fair value of the net assets held
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13
ABC Corp. acquired all the assets and liabilities of XYZ Corporation by issuing shares of its common stock. On January 1, 2020, partial balance sheet data for the companies prior to the business combination and immediately following the combination is provided.
|
|
ABC Corp. |
XYZ Corp. |
Combination |
|
Cash |
65,000 |
25,000 |
90,000 |
|
Accounts receivable |
72,000 |
20,000 |
94,000 |
|
Inventory |
33,000 |
45,000 |
88,000 |
|
PPE (net) |
400,000 |
150,000 |
650,000 |
|
|
|
|
? |
|
Total Assets |
570,000 |
240,000 |
? |
|
|
|
|
|
|
Accounts payable |
50,000 |
25,000 |
75,000 |
|
Bonds payable |
250,000 |
100,000 |
350,000 |
|
Common stock, P2 par |
100,000 |
25,000 |
160,000 |
|
Share Premium |
65,000 |
20,000 |
245,000 |
|
|
105,000 |
70,000 |
? |
|
Total Liab and Equity |
570,000 |
240,000 |
? |
What is the fair value of the net assets held by XYZ Corp at the date of combination?
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- Juniper Company is authorized to issue 5,000,000 shares of $2 par value common stock. In conjunction with its incorporation process and the IPO, the company has the following transaction: Mar. 1, issued 4,000 shares of stock in exchange for equipment worth $250,000. Journalize the transaction.Vishnu Company is authorized to issue 500,000 shares of $2 par value common stock. In conjunction with its incorporation process and the IPO, the company has the following transaction: Apr. 10, issued 1,000 shares of stock for legal services valued at $15,000. Journalize the transaction.ABC Corp. acquired all the assets and liabilities of XYZ Corporation by issuing shares of its common stock. On January 1, 2020, partial balance sheet data for the companies prior to the business combination and immediately following the combination is provided. ABC Corp. XYZ Corp. Combination Cash 65,000 25,000 90,000 Accounts receivable 72,000 20,000 94,000 Inventory 33,000 45,000 88,000 PPE (net) 400,000 150,000 650,000 Goodwill ? Total Assets 570,000 240,000 ? Accounts payable 50,000 25,000 75,000 Bonds payable 250,000 100,000 350,000 Common stock, P2 par 100,000 25,000 160,000 Share Premium 65,000 20,000 245,000 Retained earnings 105,000 70,000 ? Total Liab and Equity 570,000 240,000 ? What is the fair value of the net assets held by XYZ Corp at the date of combination? Group of answer choices 115,000 270,000 497,000…
- ABC Corp. acquired all the assets and liabilities of XYZ Corporation by issuing shares of its common stock. On January 1, 2020, partial balance sheet data for the companies prior to the business combination and immediately following the combination is provided. ABC Corp. XYZ Corp. Combination Cash 65,000 25,000 90,000 Accounts receivable 72,000 20,000 94,000 Inventory 33,000 45,000 88,000 PPE (net) 400,000 150,000 650,000 Goodwill ? Total Assets 570,000 240,000 ? Accounts payable 50,000 25,000 75,000 Bonds payable 250,000 100,000 350,000 Common stock, P2 par 100,000 25,000 160,000 Share Premium 65,000 20,000 245,000 Retained earnings 105,000 70,000 ? Total Liab and Equity 570,000 240,000 ? What amount of goodwill be reported by the combined entity immediately following the combination? Group of answer choices a. 13,000 b.…ABC Corp. acquired all the assets and liabilities of XYZ Corporation by issuing shares of its common stock. On January 1, 2020, partial balance sheet data for the companies prior to the business combination and immediately following the combination is provided. ABC Corp. XYZ Corp. Combination Cash 65,000 25,000 90,000 Accounts receivable 72,000 20,000 94,000 Inventory 33,000 45,000 88,000 PPE (net) 400,000 150,000 650,000 Goodwill ? Total Assets 570,000 240,000 ? Accounts payable 50,000 25,000 75,000 Bonds payable 250,000 100,000 350,000 Common stock, P2 par 100,000 25,000 160,000 Share Premium 65,000 20,000 245,000 Retained earnings 105,000 70,000 ? Total Liab and Equity 570,000 240,000 ? What is the fair value of the net assets held by XYZ Corp at the date of combination? a. 270,000 b. 227,000 c. 497,000 d. 115,000ABC Corp. acquired all the assets and liabilities of XYZ Corporation by issuing shares of its common stock. On January 1, 2020, partial balance sheet data for the companies prior to the business combination and immediately following the combination is provided. ABC Corp. XYZ Corp. Combination Cash 65,000 25,000 90,000 Accounts receivable 72,000 20,000 94,000 Inventory 33,000 45,000 88,000 PPE (net) 400,000 150,000 650,000 Goodwill ? Total Assets 570,000 240,000 ? Accounts payable 50,000 25,000 75,000 Bonds payable 250,000 100,000 350,000 Common stock, P2 par 100,000 25,000 160,000 Share Premium 65,000 20,000 245,000 Retained earnings 105,000 70,000 ? Total Liab and Equity 570,000 240,000 ? What amount of goodwill be reported by the combined entity immediately following the combination?
