SAR Co paid P110,000 for the net assets of Ken Corp. At the time of the acquisition,the attached photo are informatiom available related to Ken Corp's balance sheet. What is the amount of gain or loss on disposal of a business should Ken Corp. recognize? Same problem with the previous SAR Co. * Book Value P50, 000 Fair Value P 50,000 100, 000 50,000 30,000 Current Assets Building Equipment Liabilities 80,000 40,000 30,000 Gain of 30,000 Gain of 60,000 Loss of 30,000 Loss of 60,000
Q: Preston Company acquired the assets (except for cash) and assumed the liabilities of Saville…
A: Solution: Introduction: Acquisition of a business means obtaining ownership in shares from…
Q: On January 1. 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $180,000 in…
A: A consolidated financial statement is inclusive of all the subsidiary companies where the owner has…
Q: On January 1, 20x1, DIAPHANOUS Co. acquired all of the identifiable assets and assumed all of the…
A: Acquisition related costs does not form part of purchase consideration, and are expensed during the…
Q: On January 1, 20x1, AAA Co. acquired all of the identifiable assets and assumed all of the…
A: The transaction costs concerning the business combination are charged to the profit and loss account…
Q: The Alhambra Company had these accounts at the time it was acquired by Kingdom Co.: P 108,000…
A: The goodwill, in the process of an acquisition, is determined by subtracting the fair value of net…
Q: High, a parent company, acquired Low, an unincorporated entity, for $2,800,000. A fair value…
A: Property, plant and equipment RM3,000M Identifiable intangible asset RM500M Inventory RM300M…
Q: Leni Co. acquired all of BBM Co's assets and liabilities on October 2, 2021. BBM reported assets…
A:
Q: arizona corp. acquired the business data systems for $320,000 cash and assumed all liabilites at the…
A: Goodwill: Goodwill is the good reputation developed by a company over years. This is recorded as an…
Q: Woolco, Inc., purchased all the outstanding stock of Paint, Inc., for $980,000. Woolco also paid…
A: 1. Prepare the journal entry to record the purchase of the Paint Inc., and the payment made for the…
Q: MNC Corporation purchased all of the outstanding stock of Caldwell Inc., paying $2,700,000 cash.…
A: When the net assets acquired are less than the amount paid for it then the difference is treated as…
Q: XYZ Co had the following accounts at the time it was acquired by ABC Inc (see image below). ABC paid…
A: Cost of acquisition is the cost at which one business firm or any individual acquires another…
Q: Present in good accounting form
A: Partnership means where two or more person comes together to do some common business activity and…
Q: The Alhambra Company had these accounts at the time it was acquired by Kingdom Co.: P 108,000…
A: Goodwill= Goodwill is the reputation of the entity. When the cost of consideration paid in exchange…
Q: Kiwi Co. purchased another entity for P5,000,000 cash. The carrying amount and fair value were…
A: Goodwill is an intangible asset of a company which exists due to the company’s customer base, brand…
Q: ABC Corp. had the following data ascertained before liquidation: Total book valueof the assets were…
A: Estimated loss on Assets Here to calculate the estimated loss while comparing with the book value…
Q: XYZ Co had the following accounts at the time it was acquired by ABC Inc (see image below). ABC paid…
A: Cost of acquisition means total expenses incurred by entity to purchase new entity or assets. Here…
Q: ABC Company acquired all of XYZ Corporation's assets and liabilities on June 30, 20X1. XYZ reported…
A: An asset is an expense that will be helpful in future accounting periods. If an expenditure does not…
Q: On January 1, 2021, ABC Company sold machinery to MNO, its wholly-owned subsidiary for P450,000. The…
A: Depreciation is the decrease in the book value of the tangible asset which gives benefit for more…
Q: Kiwi Co. purchased another entity for P5,000,000 cash. The carrying amount and fair value were…
A: Consolidation is the merger of two or more entities where one large company acquire share capital of…
Q: When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the…
A: Introduction: A person or organization that loaned money without needing specific assets as…
Q: P Company wishes to acquire S Co. for cash in an asset acquisition, and appraisals reveal that the…
A: Goodwill on acquisition is arising on paying the amount over the net identifiable assets of the…
Q: When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the…
A: Formula: percentage of their claims are the unsecured creditors = Total value of Free Assets /…
Q: ABC Corp. had the following data ascertained before liquidation: Total book valueof the assets were…
A: Net free assets is the assets free for distribution to unsecured creditors after distribution to the…
Q: The Alhambra Company had these accounts at the time it was acquired by Kingdom Co.: Cash P 108,000…
A: Business Combination: When two firms merge or one firm acquires the business of other firm, it is…
Q: On July 1, 2022 the ABC Company acquired the net assets of XYZ Company for P8,000,000. The recorded…
A: Goodwill means the reputation of the company due to any factor like location , product , price ,…
Q: On January 1, 2021, ABC Company sold machinery to MNO, its wholly-owned subsidiary for P450,000. The…
A: Depreciation represents the reduction in the value of the long-term asset of the company over a…
Q: ABC Company acquired all of XYZ Corporation's assets and liabilities on June 30, 20X1. XYZ reported…
A: Net Assets: Net assets are what a company owns wholly less what anyone owes. In other terms, net…
Q: XYZ Co had the following accounts at the time it was acquired by ABC Inc (see image below). ABC paid…
A: Cost of acquisition means total expenses incurred by entity to purchase other entity or assets.
Q: XYZ Co had the following accounts at the time it was acquired by ABC Inc (see image below). ABC paid…
A: Fair value of net identifiable assets = P133,000 + P900,000 - P10,000 = P1,023,000
Q: XYZ Co had the following accounts at the time it was acquired by ABC Inc (see image below). ABC paid…
A: Cost of acquisition is a concept that includes all the costs at the time of purchase. It is net…
Q: ABC Corporation purchased a business for P20,000,000 cash. The assets and liabilities of the…
A: Goodwill means the reputation of the company due to any factor like location , product , price ,…
Q: Putin Company acquired the assets and assumed the liabilities of Joni Company on January 1, 2018,…
A: Journal entries are recording of the transaction in the accounting journal in a chronological order.…
Q: Pro-tech Software acquired all of the outstanding stock of Reliable Software for $14 million. The…
A: The goodwill is the amount paid for the good image of the acquired business. The amount of goodwill…
Q: On January 1, 2021, ABC Company sold machinery to MNO, its wholly-owned subsidiary for P450,000. The…
A: Depreciation expense is associated with the fall in the value of an asset periodically because of…
Q: On January 17, Lina's Co. Paid $1,600,000 for all the issued and outstanding common stock of Ralph…
A: Goodwill means the reputation of the company due to any factor like location , product , price ,…
Q: Book Value Cash and Receivables P30,000 Inventory Plant Assets (net) Current Liabilities Market…
A: In preparation of consolidated financial statements, parents corporations eliminate/discard the…
Q: Prince Corporation acquired 1O0 percent of Sword Company on January 1, 20X7, for $178,000. The trial…
A: Investment in Another Company: It is possible for a firm to invest in another company via the use of…
Q: January
A: book value of machine sold = P230,000 Cost of machinery = P560,000 no. of useful life = 5 year…
Q: When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the…
A: Liquidation means where the company decide to close out the operations , sell all the assets and…
Q: When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the…
A: In case of liquidation, all the amount realised from the sale of assets would be first utilised for…
Q: ABC Company acquired all of XYZ Corporation's assets and liabilities on June 30, 20X1. XYZ reported…
A: Book value and fair value The book value is based on the old old purchase price, from which yearly…
Q: XYZ Co had the following accounts at the time it was acquired by ABC Inc (see image below). ABC paid…
A: Cost of acquisition is the total cost incurred (including transaction cost) by a company to overtake…
Q: P Company wishes to acquire S Co. for cash in an asset acquisition, and appraisals reveal that the…
A: The acquisition method is a method where the acquirer company takeover the assets and liabilities of…
Q: ABC Company acquired all of XYZ Corporation’s assets and liabilities on June 30, 20X1. XYZ reported…
A: Net Assets: Net Assets is the differential amount of total assets and total obligations of a…
Q: When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the…
A: Liquidation of a company is the process where the company realizes all of its assets and pays of its…
Q: The owners of Rainier Company are planning to sell the business to new interests. The cumulative net…
A: Answer is option B0 14,000,000
Q: Several years ago, Sammy Inc. acquired a 709% interest in Lavender Co. The book values of Lavender's…
A: Cost of goods sold: - Costs of goods sold is the value of total goods sold during a particular…
Q: WebHelper Inc. acquired 100% of the outstanding stock of Silicon Chips Corporation (SCC) for $45…
A: Goodwill: Goodwill is an intangible asset. It is defined as the excess of cost of an acquired…
Q: Lei Company acquired a financial asset at its market value of P4,800,000. Broker fees of P300,000…
A: 1. The fair value of financial asset would be recognized for $4,800,000.
