Dorel Company is being purchased and has the following balance sheet as of the purchase date: Current assets $200,000 Liabilities $ 90,000 Fixed assets 180,000 Equity 290,000 Total $380,000 Total $380,00 Amanda Co. paid for 45% of Dorel's net assets is $500,000. The fixed assets have a fair value of $220,000, and the liabilities have a fair value of $110,000. The amount of goodwill or gain to be recorded in the purchase is:
Q: The management team of Gwapo Co. is deciding to acquire Beauty Co., an entity that sells a product…
A: The question is related Business Acquisition. We will first Calculate the Capitalized Value of…
Q: Dorel Company is being purchased and has the following balance sheet as of the purchase date: $…
A: Net assets of Dorel = Current assets + Fair value of fixed assets - fair value of current…
Q: Lee Company is contemplating the purchase of the net assets of Min Company for P800,000 cash. To…
A: Business combination refers to the activity when one business takes control of another business.…
Q: During the past several years the annual net income of Avery Company has averaged $540,000.At the…
A: Goodwill: Goodwill is the good reputation developed by a company over years. This is recorded as an…
Q: On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration…
A: A consolidated balance sheet is a single balance sheet that provide the financial position of the…
Q: On January 1, 2021, ABC acquired all the assets and assumed all the liabilities of DEF Co. for…
A: The acquisition is when a company takes over another company.
Q: The following are preliminary financial statements for Choco Co. and Cake Co. for the year ending…
A: Business Combination: It is the transaction between two entities in which one acquires control over…
Q: The Alhambra Company had these accounts at the time it was acquired by Kingdom Co.: P 108,000…
A: The goodwill, in the process of an acquisition, is determined by subtracting the fair value of net…
Q: Frankie Corporation purchased 100% of Blake Company for P600,000. At that date, Blake Company had…
A: Given in the question: Particulars Book Value Market Value Cash and Receivables…
Q: RGW Industries purchased the net assets of SP Company for P1,300,000. A schedule of the net assets…
A: In the case of the acquisition of companies, the value of the cost of control (goodwill or capital…
Q: a. Is the acquisition of Arya Company constitute a business? Justify your answer in no more than…
A: Introduction of acquisition A business constitutes an undertaking of activity for monetary…
Q: Grant Company purchased the net assets of Harding Company on January 1, 2015, and made the following…
A: 1. The journal entry is given below: Journal entry Date Account title Debit ($) Credit ($) i…
Q: Partners Ltd operates a car manufacturing plant. It has decided to purchase a 100 per cent interest…
A: Calculation of goodwill Calculation of goodwill in the Acqusition first to taken up the total…
Q: On January 1, 2020, Hannah Company purchased 20% of Montana Company fro P3,000,000. This investment…
A: Date Account titles and Explanation Debit Credit January 1, 2020 Investment in Montana…
Q: Acker Inc. bought 40% of Howell Co. on January 1, 2020 for $576,000. The equity method of accounting…
A: Unrealized profit, December 31, 2020 = [($20,000 / $75,000) x $15,000] x 40% = $1,600
Q: On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration…
A: Solution Non controlling interest is a scenario in which a shareholder holds less than half of the…
Q: On August 1, ABC Corporation acquired 80 percent of XYZ Corporation for P560,000. XYZ Corporation…
A: The goodwill is recorded as intangible assets on the balance sheet of the firm.
Q: Quail Company purchases 80% of the common stock of Commo Company for $800,000. At the time of the…
A: 1. a.
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: What amount should Carsen record as investment in associate for the year ended December 31, 2019?
