FUNDAMENTALS OF ADVANCED ACCOUNTING >I
6th Edition
ISBN: 9781307007350
Author: Hoyle
Publisher: MCG/CREATE
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Question
Chapter 2, Problem 5Q
To determine
Explain why might the determination of a fair value for the consideration transferred be difficult under the given circumstances.
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Jones Company obtains all of the common stock of Hudson, Inc., by issuing 50,000 shares of its own stock. Under these circumstances, why might the determination of a fair value for the consideration transferred be difficult?
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On December 31, Phoenix Corporation acquired all of Sedona Corporation’s voting stock in exchange for $560,000 cash. At the acquisition date, the fair values of Sedona’s assets and liabilities equaled their carrying values, except that the fair value of the inventory was $20,000 lower than the carrying value, the fair value of the equipment was $50,000 higher than the carrying value, and the fair value of the long-term debt was $4,000 lower than the carrying value. The separate condensed balance sheets of the two companies immediately after the acquisition (on 12/31) are as follows:
Phoenix Sedona
Cash $ 90,000 $ 60,000
Accounts receivable 130,000 25,000
Inventory 160,000 70,000
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Chapter 2 Solutions
FUNDAMENTALS OF ADVANCED ACCOUNTING >I
Ch. 2 - Prob. 1QCh. 2 - Prob. 2QCh. 2 - What does the term consolidated financial...Ch. 2 - Within the consolidation process, what is the...Ch. 2 - Prob. 5QCh. 2 - Prob. 6QCh. 2 - Prob. 7QCh. 2 - Prob. 8QCh. 2 - Prob. 9QCh. 2 - Prob. 10Q
Ch. 2 - Prob. 11QCh. 2 - Which of the following does not represent a...Ch. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4PCh. 2 - Prob. 5PCh. 2 - An acquired entity has a long-term operating lease...Ch. 2 - When does gain recognition accompany a business...Ch. 2 - Prob. 8PCh. 2 - Prob. 9PCh. 2 - Prob. 10PCh. 2 - On June 1, Cline Co. paid 800,000 cash for all of...Ch. 2 - On May 1, Donovan Company reported the following...Ch. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - Prob. 15PCh. 2 - Prob. 16PCh. 2 - On its acquisition-date consolidated balance...Ch. 2 - On its acquisition-date consolidated balance...Ch. 2 - Prob. 19PCh. 2 - The following book and fair values were available...Ch. 2 - Prob. 21PCh. 2 - Prob. 22PCh. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 27PCh. 2 - Prob. 28PCh. 2 - Prob. 29PCh. 2 - SafeData Corporation has the following account...Ch. 2 - Prob. 31PCh. 2 - Prob. 32PCh. 2 - Prob. 33APCh. 2 - On February 1, Piscina Corporation completed a...Ch. 2 - Prob. 1DYSCh. 2 - Prob. 2DYSCh. 2 - Prob. 3DYS
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- Peter Corp acquired the net identifiable assets of Simon Corp by issuing its own 5,000 ordinary shares with par and fair value of P100 and P125 per share, respectively and payment of cash of P2,000,000. The assets and liabilities of Simon have fair values of P3,500,000 and P1,200,000, respectively. Peter Corp incurred the following other related cost of acquiring Simon Corp. such as cost of registering shares P120,000 including listing fees of P20,000; due diligence cost of P5,000; legal fees P10,000; broker’s fee P3,000; Audit fee for SEC registration of share issue P25,000; printing cost of share certificates P2,000; pre acquisition audit fee P8,000; and general and administrative cost of maintaining an internal acquisition P30,000. The total goodwill to be recorded by Peter Corp?arrow_forwardPeter Corp acquired the net identifiable assets of Simon Corp by issuing its own 5,000 ordinary shares with par and fair value of P100 and P125 per share, respectively and payment of cash of P2,000,000. The assets and liabilities of Simon have fair values of P3,500,000 and P1,200,000, respectively. Peter Corp incurred the following other related cost of acquiring Simon Corp. such as cost of registering shares P120,000 including listing fees of P20,000; due diligence cost of P5,000; legal fees P10,000; broker’s fee P3,000; Audit fee for SEC registration of share issue P25,000; printing cost of share certificates P2,000; pre acquisition audit fee P8,000; and general and administrative cost of maintaining an internal acquisition P30,000. The total expenditures that should be debited to share premium?arrow_forwardPeter Corp acquired the net identifiable assets of Simon Corp by issuing its own 5,000 ordinary shares with par and fair value of P100 and P125 per share, respectively and payment of cash of P2,000,000. The assets and liabilities of Simon have fair values of P3,500,000 and P1,200,000, respectively. Peter Corp incurred the following other related cost of acquiring Simon Corp. such as cost of registering shares P120,000 including listing fees of P20,000; due diligence cost of P5,000; legal fees P10,000; broker’s fee P3,000; Audit fee for SEC registration of share issue P25,000; printing cost of share certificates P2,000; pre acquisition audit fee P8,000; and general and administrative cost of maintaining an internal acquisition P30,000. Total expenditures that should be charged to profit or loss?arrow_forward
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