Q: On January 1, 20x1, Rooster Co. acquired 75% interest in Cockerel Co. for P600,000. At this time,…
A: The portion of the period's consolidated profit or loss that is attributable to the parent, net of…
Step by step
Solved in 3 steps
- l touch ? 1:28 PM 49% Expert Q&A Done P Company wishes to acquire SCo. for cash in an asset acquisition, and appraisals reveal that the inventory has a fair value $195,000, and the equipment has a current value of $625,000. The book value and fair value of liabilities are the same. The following balance sheets were reported on January 1, 2011, for P Company and S Company: S Co. $ 30,000 P Co. Cash $ 150,000 Inventory Equipment (net) 450,000 150,000 1,320,000 570,000 Total $1,920,000 $750,000 $ 450,000 Total liabilities Common stock, $20 par value Other contributed capital Retained earnings $150,000 600,000 300,000 375,000 105,000 495,000 $1,920,000 195,000 Total $750,000 Determine the purchase price above which P Co. would record goodwill.* O $705,000 O $710,000 O S700,000 $695,000 O None of the options is correct Determine the purchase price at which P Co. would record a $30.000 gain." O $685,000 O $670,000 $690,000 O s665.000 O None of the options is correct9:49 Done 11b36d000cf94aa18..._J On January 1, 20X8, Alaska Corporation acquired Mercantile Corporation's net assets by paying $160,000 cash. Balance sheet data for the two companies and fair value information for Mercantile Corporation immediately before the business combination are given below: Alaska Mercantile Book Value Book Value Fair Value Cash $200,000 $30,000 $30,000 Accounts Receivable 40,000 22,000 22,000 Inventory 120,000 25,000 36,000 Patents 50,000 20,000 40,000 Buildings and Equipment 330,000 250,000 150,000 Less: Accumulated Depreciation -140,000 -150,000 Total Assets $600,000 $197,000 $278,000 Accounts Payable Notes Payable S85,000 $55,000 $55,000 100,000 80,000 80,000 Common Stock: $5 par value $2 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equities 120,000 20,000 140,000 25,000 155,000 $600,000 17,000 S197,000 Required Prepare the journal entry to record the acquisition of Mercantile Corporation, showing ?goodwill calculations if any…3l 69% 1 4:18 pm SAR Co paid P110,000 for the net assets of Ken Corp. At the time of the acquisition,the attached photo are informatiom available related to Ken Corp's balance sheet. What is the amount recorded by SAR for the building? * Book Value P50,000 80,000 40,000 Fair Value P 50,000 100, 000 Current Assets Building Equipment 50,000 30,000 Liabilities 30, 000 20,000 80,000 100,000 110,000 SAR Co paid P110,000 for the net assets of Ken Corp. At the time of 9 the acquisition,the attached photo are informatiom available related to
- ces The following book and fair values were available for Westmont Company as of March 1. Book Value Fair Value $ 439,750 401,250 776,250 1,019,250 2,346,750 873,750 (114,500) Inventory Land Buildings Customer relationships. Accounts payable Connon stock Additional paid-in capital Retained earnings, 1/1 Revenues Expenses View transaction list Arturo pays cash of $4,403,500 to acquire Westmont. No stock is issued and Arturo pays $50,600 for legal fees to complete the transaction. 2,025,000 Prepare Arturo's journal entries to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No Journal entry required" in the first account field.) 1 0 (114,500) (2,000,000) 2 (500,000) (445,000) (506,500) 325,000 Journal entry worksheet Note: Enter debits before credits, Transaction Record the acquisition of Westmont Company. General Journal Debit CreditA e O Y l 78% i 13:54 Vo) LTE abc SAVE Text Pen Brush In 2010,Chesley Inc. acquired Corrigan Ltd. in a hostile takeover. However, the expect synergies never materialized. In 2013, Chesley decided to write-off $45 million of Goodwill on the financial statements to recognize that the Goodwill had become impaired. Which of the following items would be decreased by the impairment of Goodwill? (check all that apply) Goodwill Net Income Accumulated Other Comprehensive Income Cash from Operating Activities Cash from Investing Activities В I U !!! !!!II. solution. Mardou Company Martin Company P50,000,00 Compary Assets Current Assets P50,000 P25,0000 P25,0000 P12,500,000 Imvenbory Curent Labilites Equity P18,0000 PS5,00000 PI5,0000 P50000 PA5,000 PIO,0000 PT 200,000 Sales PIO,0000 Costs P8.9000 Cumpery Marin Compary Merou Compan Curent Rabio Quik Ratb Paifabilty Retum on TotalAssets Retum on Ruty
