata's equipment had an
estimated fair value of $40,000,000, and a 5-year life, straight-line. On March 31, 2023, new information reveals that the equipment's fair value was $49,000,000 at the date of acquisition Placer's accounting year
ends on December 31,
Required
Prepare the journal entry or entries to record the change in valuation of Sonata's equipment on March 31, 2023, assuming the valuation change is within the measurement period, and depreciation has already
been recorded through March 31.
Not all drop-down answers may be required for the journal entry. If an account is not required, select "N/A" as your answer.
Description
Debit
Credit
Equipment
Depreciation expense
Goodwill
9000000
>>>
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