ADVANCED ACCOUNTING
ADVANCED ACCOUNTING
13th Edition
ISBN: 9781260773033
Author: Hoyle
Publisher: MCG
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Chapter 2, Problem 30P

1.

To determine

Prepare Company A’s entry to record its acquisition of Company D in its accounting records assuming the cash exchange amounts is $145,000.

2.

To determine

Prepare Company A’s entry to record its acquisition of Company D in its accounting records assuming the cash exchange amounts is $110,000.

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Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2018, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts:     BookValues     FairValues   Current assets $ 20,250     $ 20,250   Building   110,250       65,150   Land   17,250       28,550   Trademark   0       34,600   Goodwill   37,500       ?   Liabilities   (50,250 )     (50,250 ) Common stock   (100,000 )         Retained earnings   (35,000 )           1&2. Prepare Allerton’s entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts: $132,000 and $86,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2021, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts:     BookValues   FairValues   Current assets $ 41,500   $ 41,500   Building   108,000     67,000   Land   17,000     35,200   Trademark   0     31,800   Goodwill   19,000     ?   Liabilities   (50,500 )   (50,500 ) Common stock   (100,000 )       Retained earnings   (35,000 )           1&2. Prepare Allerton’s entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts: $166,000 and $96,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Record the acquisition of Delex assuming the cash exchange of $166,000. Record the acquisition of Delex assuming the cash exchange of $96,000.
Grand Champion Inc. purchased America’s Sweethearts Corporation on January 1, 2019. At the time, America’s Sweethearts had the following assets and liabilities (stated at fair value): Cash $63,000 Accounts receivable 137,000 Inventory 185,000 Property, plant, and equipment 300,000 Patent 65,000 Accounts payable 220,000 Notes payable 325,000   Grand Champion paid $900,000 for America’s Sweethearts. Assume that America’s Sweethearts is a reporting unit of Grand Champion. At the end of 2020, America’s Sweethearts has a fair value of $730,000 and a book value of $870,000, which includes any goodwill recorded. Of this fair value, $340,000 is attributable to identifiable assets net of (or identifiable net assets) liabilities. Required:   Calculate the impairment loss of goodwill (if any) and record the appropriate journal entry.

Chapter 2 Solutions

ADVANCED ACCOUNTING

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