- ABC Corp. acquired all the assets and liabilities of XYZ Corporation by issuing shares of its common stock. On January 1, 2020, partial balance sheet data for the companies prior to the business combination and immediately following the combination is provided. ABC Corp. XYZ Corp. Combination Cash 65,000 25,000 90,000 Accounts receivable 72,000 20,000 94,000 Inventory 33,000 45,000 88,000 PPE (net) 400,000 150,000 650,000 Goodwill ? Total Assets 570,000 240,000 ? Accounts payable 50,000 25,000 75,000 Bonds payable 250,000 100,000 350,000 Common stock, P2 par 100,000 25,000 160,000 Share Premium 65,000 20,000 245,000 Retained earnings 105,000 70,000 ? Total Liab and Equity 570,000 240,000 ? What amount of goodwill will be reported by the combined entity immediately following the combination? a. 413,000 b. 173,000 c. 125,000 d.…6. ABC and XYZ Inc had the following balance sheets on December 31, 2021: (see image below) On January 1, 2022 ABC purchased all of XYZ Inc’s Common Shares for P40,000 in cash. On that date, XYZ’s Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, determine the value of the current assets of the combined entity: 7. Using the same information in #6 how much is the Goodwill arising from this Business Combination? 8. Using the same information in #6 how much is the Shareholder’s Equity section of the Consolidated Balance Sheet?6. ABC and XYZ Inc had the following balance sheets on December 31, 2021: (see image below) On January 1, 2022 ABC purchased all of XYZ Inc’s Common Shares for P40,000 in cash. On that date, XYZ’s Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, a) determine the value of the current assets of the combined entity: b) how much is the Goodwill arising from this Business Combination? c) how much is the Shareholder’s Equity section of the Consolidated Balance Sheet?
- 11. Parent and Sub Inc had the following balance sheets on December 31, 2021 (see image below). On January 1, 2022 Parent purchased all of Sub Inc’s Common Shares for P40,000 in cash. On that date, Sub’s Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, the Current Assets of the combined entity should be valued at how much?11. Parent and Sub Inc had the following balance sheets on December 31, 2021 (see image below). On January 1, 2022 Parent purchased all of Sub Inc’s Common Shares for P40,000 in cash. On that date, Sub’s Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, the Current Assets of the combined entity should be valued at how much? 12. Using the same information in #11, Assuming that Consolidated Financial Statements were prepared on that date, the Goodwill of the combined entity should be valued at how much?Following are separate financial statements of Michael Company and Aaron Company as of December 31, 2024 (credit balances indicated by parentheses). Michael acquired all of Aaron’s outstanding voting stock on January 1, 2020, by issuing 20,000 shares of its own $1 par common stock. On the acquisition date, Michael Company’s stock actively traded at $32.50 per share. Accounts Michael Company 12/31/24 Aaron Company 12/31/24 Revenues $ (689,500) $ (418,500) Cost of goods sold 309,750 164,250 Amortization expense 119,700 101,500 Dividend income (5,000) 0 Net income $ (265,050) $ (152,750) Retained earnings, 1/1/24 $ (1,002,000) $ (730,000) Net income (above) (265,050) (152,750) Dividends declared 90,000 5,000 Retained earnings, 12/31/24 $ (1,177,050) $ (877,750) Cash $ 192,000 $ 19,100 Receivables 447,000 231,000 Inventory 642,000 365,000 Investment in Aaron Company 650,000 0 Copyrights 545,000 387,000 Royalty agreements 1,001,000 416,000 Total assets $…