A: Investment in associates refers to the investments made in an entity where the investor does not…
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: Fowler Manufacturing Company purchased Blye Company on December 31, 2018. The balance sheet of Blye…
A: Step 1 In business combination, when one entity acquires another entity, and the purchase…
Q: On January 1, 2022, P Company acquired 80% of S Company for P2,000,000. The fair value of…
A: 1) Sales of P 5500000 Less: merchandise ahipped to S at cost plus 25% (800000 x 125%) (1000000)…
Q: On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration…
A: Solution Working note - 1- NCI beginning 750000 NCI income 534750 NCI share dividend…
Q: On January 1, 2020, ABS Corporation purchased 75% of the common stock of LOPEZ Company. Separate…
A: Total Assets Particulars Amount Cash (84,000+721000) 805,000 Trade Receivable (504,000+91,000)…
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: Matthews Co. acquired all of the common stock of Jackson Co. on January 1, 2020. As of that date,…
A: Particulars. Amount Life Annual Amortization Purchase Price of Jackson Co. $588,000 Book value.…
Q: Acker Inc. bought 40% of Howell Co. on January 1, 2020 for $576,000. The equity method of accounting…
A: Equity Method:-It is a method of accounting, the investor company shows the revenue earned from…
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: P company paid $3,600,000 in cash, to acquire 90%of S company on January 1, 2014. The total…
A:
Q: On July 1, 2020, Hedwig Emporiums purchased Nargle Enterprises by paying $300,000 cash and issuing…
A: Journal entry: This is the first step to record accounts. It is written in the same order in which…
Q: .Platek Enterprises purchases 100 percent of Smith Company for P600,000. At that date Smith Company…
A: Net assets =Common stock + Retained earnings = 15000 + 255000 = P270,000
Q: In 2018, Evan Company spent $3,900,000 to acquire 100% of the outstanding stock of Haven Company,…
A: In case of acquisition of 100% subsidiary, all assets and liabilities of the subsidiary needs to be…
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: Alimama Inc. purchased a EV truck company, Yesla Inc. at $3,500,000 on December 31, 2020. The…
A: An impairment loss is a reduction in the value of an asset mainly because of decrease in its fair…
Q: Platek Enterprises purchases 100 percent of Smith Company for P600,000. At that date Smith Company…
A: Net assets =Common stock + Retained earnings = 15000 + 255000 = P270,000
Q: Eastern Management Ltd acquired all the assets and liabilities of King Ltd on 30 June 2017. The…
A: In case one company overtake the assets and liabilities of another company , then accounting for…
Q: Libra Company is purchasing 100% of the outstanding stock of Genall Company for $700,000. Genall…
A: Part a) value analysis Particular Company implied fair value Parent price (100%) Company…
Q: Cozzi Company is being purchased and has the following balance sheet as of the purchase date:…
A: Goodwill In an Acquisition: Goodwill is an intangible asset linked with the acquisition of a…
Q: Venus Company purchases 8,000 shares of Sundown Company for $64 per share. Just prior to the…
A: Value analysis refers to the process of improving the value of product by reducing the cost function…
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: On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration…
A: Solution Consolidated net income is the sum of net income of the parent company excluding any income…
Q: Cozzi Company is being purchased and has the following balance sheet as of the purchase date:…
A: Goodwill is an intangible asset that accounts for the excess purchase price of another company.…
Q: From the data given, compute the goodwill or gain from bargain purchase for the different items. If…
A: Calculation of Net Consideration paid: Calculation of Net Identifiable Asset:
Q: South Company acquires a 90% interest in West Company for $585,000 cash on January 1, 20X0, when…
A: West total net income: $50,000 20X0 Sales Dr. $50,000 Retained Earnings Cr. $50,000…
Q: On September 1, 2017, Winans Corporation acquired Aumont Enterprises for a cash payment of $700,000,…
A: Solution: Introduction: Goodwill is an intangible asset that will arise when one company purchases…
Q: Questions: a. Is the acquisition of Arya Company constitute a business? Justify your answer b. Is…
A: When a company acquires sets of assets and activities from another business, it is to be determined…
Q: On January 1, 2020, Procise Corporation acquired 100 percent of the outstanding voting stock of…
A: Consolidation: Reporting entity holding considerable voting rights or controlling interest in the…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Cozzi Company is being purchased and has the following balance sheet as of the purchase date: $ 90,000 290,000 $380,000 Current assets $200,000 Liabilities Fixed assets 180,000 Equity Total $380 000 Total The price paid for Cozzi's net assets is $500,000. The fixed assets have a fair value of $220,000, and the liabilities have a fair value of $110,000. The amount of goodwill to be recorded in the purchase is O $150,000 SO O $170,000 O $190,000HAPPY Corp. assets have a carrying amount of P100,000 before year end adjustments. The PFRSs require these assets to be measured at fair value at each reporting date. Location is a characteristic of the assets. Information at year end is as follows: Active Market #i Quoted Price P340,000, Transport Cost-P25,000, Cost to Sell -P35,000 and Active Market #2 Quoted Price - P387,000, Transport Cost -29,000. Cost to Sell- 18,000. A} If Active Market #1 is the principal market for Entity A's biological assets, how much is the fair value? B)If neither Active Market#1 nor Active Market #2 is the principal market, how much is the fair value? A. P315,000; P358,000 B. P280,000; P358,000 C. P315,000; P340,000 D. P280,000;P340,000HAPPY Corp. assets have a carrying amount of P100,000 before year end adjustments. The PFRSs require these assets to be measured at fair value at each reporting date. Location is a characteristic of the assets. Information at year end is as follows: Active Market #i Quoted Price P340,000, Transport Cost-P25,000, Cost to Sell -P35,000 and Active Market #2 Quoted Price - P387,000, Transport Cost -29,000. Cost to Sell- 18,000. A} If Active Market #1 is the principal market for Entity A's biological assets, how much is the fair value? B)If neither Active Market#1 nor Active Market #2 is the principal market, how much is the fair value?
