Company X purchased Company Y for $4,000,000. The net assets of the company purchased were valued at $3,800,000. What asset will be on Company X's balance sheet for $200,000? Goodwill Amortization Not enough info Equipment
Q: The Oscar Corporation acquired land, buildings, and equipment from a bankrupt company at a lump-sum…
A: Total cost to be assigned = P20,000,000 + P240,000 Total cost to be assigned = P20,240,000
Q: Mee Company acquired land and building for P 5,500,000 cash at the beginning of the current year.…
A: Fixed assets are the long-term tangible asset which gives benefit for long period of time. It…
Q: Harding Corporation acquired real estate that contained land, building and equipment. The property…
A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…
Q: Robinson Company purchased Franklin Company at a price of $2,500,000. The fair market value of…
A: Given information is: Robinson Company purchased Franklin Company at a price of $2,500,000. The…
Q: Chili's, acquired Thallicious for $32,170,000. The fair value of all Thailicioustangible and…
A: Goodwill is the excess of consideration paid over the fair values of net assets of the acquiring…
Q: Princess has acquired several other companies. Assume that Princess purchased Krandell for…
A: Answer 1:
Q: Spuds Co. bought a manufacturing facility for $1,200,000. The facility included land valued at…
A: The cost assigned to the equipment = $1,200,000$700,000+$400,000+$200,000×$200,000 =…
Q: Davis Company exchanged an old machine with a cost of $120,000, total accumulated depreciation of…
A: The exchange refers to the situation where old assets are exchanged with new assets. The new…
Q: Assume El Dorado Inc. buys a competitor’s assets for $900,000. Of the $900,000 acquisition price,…
A: As per section 197 of intangible assets, the amortization on intangible assets should be applied…
Q: Atchison Corporation purchased equipment, a building, and land for $1,000,000 ($200,000 in cash and…
A: Allocation of Purchase Price Appraised Value Percentage of Total Appraised Value Total Cost of…
Q: Charles Ltd (C Ltd) owns equipment with market value of $2,000,000 and cost of $2,200,000. Success…
A: Record the journal entries for exchange of asset in books of C ltd considering the exchange having…
Q: Dynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets…
A: Introduction: Amortization expense is the write-off of an asset over its anticipated useful life,…
Q: DLW Corporation acquired and placed in service the following assets during the year: Cost Basis $…
A: Cost recovery is an accounting method in which a business only records revenue from a transaction…
Q: 1 Nutty Company made the following individuni cash purchases: Land and building Machinery and office…
A: Generally accepted accounting principles, or GAAP, require a business to record an exchange of stock…
Q: Perry Corporation acquired land, buildings, and equipment from a bankrupt company at a lump-sum…
A: lumpsum price including appraisal cost is $…
Q: What is the goodwill arising from the acquisition?
A: Goodwill= Consideration paid - Fair value of assets - Fair value of liabilities Where Consideration…
Q: Asset 4: This machinery was acquired by trading in used machinery. (The exchange lacks commercial…
A: Journal entry - It refers to the process where the business transactions are recorded in the books…
Q: Mega Corp purchased assets on a lump-sum basis. Mega paid $2,400,000 for land, building, machinery…
A: Cost of the assets = Amount paid x FMV of the assets / Total FMV of all assets purchased Total FMV…
Q: A Ltd purchases the B Ltd for the following consideration of: Cash : $150 000 Land: carrying…
A: Solution: Fair value of net asset of B Ltd = ($390,000 + $95,000 - $70,000) - $195,000 =$200,000
Q: Lauren Ltd bought some land on 1 January 20X4 for GHS 500,000. On 31 December 20X5, this land was…
A: Land is a long term assets for almost all business and it can be revalued at fair value but the…
Q: Lauren Ltd bought some land on 1 January 20X4 for GHS 500,000. On 31 December 20X5, this land was…
A: Recoverable amount = Higher amount of [Fair value less costs to sell or Value in use].
Q: Archibald Corporation, a public corporation exchanged an asset with Bass Industries. The following…
A: Journal Entries on the books of Archibald Corp assuming that the exchange would have commercial…
Q: Ladd Company sold a plant asset that originally cost$50,000 for $22,000 cash. If Ladd correctly…
A: Depreciation is the diminish or decrease in the value of an asset over a number of years. It is the…
Q: Lake Incorporated purchased all of the stock of Huron Company, paying $950,000 cash. Lake also…
A: Goodwill: Goodwill is a non-physical intangible asset which is generated when a company is acquired…
Q: Purple Corp. purchased all of the listed assets and liabilities of Sudden Corp. for $1,600,000. The…
A: Goodwill: Goodwill is an intangible asset. It is defined as the excess of cost of an acquired…
Q: ABC Co. acquired land, buildings, and equipment from XYZ Co. at a lump-sum price of P1,800,000. ABC…
A: If the amount paid for purchasing more than one asset then the cost of the asset is determined by…
Q: Atchison Corporation purchased equipment, a building, and land for $1,000,000 ($200,000 in cash and…
A: The journal entries are prepared to record the day to day transactions of the business.
Q: Company X decided to buy some assets from the heater company, Company Y, for $100,000.00 Company Y…
A: In consideration with the Accounting Standard 10 and the…
Q: DLW Corporation acquired and placed in service the following assets during the year: Asset Date…
A: In the year of purchase and sale, convention is applied according to the class of asset. For…
Q: James Company sells a plant asset that originally cost $180,000 for $60,000 on December 31, 20x1.…
A: Calculation of book value of plant at the time of disposal : Book Value = Cost of asset -…
Q: Having an issue with this problem. Thank you
A: Goodwill is the excess amount paid by the company over the fair value of the company in which…
Q: A purchased B, paying $850,000 cash. The books values and fair values of acquired assets and…
A: The goodwill is calculated as difference between purchase price and excess of fair value of assets…
Q: Lowes Corporation sold its storage building for $86,000 cash. Lowes originally purchased the…
A: Solution:- Preparation of the journal entry to record the sale of this building as follows under:-
Q: Barry Company sells a patent for $25,000. The patent had an acquisition cost of $120,000 and…
A: Accumulated Amortization:Accumulated amortization is the total sum of amortization expense recorded…
Q: Xtra Company purchased a business from Argus for $96,000 above the fair value of its net assets…
A: Goodwill is classified as an intangible asset on the balance sheet. Under US GAAP and IFRS, goodwill…
Q: New Harvest Bakery acquired all the outstanding common stock of Red Rock Bakery for $72,800 in cash.…
A: Calculation of fair value of net identifiable assets : Current assets =…
Q: W Co. acquired the intangible assets listed below for a total lump sum price of P400,000. Intangible…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Robinson Company purchased Franklin Company at a price of $2,500,000. The fair market value of…
A: Goodwill: It can be defined as an intangible asset that is measured when an existing company is…
Q: Harold Fishing Gear Company's acquired Sea Breeze Ltd for $450,000. The book values and fair values…
A: Solution: Purchase price of Sea Breeze Ltd = $450,000 Fair value of net assets of Sea Breeze = Fair…
Q: Goodman Company exchanges an asset with The Pryce Corporation. Details of the exchange are as…
A: Journal entry is the primary entry that records the financial transactions initially.
