Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Allison Corporation acquired 90 percent of Bretton on January 1, 2016. Of Bretton’s total acquisition-date fair value, $60,000 was allocated to undervalued equipment (with a 10-year remaining life) and $80,000 was attributed to franchises (to be written off over a 20-year period).Since the takeover, Bretton has transferred inventory to its parent as follows:On January 1, 2017, Allison sold Bretton a building for $50,000 that had originally cost $70,000 but had only a $30,000 book value at the date of transfer. The building is estimated to have a five-year remaining life (straight-line depreciation is used with no salvage value).Selected figures from the December 31, 2018, trial balances of these two companies are as follows:Determine consolidated totals for each of these account balances.
On January 1, Prine, Inc., acquired 100 percent of Lydia Company’s common stock for a fair value of $120,000,000 in cash and stock. Lydia’s assets and liabilities equaled their fair values except for its equipment, which was undervalued by $500,000 and had a 10-year remaining life.
Prine specializes in media distribution and viewed its acquisition of Lydia as a strategic move into content ownership and creation. Prine expected both cost and revenue synergies from controlling Lydia’s artistic content (a large library of classic movies) and its sports programming specialty video operation. Accordingly, Prine allocated Lydia’s assets and liabilities (including $50,000,000 of goodwill) to a newly formed operating segment appropriately designated as a reporting unit.
The fair values of the reporting unit’s identifiable assets and liabilities through the first year of operations were as follows.
However, Lydia’s assets have taken longer than anticipated to produce the expected synergies…
VMware, Inc. is a subsidiary of Dell Technologies Inc.. providing customers with IT resource management. In fiscal 2020, VMware acquired Avi Networks, Inc., a provider of multi-
cloud application delivery services, for $335 million. This price reflected goodwill of $228 million and identifiable intangible assets of $94 million. Assume that VMware paid the
acquisition price in cash, and also incurred $10 million in acquisition-related legal and advisory services, paid in cash.
Required
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Note: Provide all answers in millions,
million
b. Prepare the journal entry to record this business combination.
Debit
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