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- Sunland Homes Company is considering the acquisition of Cheyenne, Inc. early in 2025. To assess the amount, it might be willing to pay, Sunland Homes makes the following computations and assumptions. A. Cheyenne, Inc. has identifiable assets with a total fair value of $15,008,000 and liabilities of $8,813,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 30% higher than book value, and land with a fair value 75% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Cheyenne, Inc. B. Cheyenne, Inc.'s pretax incomes for the years 2022 through 2024 were $1, 202, 200, $ 1,503,000, and $951, 800, respectively. Sunland Homes believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments to the following items included in pretax earnings: Depreciation on buildings (each year)…Reck Company is considering the acquisition of Clock Inc. To assess the amount it might be willing to pay, Reck makes the following computations and assumptions.A. Clock, Inc. has identifiable assets with a total fair value of OMR 9,000,000 and liabilities of OMR 6,500,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 30% higher than book value, and land with a fair value 50% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Clock Inc.B. Clock Inc.'s pretax incomes for the years 2018 through 2020 were OMR 580,000, OMR 420,000, and OMR 350,000, respectively. Reck believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments for the following items included in pretax earnings:Depreciation on Buildings (each year) 380,000Depreciation on Equipment…Carla Vista Company is considering the acquisition of Kingbird, Inc. To assess the amount it might be willing to pay, Carla Vista makes the following computations and assumptions. A. B. C. Kingbird, Inc. has identifiable assets with a total fair value of $6,016,000 and liabilities of $3,719,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 25% higher than book value, and land with a fair value 50% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Kingbird, Inc. Kingbird, Inc.'s pretax incomes for the years 2020 through 2022 were $472,100, $573,300, and $372,700, respectively. Carla Vista believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments for the following items included in pretax earnings: Depreciation on Buildings (each year) Depreciation on Equipment…
- P Company is considering the acquisition of S Inc. To assess the amount it might be willing to pay, P makes the following computations and assumptions: A. S Inc. has identifiable assets with a total fair value of $8,000,000 and liabilities of $5,300,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 30% higher than book value, and land with a fair value 60% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Barkley, Inc. B. S Inc.'s pretax incomes for the years 2010 through 2012 were $700,000, $900,000, and $550,000, respectively. P believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments for the following items included in pretax earnings: Depreciation on Buildings (each year) 580,000 Depreciation on Equipment (each year) 30,000 Extraordinary Loss (year 2012)…Moon Company is contemplating the acquisition of Yount, Inc., on January 1, 2015. If Moon acquires Yount, it will pay $730,000 in cash to Yount and acquisition costs of $20,000. The January 1, 2015, balance sheet of Yount, Inc., is anticipated to be as attached:Fair values agree with book values except for the inventory and the depreciable fixed assets, which have fair values of $70,000 and $400,000, respectively. Your projections of the combined operations for 2015 are as follows: Combined sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000 Combined cost of goods sold, including Yount’s beginning inventory, at book value, which will be sold in 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000 Other expenses not including depreciation of Yount assets . . . . . . . . . . . . . . . . . . . . . . . . 25,000Depreciation on Yount fixed assets is…Tweeden Corporation is contemplating the acquisition of the net assets of Sylvester Corporation in anticipation of expandingits operations. The balance sheet of Sylvester Corporation on December 31, 2015, is as attached:n appraiser for Tweeden determined the fair values of Sylvester’s assets and liabilities to be as shown as in attachment 2The agreed-upon purchase price is $580,000 in cash. Acquisition costs paid in cash total $20,000.Using the above information, do value analysis and prepare the entry on the books of Tweeden Corporation to acquire the net assets of Sylvester Corporation on December 31, 2015.
- Mumtaj, Inc. is acquiring equipment as follows: Krafton will pay cash of $500,000 and sign a non-interest bearing note with a face amount of $1,661,000.The fair value (i.e. market value) of equipment on 3/31/2021 is $1,500,000The equipment will be placed in operations on the acquisition date with an expected life of 10 years. Krafton Company uses straight-line depreciation and expects no salvage value.The face amount is payable 3 years from the date of acquisition (3/31/2021). Carter Company uses a calendar year for its fiscal year. Carter Company can currently obtain loans from its banks at an interest rate of 10%Prepare an amortization table for the note payable and all necessary journal entries for the year ended 12/31/2021 including, as appropriate, adjusting entries.Extreme UV Inc. has accumulated development costs that meet the criteria for capitalization at December 31,2022, amounting to P39,000. It is estimated that the useful life of this intangible asset will be six years; accordingly, amortization of P6,500 per year is anticipated. Extreme UV, Inc. uses the allowed alternative method of accounting for its long-lived tangible and intangible assets. At December 31, 2024, it obtains market information regarding the then- current fair value of this intangible asset, which suggests a current fair value of these development costs is P40,000; the estimated useful life, however, has not changed. I the “netting” method is used, the amount of other comprehensive income recognized from the revaluation at December 31, 2024 is ____________Extreme UV Inc. has accumulated development costs that meet the criteria for capitalization at December 31,2022, amounting to P39,000. It is estimated that the useful life of this intangible asset will be six years; accordingly, amortization of P6,500 per year is anticipated. Extreme UV, Inc. uses the allowed alternative method of accounting for its long-lived tangible and intangible assets. At December 31, 2024, it obtains market information regarding the then- current fair value of this intangible asset, which suggests a current fair value of these development costs is P40,000; the estimated useful life, however, has not changed. If the “gross up” revaluation method is used, how much is the gross fair value of the intangible asset as of December 31, 2024?
- On January 01, 2020, Sisig Corp. acquired an investment property, and the initial cost of the investment property was P5,000,000. On the acquisition date, the company chooses the cost model to account for its investment. As of December 31, 2020, it has a carrying value of P4,900,000 and a fair value of P5,100,000.On December 31, 2021, the company decided to transfer the investment property to owner-occupied property that is also under the cost model. On the date of transfer, the fair value of the property is P5,000,000 while its carrying value was P4,800,000. What amount of gain or loss on transfer should the company recognize on December 31, 2021? a. P300,000 loss b. P200,000 loss c. No gain or loss d. P100,000 lossDuring 2020, the Tidel Company completed the following transactions related to its property, plant, and equipment accounts: a. On March 18, Tidel paid $480,000 for land, buildings, and equipment in a lump-sum purchase. An appraisal that cost Tidel $10,000 revealed fair market values of $200,000 for the land, $150,000 for the buildings, and $150,000 for the equipment. b. On August 11, Tidel issued 20,000 shares of its $10 par value common stock in exchange for some equipment. The equipment's fair market value is estimated at $360,000 by an outside appraisal. On the date of the exchange, the stock was being actively traded at $17 per share on a major stock exchange. Required: Prepare the necessary journal entry to properly record each transaction.GALING Co. acquired a building on March 1, 2021. The costs related to the acquisition are as follows: Purchase price: P7,000,000; Options: P300,000 (of which P100,000 is incurred on a building which is not acquired) Repairs of P500,000 which consists of renovation, remodeling of office space and new partitions before occupying the building. How much should be recorded as cost of the building? a. P7,800,000 b.P7,700,000 c.P7,500,000 d. P7,300,000