On July 1, 2020, Brandon SE purchased Mills Company by paying $130,000 cash. On July 1, 2020, the fair value of the net assets of Mills Company was as follows. Buildings (net) (4 years remaining useful life) $ 30,000 Patent (4 years remaining useful life) 10,000 Land 25,000 Accounts receivable 12,000 Cash 50,000 Accounts payable 10,000 What are the effects of this combination transaction on Brandon's statements on 31/12/2020?
On July 1, 2020, Brandon SE purchased Mills Company by paying $130,000 cash. On July 1, 2020, the fair value of the net assets of Mills Company was as follows. Buildings (net) (4 years remaining useful life) $ 30,000 Patent (4 years remaining useful life) 10,000 Land 25,000 Accounts receivable 12,000 Cash 50,000 Accounts payable 10,000 What are the effects of this combination transaction on Brandon's statements on 31/12/2020?
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
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 11P
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Transcribed Image Text:On July 1, 2020, Brandon SE purchased Mills Company by paying $130,000 cash. On July 1, 2020, the fair value of the net
assets of Mills Company was as follows.
Buildings (net) (4 years remaining useful life)
$30,000
Patent (4 years remaining useful life)
10,000
Land
25,000
Accounts receivable
12,000
Cash
50,000
Accounts payable
10,000
What are the effects of this combination transaction on Brandon's statements on 31/12/2020?
Transcribed Image Text:What are the effects of this combination transaction on Brandon's statements on 31/12/2020?
No effect on income, and increases intangible assets for $15,000
No effect on income, and increases intangible assets for $23,000
No effect on income, and increases intangible assets for $21,750
increases income for $13,000, and increases intangible assets by $10,000
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