Poppy Corporationacquires Stevens Company,paying the owners of Stevens 1,000,000 newshares with a par value of $0.50 per share and afair value of $50 per share at the date ofacquisition. Poppy also incurs cash registrationfees of $100,000 and consulting fees of$700,000. Included in the agreement is acontingency guaranteeing Stevens shareholdersto pay $400,000 if sales increase 5% in thecurrent year. Poppy' contingency is almostcertain and it is valued at $400,000.What is Poppy's reported acquisition cost?

Given that, Poppy issue 1,000,000 shares to stevens. Par value of share = $0.50 Fair value of share…

Answered: Poppy Corporation acquires Stevens…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter7: Corporations: Reorganizations

Section: Chapter Questions

Problem 44P

See similar textbooks

Similar questions

Prepare general journal entries for the following transactions, identifying each transaction by letter: (a) Gnu Company issued 5,000 shares of 1 par common stock to the Prendergas law firm as partial payment of fees incurred to incorporate the business. Gnu was short of cash, so Prendergas agreed to accept 10,000 cash and the shares of common stock in full settlement of its bill for 55,000. (b) Gnu issued 50,000 shares of 1 par common stock in exchange for a parcel of land for building a shopping plaza. (The list price for the land was 400,000; a similar parcel in the same area sold last week for 380,000. During the past month, the price at which Gnus common stock has traded on the open market has ranged from 5 to 12 per share. Two trades occurred yesterday at 7 and 10 per share.) (c) Gnu purchased 10,000 shares of 1 par value common treasury stock for 70,000. (This is the only treasury stock that Gnu holds.) (d) Gnu sold 4,000 shares of common treasury stock for 32,000. (e) Gnu sold 5,000 shares of common treasury stock for 30,000.
Peach Company paid $250,000 in cash and issued 80,000 ordinary shares of $10 par value on January 1, X5, at a price per share $15, and issue a three-year note with a coupon rate of 4% (equivalent to effective interest rate) for $550,000 to acquire 100% of the Peach Company right. Based on the integration of the combined business, Taode Company intends to terminate a certain department of Taosi Company, and the cost of closing the relevant department is estimated to be $72,000. In this merger, the transfer consideration of Taode Company is:
If CARDO Co purchases the net assets of SYANO Co by issuing 4,000 shares of their P10 par valueshares with a fair value of P35 per share, a P40,000 direct cost and a P50,000 stock issue cost howeverremain unpaid. The companies also agreed on the following: CARDO guarantees the prices of there stocks and promises to pay the peso decline in theirshares within one year. CARDO Co promises to pay the stockholders of SYANO Co an additional P100,00 if the netincome of the company in the next year will be more than P500,000. CARDO estimates thatthere is an 80% probability of achieving the target income. REQUIREMENTS:A. Consolidated Total Assets at the date of acquisitionB. Consolidated Equity at the date of acquisition
If CARDO Co purchases the net assets of SYANO Co by issuing 4,000 shares of their P10 par value shares with a fair value of P35 per share, a P40,000 direct cost and a P50,000 stock issue cost however remain unpaid. The companies also agreed on the following: CARDO guarantees the prices of there stocks and promises to pay the peso decline in theirshares within one year. CARDO Co promises to pay the stockholders of SYANO Co an additional P100,00 if the net income of the company in the next year will be more than P500,000. CARDO estimates that there is an 80% probability of achieving the target income. REQUIREMENTS:A. Consolidated Total Assets at the date of acquisitionB. Consolidated Equity at the date of acquisition
If CARDO Co purchases the net assets of SYANO Co by issuing 4,000 shares of their P10 par value shares with a fair value of P35 per share, a P40,000 direct cost and a P50,000 stock issue cost however remain unpaid. The companies also agreed on the following: CARDO guarantees the prices of there stocks and promises to pay the peso decline in their shares within one year. CARDO Co promises to pay the stockholders of SYANO Co an additional P100,00 if the net income of the company in the next year will be more than P500,000. CARDO estimates that there is an 80% probability of achieving the target income. Compute for the Consolidated Total Assets at the date of acquisition.
If CARDO Co purchases the net assets of SYANO Co by issuing 4,000 shares of their P10 par value shares with a fair value of P35 per share, a P40,000 direct cost and a P50,000 stock issue cost however remain unpaid. The companies also agreed on the following:  CARDO guarantees the prices of there stocks and promises to pay the peso decline in their shares within one year.  CARDO Co promises to pay the stockholders of SYANO Co an additional P100,00 if the net income of the company in the next year will be more than P500,000. CARDO estimates that there is an 80% probability of achieving the target income. Compute for thetotal assets at the date of acquisition
If CARDO Co purchases the net assets of SYANO Co by issuing 4,000 shares of their P10 par value shares with a fair value of P35 per share, a P40,000 direct cost and a P50,000 stock issue cost however remain unpaid. The companies also agreed on the following:  CARDO guarantees the prices of there stocks and promises to pay the peso decline in their shares within one year.  CARDO Co promises to pay the stockholders of SYANO Co an additional P100,00 if the net income of the company in the next year will be more than P500,000. CARDO estimates that there is an 80% probability of achieving the target income. compute for the consolidated total equity at the date of acquisition
If CARDO Co purchases the net assets of SYANO Co by issuing 4,000 shares of their P10 par value shares with a fair value of P35 per share, a P40,000 direct cost and a P50,000 stock issue cost however remain unpaid. The companies also agreed on the following: CARDO guarantees the prices of there stocks and promises to pay the peso decline in their shares within one year. CARDO Co promises to pay the stockholders of SYANO Co an additional P100,00 if the net income of the company in the next year will be more than P500,000. CARDO estimates that there is an 80% probability of achieving the target income. Compute for the Consolidated Equity at the date of acquisition.
If CARDO Co purchases the net assets of SYANO Co by issuing 5,000 shares of their P20 par value shares with a fair value of P40 per share, incurs a mortgage loan for P90,000, pays P150,000 cash and paying direct, indirect and stock issue costs of P75,000, P50,000 and P40,000 respective. Compute for the goodwill
Palm Corporation and Staple Company have announced terms of an exchange agreement under which Palm will issue 8,500 shares of its $15 par value common stock to acquire all of Staple Company’s assets. Palm shares currently are trading at $59, and Staple $10 par value shares are trading at $23 each. Historical cost and fair value balance sheet data on January 1, 20X2, are as follows: Palm Corporation Staple Company Balance Sheet Item Book Value Fair Value Book Value Fair Value Assets Cash & Receivables $ 151,000 $ 151,000 $ 46,000 $ 46,000 Land 110,000 190,000 57,000 83,000 Buildings & Equipment (net) 313,000 411,000 176,000 230,000 Total Assets $ 574,000 $ 752,000 $ 279,000 $ 359,000 Equities Common Stock $ 200,000 $ 81,000 Additional Paid-In Capital 18,000 9,900 Retained Earnings…

Recommended textbooks for you

SWFT Corp Partner Estates Trusts

Accounting

ISBN:

9780357161548

Author:

Raabe

Publisher:

Cengage

Financial Reporting, Financial Statement Analysis…

Finance

ISBN:

9781285190907

Author:

James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:

Cengage Learning

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

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

Publisher:

Cengage Learning

SWFT Corp Partner Estates Trusts

Accounting

ISBN:

9780357161548

Author:

Raabe

Publisher:

Cengage

Financial Reporting, Financial Statement Analysis…

Finance

ISBN:

9781285190907

Author:

James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:

Cengage Learning

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

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

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS