Loose Leaf For Advanced Financial Accounting
12th Edition
ISBN: 9781260165111
Author: Christensen, Theodore E., COTTRELL, David
Publisher: McGraw-Hill Education
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Question
Chapter 1, Problem 1.31P
To determine
Concept Introduction: Business Combination is a process where two entities merge to take the benefit of synergies for a common objective.
To Explain: Journal entries with which P Company recorded its acquisition of S Company’s net assets.
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Phoenix Corporation acquired the business Sun Systems for $315,000 cash and assumed all liabilities at the date of purchase. Sun’s books showed tangible assets of $330,000, liabilities of $18,000, and stockholders’ equity of $312,000. An appraiser assessed the fair market value of the tangible assets at $305,000 and liabilities at $18,000 at the date of acquisition. Phoenix Corporation’s financial condition just prior to the acquisition is shown in the following statements model.
Required
1 Compute the amount of goodwill acquired.
2 Record the acquisition in general journal format.
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Chapter 1 Solutions
Loose Leaf For Advanced Financial Accounting
Ch. 1 - What types of circumstances would encourage...Ch. 1 - How would the decision to dispose of a segment of...Ch. 1 - Prob. 1.3QCh. 1 - Prob. 1.4QCh. 1 - Prob. 1.5QCh. 1 - Prob. 1.6QCh. 1 - Prob. 1.7QCh. 1 - Prob. 1.8QCh. 1 - Prob. 1.9QCh. 1 - Prob. 1.10Q
Ch. 1 - Prob. 1.11QCh. 1 - Prob. 1.12QCh. 1 - Prob. 1.13QCh. 1 - Prob. 1.14QCh. 1 - Within the measurement period following a business...Ch. 1 - Prob. 1.16QCh. 1 - Prob. 1.1CCh. 1 - Prob. 1.2CCh. 1 - Prob. 1.3CCh. 1 - Prob. 1.4CCh. 1 - Risks Associated with Acquisitions Not all...Ch. 1 - Prob. 1.6CCh. 1 - Prob. 1.1.1ECh. 1 - Prob. 1.1.2ECh. 1 - Prob. 1.1.3ECh. 1 - Multiple-Choice Questions on Complex Organizations...Ch. 1 - Prob. 1.1.5ECh. 1 - Prob. 1.2.1ECh. 1 - Prob. 1.2.2ECh. 1 - Multiple-Choice Questions on Recording Business...Ch. 1 - Prob. 1.2.4ECh. 1 - Multiple-Choice Questions on Recording Business...Ch. 1 - Multiple-Choice Questions on Reported Balances...Ch. 1 - Multiple-Choice Questions on Reported Balances...Ch. 1 - Prob. 1.3.3ECh. 1 - Prob. 1.3.4ECh. 1 - Prob. 1.4.1ECh. 1 - Prob. 1.4.2ECh. 1 - Prob. 1.4.3ECh. 1 - Multiple-Choice Questions Involving Account...Ch. 1 - Prob. 1.4.5ECh. 1 - Prob. 1.5ECh. 1 - Prob. 1.6ECh. 1 - Prob. 1.7ECh. 1 - Prob. 1.8ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.10ECh. 1 - Balances Reported Following Combination Palm...Ch. 1 - Goodwill Recognition Spur Corporation reported the...Ch. 1 - Acquisition Using Debentures Planter Corporation...Ch. 1 - Bargain Purchase Using the data resented in E1-13,...Ch. 1 - Prob. 1.15ECh. 1 - Prob. 1.16ECh. 1 - Prob. 1.17ECh. 1 - Prob. 1.18ECh. 1 - Prob. 1.19ECh. 1 - Prob. 1.20ECh. 1 - Prob. 1.21ECh. 1 - Prob. 1.22ECh. 1 - Prob. 1.23ECh. 1 - Prob. 1.24PCh. 1 - Prob. 1.25PCh. 1 - Prob. 1.26PCh. 1 - Acquisition in Multiple Steps Peal Corporation...Ch. 1 - Prob. 1.28PCh. 1 - Prob. 1.29PCh. 1 - Prob. 1.30PCh. 1 - Prob. 1.31PCh. 1 - Computation of Account Balances Saspro Division is...Ch. 1 - Prob. 1.33PCh. 1 - Prob. 1.34PCh. 1 - Prob. 1.35PCh. 1 - Business Combination Following are the balance...Ch. 1 - Prob. 1.37PCh. 1 - Prob. 1.38PCh. 1 - Prob. 1.39PCh. 1 - Prob. 1.40P
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- ABC Corporation acquired 70 percent of XYZ Corporation on August 1 for P420,000. On that date, XYZ Corporation had the following book values and market values. What is the amount of purchase differential recognized on the acquisition date consolidated balance sheet with respect to plant assets. *In good accounting form, please. Thank you!arrow_forwardQuail Company purchases 80% of the common stock of Commo Company for $800,000. At the time of the purchase, Commo has the following balance sheet: (see attachment)The fair values of assets are as follows: Cash equivalents . . . . . . . . . . . . . . . . . . $120,000 Inventory . . . . . . . . . . . . . . . . . . . . . . . . 250,000 Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000 Building . . . . . . . . . . . . . . . . . . . . . . . . . 650,000 Equipment . . . . . . . . . . . . . . . . . . . . . . . 200,000 1. Prepare the value analysis schedule and the determination and distribution of excess schedule under three alternatives for valuing the NCI: a. The value of the NCI is implied by the price paid by the parent for the controlling interest. b. The market value of the shares held by the NCI is $45 per share. c. The international accounting option, which does not allow goodwill to be recorded as part of the NCI, is used. 2. Prepare the elimination entries that would…arrow_forwardSubsea Co will sell machinery (which was carried in its books at cost of $120,000 less accumulated depreciation $80,000) to Paron Co for $100,000. The machinery had a remaining useful life of 3 years on the date of the intercompany sale. What is the consolidated journal entry as at Dec 20x0 for: (a) If Paron Co acquires all the shares of Subsea Co (b) if Paron Co acquires 70% of the shares of Subsea Coarrow_forward
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