- At the time of acquisition X & Y Co., stock issue expected cost expenses OMR 48,000. Finally, acquisition cost was OMR 64,000. How much will record in the income statement. Select one: a. OMR 48,000 b. OMR 64,000 c. OMR 16,000 d. OMR 112,0001 1 16900 2,400.00 10.00 Brewer Company acquired all of the outstanding ordinary shares of an acquiree paying P12,000,000 cash. The carrying amount and fair value of the assets and liabilities of the acquire were: Carrying amount Fair value Accounts receivable. Inventory 1,800,000 2,000,000 Property, plant and equipment 2,700,000 5,000,000 Accounts payable 10,000,000 13,000,000 Bonds payable 3,000,000 3,000,000 4,500,000 3,500,000 What amount should be recognized as gain on purchase? bargain a: 2,500,000 b. 8,000,000 C. 1,500,000 d. 0 964 OI A 2017 2018 2019 2020 2021 Goodwill with nor What am Compan a. 2,535 b. 2,100 c. 2,315 d. 2,305ation in ear: During uilding Pl,160,000 800,000 000,000 been 1,220,000 1,200,000 1,180,000 d. 1,160,000 b. units. C. goods to be arged Grey Company acquired a machine with a cash price of abor. P2,000,000. 400,000 1,200,000 800,000 Down payment n 000 shares of Grey Company at fair value Prior to use, installation cost of P50,000 was incurred. The achine has a residual value of P100,000. What is the initial measurement of the new machine? ring 8. 2,000,000 b. 2,400,000 C. 2,050,000 d. 2,450,000 ry Problem 23-14 (IAA) ost. Çorner Company puchased a van with a list price of P3,000,000. The dealer granted a 15% reduction in list price nd and an additional 10% cash discount on the net price if payment is made in 30 days. at Irrecoverable taxes amounted to P40,000 and the entity paid an extra P30,000 to have a special horn installed. ad What amount should be recorded as initial cost of the van? 2 2,550,000 0. 2,335,500 at 2,365,000 d. 2,325,000 payment plan but a have P120,000 was and…
- l touch ? 1:27 PM 49% Expert Q&A Done P Company purchased 80% of the outstanding common stock of S Company on January 2, 2011, for $350,000. And any difference between the value implied by the purchase price of the investment and the book value of net assets acquired relates to subsidiary land. The book values of S Company's other assets and liabilities are equal to their fair values. Balance sheets for P Company and S Company immediately after the stock acquisition were as follows: P Company $ 166,000 S Company $ 80,000 Current assets Investment in S Company Plant and equipment (net) 350,000 -0- 560,000 224,000 40,000 $1,116,000 Land 120,000 $424,000 Total Current liabilities $ 90,000 $ 28,000 Long-term notes payable Common stock Other contributed capita Retained earnings -0 46,000 480,000 150,000 244,000 64,000 302,000 $1,116,000 136.000 Total $424,000 The consolidated balance sheet for P andS Companies on the date of acquisition will include:* O Current Assets of $240,000 O Current…Question 1 Bedsam Ltd has investment in a company, Raddo Ltd. The separate financial statements of the two entities for 2017 are as below: Statement of Financial Position as at 31 December 2017 Bedsam Ltd Raddo Ltd GHC GHC ASSETS Non-current assets Property, plant and equipment Investments in shares 610,000 41,000 32,000 651,000 32,000 Current assets Inventories Trade and other receivables Cash and cash equivalents 188,000 130,000 6,000 16,000 10,000 1,500 324,000 975,000 27.500 59,500 Total Assets EQUITY AND LIABILITIES Equity Ordinary shares [issued at GHC 1.00] Retained Earnings 356,000 417,830 25,000 9,900 773.830 34,900 Current liabilitiesJO 100 4ll OO D 40I 4:19 794a95a5-963f-4...0c-9f2dc5edd2da - Saved Edina Company acqui the assets (except cash) and assumed the liabilities of Burns Company on January 1, 2013, paying $2,600,000 cash. Immediately prior to the acquisition, Burns Company's balance sheet was as follows: BOOK VALUE $ 240,000 290,000 960,000 1,020,000 $2,510,000 FAIR VALUE $ 220,000 320,000 1,508,000 1,392,000 $3,440,000 Accounts receivable (net) Inventory Land Buildings (net). Total Accounts payable Note payable Common stock, $5 par Other contributed capital Retained earnings $ 270,000 600,000 420,000 640,000 580,000 $2,510,000 $ 270,000 600,000 Total Edina Company agreed to pay Burns Company's former stockholders $200,000 cash in 2014 if post- combination earnings of the combined company reached $1,000,000 during 2013. Required: A. Prepare the journal entry necessary for Edina Company to record the acquisition on January 1, 2013. It is expected that the earnings target is likely to be met. B. Prepare the…