- On January 1, 2022, P Company acquired 80% of S Company forP2,000,000. The fair value of identifiable net assets is P1,800,000. NCI ismeasured at fair value. During 2022, P Company ships merchandise to SCompany costing P1,000, 000 at 20% above cost. Additional data are asfollows:P Company S CompanySales 5,500,000 2,500,000Cost of Sales 3,200,000 1,600,000Operating Expense 650,000 300,000The ending inventories of S Company includes merchandise from PCompany amounting to P60,000. Impairment of goodwill is P20,000.How much is the consolidated gross profit?On January 1, 2022, P Company acquired 80% of S Company for P2,000,000. The fair value of identifiable net assets is P1,800,000. NCI is measured at fair value. During 2022, P Company ships merchandise to S Company costing P800, 000 at 25% above cost. Additional data are as follows: P Company S Company Sales 5,500,000 2,500,000 Cost of Sales 3,200,000 1,600,000 Operating Expense 650,000 300,000 The ending inventories of S Company includes merchandise from P Company amounting to P50,000. Impairment of goodwill is P20,000. Consolidated cost of sales is reported at The net income attributable to parent isOn January 1, 2022, P Company acquired 80% of S Company for P2,000,000. The fair value of identifiable net assets is P1,800,000. NCI is measured at fair value. During 2022, P Company ships merchandise to S Company costing P800, 000 at 25% above cost. Additional data are as follows: P Company S Company Sales 5,500,000 2,500,000 Cost of Sales 3,200,000 1,600,000 Operating Expense 650,000 300,000 The ending inventories of S Company includes merchandise from P Company amounting to P50,000. Impairment of goodwill is P20,000. (INPUT YOUR ANSWERS IN FIGURES. DO NOT PUT ANY COMMA, PESO SIGN, DECIMALS, AND EXTRA SPACES) Consolidated cost of sales is reported at The net income attributable to parent is
- Myla Company has current assets of P75,000 and total assets ofP375,000. The company's sales are P900,000. Myla’s fixed asset turnoveris?Hoover Company acquired Burgess Company for $1,200,000 cash. The fair value of Burgess's assets was $1,040,000, and the company had liabilities of $60,000. Which of the following journal entries would be used to record the purchase of Burgess Company? Multiple Choice Burgess assets Burgess liabilities Goodwill Cash Burgess assets Cash 1,040,000 60,000 100,000 1,200,000 1,200,000 1,200,000S Company had the following balances at the time it was acquired by P Company:Cash P36,000Accounts receivable 457,000Inventories 120,000Property, plant and equipment 696,400Goodwill 200,000Accounts payable 350,800P Company paid P1.4M for the net assets of S Company. It was determined that fair market values of inventories and property, plant and equipment were P133,000 and P900,000, respectively.An assumed contingent liability with a fair value amounting to P20,000 and such amount is considered a reliable measurement. Also, a P50,000 future losses or reorganization/ restructuring costs are expected to be incurred as a result of the business combination.In the books of P Company, how will be the amount of Goodwill arising from business combination?
- 11. The following information pertains to Nonagon Company's biological assets at December 31, 2021: Price of assets in an active market , P 5,000,000 Estimated broker's and dealer's commissions, P 50,000 Transport and other costs expected to be incurred to bring the assets to the market, P 40,000 Selling price in a binding sale agreement, P 5,100,000 At what amount should the biological assets be presented on the statement of financial position?On March 1, 2020, Dorsey Corporation purchased Johnson Company. The book and fair value of Johnson's balance sheet accounts is shown below. Record the purchase on Dorsey's books under each of the following independent assumptions. a. Dorsey paid Johnson $1,000,000 b. Dorsey paid Johnson $700,000 Book Value Fair Value Cash 50,000 50,000 Accounts Receivable 90,000 75,000 Inventory 125,000 175,000 Equipment 70,000 100,000 Buildings 75,000 95,000 Land 600,000 700,000 Accounts Payable 200,000 200,000 Note Payable Retained Earnings 100,000 100,000 315,000 315,000 Common Stock 15,000 250,000 Paid in Capital For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). 380,000 380,000· On January 1, 2020, P Company acquired 80% of S Company for P2,000,000. The fair value of identifiable net assets is P1,800,000. NCI is measured at fair value. During 2020, P Company ships merchandise to S Company costing P800, 000 at 25% above cost. Additional data are as follows: Р Company 5,500,000 3,200,000 650,000 S Company 2,500,000 1,600,000 300,000 Sales Cost of Sales Operating Expense The ending inventories of S Company includes merchandise from P Company amounting to P50,000. Impairment of goodwill is P20,000. Consolidated cost of sales is reported at: a. P4,800,000 b. Р3,800,000 c. P4,010,000 d. P3,810,000