fair value of the net assets held by XYZ Corp at the date of combination
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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 |
|
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?
a. 270,000
b. 227,000
c. 497,000
d. 115,000
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- 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?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.…
- Parent Corporation acquired all the identifiable net assets of Sub Company by issuing ordinary shares on January 2. 2022. Partial balance sheet for the companies prior to the business combination and immediately following the combination is provided: Parent 65,000 Consolidated 60,000 Sub 25,000 20,000 45,000 140,000 10,000 240,000 Cash Accounts receivable 72,000 94,000 Inventory Buildings Goodwill 33,000 400,000 88,000 650,000 Total assets 570,000 75.000 350,000 Accounts payable Bonds payable Common stock, P2 par Share premium Retained earnings Total liabilities and equities 50,000 25,000 100,000 25,000 20,000 70,000 240,000 250,000 100,000 160,000 65,000 105,000 570,000 100,000 The only consideration transferred is the issuance of shares with fair value of P8. Parent also paid business combination expenses, share issue costs are twice the amount of indirect costs. Parent and Sub are SMES.On January 1, 2024, Coronado Company purchased 8,208 shares of Whispering Company's common stock for $124,000. Immediately after the stock acquisition, the statements of financial position of Coronado and Whispering appeared as follows: Assets Cash Accounts receivable Inventory Investment in Whispering Company Plant assets Accumulated depreciation-plant assets Total (b) Liabilities and Owners' Equity Current liabilities Prepare a consolidated balance sheet workpaper as of January 1, 2024. Mortgage notes payable Common stock, $10 par value Other contributed capital Retained earnings Total Cash Accounts Receivable Inventory Investment in Whispering Total Difference between Implied and Book Value Plant Assets Accumulated Depreciation Current Liabilities Mortgage Note Payable Common Stock: Coronado Company Whispering Company Other Contributed Capital Coronado Company Whispering Company Total Retained Earnings: Coronado Company Whispering Company Noncontrolling Interest 38,250 Coronado…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 $…
- 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 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 115,000 227,000…Benjamin Inc. and Victor Inc. agreed to combine as of January 1, 2023. The book value and fair value of Victor's accounts on that date (prior to creating the combination) follow, along with the book value of Benjamin's accounts: Current assets Building and equipment (net) Liabilities Common Stock Additional paid-in capital Retained earnings, 1/1/2023 O $200,000. Benjamin Book Value $50,000. O $70,000. O $90,000. Victor Book Value $420,000 $170,000 $230,000 790,000 410.000 480,000 620,000 380,000 380,000 400,000 90,000 Victor Fair Value 70,000 30,000 120,000 80,000 Assume that Benjamin issued 10,000 shares of common stock with a $5 par value and a $40 fair value to obtain all of Victor's outstanding stock. In addition, Benjamin paid legal costs of $8,000 in connection with the acquisition and $4,000 in stock issue costs, which is not yet reflected in the information above. On its acquisition-date consolidated balance sheet, what amount should Beaver report as goodwill?On January 1, 2019. P Corporation purchased 75% of the common stock of S Company. Separate balance sheet data for the companies at the combination date are given below: P Corporation Company P9,600 57,600 52,800 31,200 280,000 (96,000) Cash P82,400 10,400 15,200 12,800 120,000 (24,000) Accounts receivable Inventory Land Plant assets Accumulated depreciation Investment in Ucky Total assets Accounts payable Capital stock Retained earnings Total equities 156,800 P492,000 P216,800 P82,400 320,000 89,600 P492.000 P216,800 P56,800 120,000 40,000 At the date of combination the book values of S Company's net assets was equal to the fair value of the net assets except for S Company's inventory which has a fair value of P24,000. Indicate in each of the questions what the consolidated balance would be for the requested account, assuming the amount assigned to NCI is the proportionate share in the fair value of net assets. 1. What amount of inventory will be reported а. Р52,800 b. Р68,000 c.…
- Asset acquisition vs. stock acquisition (fair value is different from book value) The following financial statement information is for an investor company and an investee company on January 1, 2013. On January 1, 2013, the investor company's common stock had a traded market value of $17.5 per share, and the investee company's common stock had a traded market value of $15.5 per share. Book Values Fair Values Investor Investee Investor Investee Receivables & inventories $50,000 $25,000 $45,000 $22,500 100.000 50,000 150,000 75.000 112,500 50,000 125,000 65,000 75.000 40,000 $262,500 $125,000 $395,000 $202,500 $75,000 $40,000 $90,000 $47,500 10.000 5,000 140,000 75,000 37.500 5,000 $262,500 $125,000 $187,500 $85,000 $305,000 $155,000 Land Property & equipment Trademarks & patents Total assets Liabilities Common stock ($1 par) Additional paid-in capital Retained earnings Total liabilities & equity Net assets Required (Parts a. and b. are independent of each other.)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: how much is the Goodwill arising from this Business Combination? how much is the Shareholder’s Equity section of the Consolidated Balance Sheet?On January 1, 2021, Flint Corporation acquired a 100% equity interest in Cole Corporation. The individual Balance Sheets of each company as well as the consolidated Balance Sheet totals on January 1, 2021 are shown in the table below: