ADVANCED ACCOUNTING W/ACCESS >CUSTOM<
14th Edition
ISBN: 9781307594683
Author: Hoyle
Publisher: MCG/CREATE
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On June 30, 2018, Streeter Company reported the following account balances:On June 30, 2018, Princeton Company paid $310,800 cash for all assets and liabilities of Streeter, which will cease to exist as a separate entity. In connection with the acquisition, Princeton paid $15,100 in legal fees. Princeton also agreed to pay $55,600 to the former owners of Streeter contingent on meeting certain revenue goals during 2019. Princeton estimated the present value of its probability adjusted expected payment for the contingency at $17,900.In determining its offer, Princeton noted the following pertaining to Streeter:• It holds a building with a fair value $43,100 more than its book value.• It has developed a customer list appraised at $25,200, although it is not recorded in its financial records.• It has research and development activity in process with an appraised fair value of $36,400. However, the project has not yet reached technological feasibility and the assets used in the activity…
On January 1, 2021, Squirtle Company sold a piece of equipment to Charmander Company with a cost of
P3,500,000 and accumulated depreciation of P500,000 in exchange for an annual 6% interest-bearing note,
P3,600,000. Charmander company is required to make ten equal semi-annual payments of principal plus
interest.
Questions:
1. How much is the total amount that will reflect in the statement of comprehensive income for the year
2021 that is related to the above transaction?
2. What is the interest income for the year 2023?
3. How much is the total proceeds of Squirtle for the year 2024?
On June 1, 2021, Cline Company paid P800,000 cash for the assets and liabilities of Renn Corp. The carrying values for Renn's assets and liabilities on June 1, 2021 follow: Cash - P150,000; Accounts receivable - P180,000; Capitalized software costs - P320,000; Goodwill - P100,000; and Liabilities - P130,000. On June 1, 2021, Renn's accounts receivable had a fair value of P140,000. Additionally, Renn's in-process and development costs was estimated to have a fair value of P200,000. Renn Corp. had a contingent liability of P20,000, the fair value of which was P15,000. Renn agreed to indemnify Cline for P10,000 for the contingent liability. All other items were stated at their fair values. On Cline's June 1 balance sheet. How much is reported for goodwill?
A. P90,000
B. P85,000
C. P130,000
D. P125,000
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