Prepare the necessary adjusting entries for the following independent transactions: 1. Alps Co. acquired land, building, and equipment from Bankrupt Inc. for P2,800,000. Bankrupt's assets on acquisition date had the following values: Book Value Fair Value Land P 800,000 Building 1,000,000 1,400,000 Equipment 1,200,000 1,200,000 Alps decided to take a conservative position by recording the lower of the two values for each PPE item acquired. The following entry was made: Land 600,000 Building 1,000,000 Equipment 1,200,000 Cash 2.800.000 P 600,000

Prepare the necessary adjusting entries for the following independent transactions: 1. Alps Co. acquired land, building, and equipment from Bankrupt Inc. for P2,800,000. Bankrupt's assets on acquisition date had the following values: Book Value Fair Value Land P 800,000 Building 1,000,000 1,400,000 Equipment 1,200,000 1,200,000 Alps decided to take a conservative position by recording the lower of the two values for each PPE item acquired. The following entry was made: Land 600,000 Building 1,000,000 Equipment 1,200,000 Cash 2.800.000 P 600,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11PB: On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received...

See similar textbooks

Similar questions

On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received $12,000,000 in net assets. In 2016, the market value of the goodwill obtained from Branta Corp. was valued at $4,000,000, but in 2017 it dropped to $2,000,000. Prepare the journal entry for the creation of goodwill and the entry to record any impairments to it in subsequent years.
Hamilton Companys balance sheet on January 1, 2019, was as follows: Korbel Company is considering purchasing Hamilton (a privately held company) and discovers the following about Hamilton: a. No allowance for doubtful accounts has been established. A 10,000 allowance is considered appropriate. b. Marketable securities are valued at cost. The current market value is 60,000. c. The LIFO inventory method is used. The FIFO inventory of 140,000 would be used if the company is acquired. d. Land, included in property, plant, and equipment, which is recorded at its cost of 50,000, is worth 120,000. The remaining property, plant, and equipment is worth 10% more than its depreciated cost. e. The company has an unrecorded trademark that is worth 70,000. f. The companys bonds are currently trading for 130,000. g. The pension liability is understated by 40,000. Required: 1. Compute the amount of goodwill if Korbel agrees to pay 500,000 cash for Hamilton. 2. Next Level What are the reasons that the book value of Hamiltons net identifiable assets differ from their market value? 3. Prepare the journal entry to record the acquisition on the books of Korbel assuming Hamilton is liquidated. 4. If Korbel agrees to pay only 400,000 cash, how much goodwill exists? 5. If Korbel pays only 400,000 cash, prepare the journal entry to record the acquisition on its books, assuming Hamilton is liquidated.
Prepare the necessary adjusting entries for the following independent transactions:1. Alps Co. acquired land, building, and equipment from Bankrupt Inc. for P2,800,000. Bankrupt’s assets on acquisition date had the following values: Book Value Fair ValueLand P 800,000 P 600,000Building 1,000,000 1,400,000Equipment 1,200,000 1,200,000 Alps decided to take a conservative position by recording the lower of the two values for each PPE item acquired. The following entry was made:Land 600,000Building 1,000,000Equipment 1,200,000Cash 2,800,000
Arizona Corp. acquired the business Data Systems for $320,000 cash and assumed all liabilities at the date of purchase. Data's books showed tangible assets of $260,000, liabilities of $40,000, and stockholder's equity of $220,000. An appraiser assessed the fair market value of the tangible assets at $250,000 at the date of acquisition. Compute the amount of good will acquired Record the qcquisition in a financial statements model When will teh goodwill be written off under the impairment rules Record the acquisition in general journal format
Entity R measures its non-current assets using the revaluation model. At 30 June 20x2, Entity R purchased a property for R100 000. The property was revalued at 30 June 20x6 to R250 000. The latest valuation report, dated 30 June 20x8, values the building at R95 000. Entity R has adjusted the building shown in non-current assets at 30 June 20x8.Calculate the debit entry in Entity R’s financial statements for the year ended 30 June 20x8
[The following information applies to the questions displayed below.] Dog Co. acquired and placed in service the following assets during the year: Date Cost Asset Placed in Service Basis Computer equipment 3/9 $ 15,800 Furniture 5/23 23,200 Commercial building 10/19 347,000 Assuming Dog Co. does not elect §179 expensing and elects not to use bonus depreciation, answer the following questions: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) b. What is Dog Co.'s year 3 cost recovery for each asset if Dog Co. sells all of these assets on 4/16 of year 3?
Lauren Ltd bought some land on 1 January 20X4 for GHS 500,000. On 31 December 20X5, this land was revalued to GHS 700,000. On 31 December 20X7, the fair value less costs to sell off this land was estimated at GHS 400,000 and its value in use at GHS 450,000. According to IAS 36 Impairment of Assets, what amount will be included in the income statement of Lauren Ltd for the year ended 31 December 20X7 in respect of the impairment loss on this land? A. GHS Nil B. GHS 50,000 C. GHS 200,000 D. GHS 250,000
Lauren Ltd bought some land on 1 January 20X4 for GHS 500,000. On 31 December 20X5, this land was revalued to GHS 700,000. On 31 December 20X7, the fair value less costs to sell off this land was estimated at GHS 400,000 and its value in use at GHS 450,000. According to IAS 36 Impairment of Assets, what amount will be included in the income statement of Lauren Ltd for the year ended 31 December 20X7 in respect of the impairment loss on this land?
On January 1, 20Y3, The Simmons Group, Inc., purchased the assets of NWS Insurance Co. for $40,610,000, a price reflecting an $4,061,000 goodwill premium. On December 31, 20Y9, The Simmons Group determined that the goodwill from the NWS acquisition was impaired and had a value of only $1,522,875. Determine the book value of the goodwill on December 31, 20Y9, prior to making the impairment adjustment.
When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the following statement of financial position: Current Assets (net realizable value, P50,000) P 80,000 Land and Building (fair value, P240,000) 200,000 Goodwill (fair value, 0) 40,000 Total Assets P320,000 Accounts Payable P160,000 Mortgage Payable (secured by land & building) 200,000 Ordinary share 100,000 Accumulated profits (140,000) Total Liabilities and Equity P320,000 What percentage of their claims are…
arizona corp. acquired the business data systems for $320,000 cash and assumed all liabilites at the data of purchase. data's books showed tangible assets of $340,000, liabilities of $19,000, and stockholders' equity of $321,000. an appraiser assessed the fair market value of the tangible assets at $310,000 at the data of acquisition. a. compute the amount of goodwill acquired. b. record the acquisition in a financial statements model. Arizona corps. financial condition just prior to the aquistion is shown in the following statements model. cash paid- liabilites assumed- total- FMV of assets- goodwill-
(b) Discuss the relevant accounting treatments. At the date of acquisition, assets of Sahara Berhad include brand name ofRM300,000 in its Statement of Financial Position. However, directors of KofLet Berhad believed the brand name to have no recoverable value at the date of acquisition. Therefore, Sahara Berhad wrote it off shortly after itsacquisition.