Q: Bridgeport Industries purchased the following assets and constructed a building as well. All this…
A: Journal entries (JE) refers to posting of the transactions into the books of the entity as well as…
Q: Dain’s Diamond Bit Drilling purchased the following assets this year. Purchase Original Asset…
A: Concept used: Threshold for section 179 phase out is $800,000 and Maximum 179 expense before phase…
Q: Big Company purchased all of the assets of Small Company 5 years ago recording Goodwill at the time…
A: Impairment of assets means reducing the book value of assets when carrying amount is more than…
Q: TCO C) Floyd Company purchases Haeger Company for $800,000cash on January 1, 2011. The book value of…
A: Consolidation: It can be defined as the process of merging or combining various smaller businesses…
Q: First Company purchased Second Company for $19,000,000 cash. At the time of purchase, Second…
A: Business combination can be done by way of mergers and acquisitions. n an acquisition, a company…
Q: A Ltd purchases the B Ltd for the following consideration of: Cash : $150 000 Land: carrying amount…
A: Goodwill = Purchase consideration paid + Fair value of non controlling interest - Fair value of net…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- K First Company purchased Second Company for $20,000,000 cash. At the time of purchase, Second Company's assets had a market value of $30,000,000 and the liabilities had a market value of $19,000,000. At the time of purchase, Second Company's assets had a book value of $12,000,000 and the liabilities had a book value of $8,000,000. What amount of goodwill is recorded? OA. $19,000,000 OB. $10,000,000 OC. $11,000,000 O D. $9,000,000 G1. ANEMONE Company engaged your services to compute the goodwill in the purchase of another company which provided the following: Net income Net assets 2018 P 2,000,000 P 7,800,000 2019 2,500,000 8,700,000 2020 3,900,000 9,000,000 Goodwill is measured by capitalizing excess earnings at 25% with normal on average net assets at 20% How much is the goodwill?Columbia recently acquired all of Mercury's net assets in a business acquisition. The cash purchase price was $22,000,000. Mercury's assests and liabilites had the following costs and appraised values: Current assets Land, building and equipment Current liabilites Mortgage payable How much goodwill will rewult from this transaction? Cost Basis $ 6,000,000 $ 14,000,000 Appraised Value $ 6,000,000 $23,000,000 $4,000,000 $4,000,000 $ 10,000,000 $10,000,000
- Robinson Company purchased Franklin Company at a price of $2,500,000. The fair market value of thenet assets purchased equals $1,800,000. What is the amount of goodwill that Robinson records at the purchase date?A SE company has on its books for its proved property: P/P- tangible assets $50,000 Well and E&F $220,000 Accumulated DD&A $32,000 If the entire proved property is sold for $220,000, what will be any gain or loss? AccouintingIris Company purchased another entity for P8,000,000 cash. The assets and liabilities of the acquire are as follows: Carrying Amount Fair Value 1,000,000 500,000 Cash 1,000,000 400,000 Inventory In-process R&D 6,000,000 5,000,000 Assembled workforce 1,100,000 1,200,000 3,000,000 Liabilities 2,500,000 What is the goodwill arising from the acquisition? A. 4,500,000 В. 3,300,000 с. 3,100,000 D. 2,000,000
- 13. Karen Company engaged your services to compute for the goodwill in the purchase of another entity which provided the following: Year Net Income Net Assets 2016 Php 1,000,000 Php 3,900,000 2017 Php 1,250,000 Php 4,350,000 2018 Php 1,950,000 Php 4,500,000 Goodwill is measured by capitalizing excess earnings at 25% with normal return on average net assets at 20%. How much is the purchase price?If a company exchanges an asset with a book value of $260,000, an original cost of $500,000, and a fair value of $300,000 plus cash of $100,000 for a new asset, what is the gain or loss recognized on the transaction?Assume Sambazon.com e sold an acai processing machine for $172,000 cash. If accumulated depreciation on the sale date was $58,311 and a gain of $6,721 was recognized on the sale, what was the original cost of the asset? O $223,590 O $216,869 O $165,279 O $65,032 O $113,689
- Compute the amount of acquired Goodwill, including contingent earnings and bargain purchase Assume that you are charged with assigning fair values related to a $3,800,000 acquisition. You determine that the fair value of the net identifiable tangible assets is $1,850,000. You also conclude that the purchase included a Customer List with a fair value at $340,000. a. How much Goodwill will you record in this acquisition? $ 1,610,000 ✓ b. Continuing from part (a), now also assume that the purchase and sale agreement requires the payment of an additional $925,000 if the subsidiary achieves a certain level of earnings. You estimate the fair value of that contingent earnings clause in the agreement to be $220,000. How does this additional information affect your computation of Goodwill? The amount of Goodwill recorded is $ 1,830,000 c. This part of the exercise is independent parts (a) and (b). Assume that the purchase price is $3,800,000 and that fair value of the net identifiable tangible…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 $190,000Measuring and recording goodwill Princeton has acquired several other companies. Assume that Princeton purchased Kelleher for $9,000,000 cash. The book value of Kelleher’s assets is $19,000,000 (market value, $20,000,000), and it has liabilities of $12,000,000 (market value, $12,000,000). Requirements Compute the cost of the good-will purchased by Princeton. Record the purchase of Kelleher by Princeton.