Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for $12.200.000 in cash. The book valeofSmith's net assets (assets minus liabilities) was $8,800.000. The fair values of all of Smith's assets and labiliies were equal to theirbook values with the following exceptions:hook Valum$2,300,0009,000,000300,000YAir Valun2,000,00010,500,0001,400,000ReceivablesProperty, plant, and equipmentIntangible aanetaRequired:Calculate the amount paid for goodwill.Goodwill

Goodwill is the amount of excess of consideration paid over the fair value of net assets of the…

Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for $12,200,000 in cash. The book value of Smith's net assets (assets minus liabllities) was $8,800,000. The fair values of all of Smith's assets and labilities were equal to their book values with the following exceptions: hook Valum $2,300,000 2,000,000 9,000,000 300,000 YALE Valun Receivables Proparty, plant, and equi pment Intangible anneta 10,500,000 1,400,000 Required: Calculate the amount paid for goodwill. Goodwill

Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for $12,200,000 in cash. The book value of Smith's net assets (assets minus liabllities) was $8,800,000. The fair values of all of Smith's assets and labilities were equal to their book values with the following exceptions: hook Valum $2,300,000 2,000,000 9,000,000 300,000 YALE Valun Receivables Proparty, plant, and equi pment Intangible anneta 10,500,000 1,400,000 Required: Calculate the amount paid for goodwill. Goodwill

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter18: Corporations: Organization And Capital Structure

Section: Chapter Questions

Problem 1BCRQ

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Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for $11,000,000 in cash. The book value of Smith's net assets (assets minus liabilities) was $7,800,000. The fair values of all of Smith's assets and liabilities were equal to their book values with the following exceptions: Book Value Fair Value $1,100,000 9,400,000 1,200,000 $1,300,000 8,000,000 200,000 Receivables Property, plant, and equipment Intangible assets Required: Calculate the amount paid for goodwill.
Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for $11,000,000 in cash. The book value of Smith’s net assets (assets minus liabilities) was $7,800,000. The fair values of all of Smith’s assets and liabilities were equal to their book values with the following exceptions: Book Value Fair ValueReceivables $ 1,300,000 $1,100,000Property, plant, and equipment 8,000,000 9,400,000Intangible assets 200,000 1,200,000 Required:Calculate the amount paid for goodwill.
On August 1, 20x1, German Corp. acquired all the identifiable assets and assumed the liabilities of Marasigan Corp. by paying cash of P6,000,00O. Marasigan Corp assets and liabilities have a book values of P7,000,000 and P2,200,000, respectively. The book value of assets and liabilities of Marasigan Corp. is equal to its fair value, except for inventory which is overvalued by P50,000; undervalued building of P400,000; and undervalued accounts payable of P20,000. German Corp. also paid general and administrative cost of P5,000; finder's fee of P6,000 and accountants fee of P25,00O. What is the total amount of goodwill after business combination?
During the current year, Brewer Company acquired all of the outstanding common stock of Miller Incorporated paying $11,600,000 cash. The book values and fair values of Miller's assets and liabilities acquired are listed below: 1,425,000Inventories2,300,0003,600,000 Property, plant, and Book ValueFair ValueAccounts receivable$ 1,600,000$ equipment8,600,00011,225,000Accounts payable 2,600,0002,600,000Bonds payable4,100,0003,725,000 Required: Prepare the journal entry to record the acquisition by Brewer Company. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Popoy Corporation (PC) purchased all the common shares of Sia Company (SC) on January 1, 20X1, for P180,000 cash. The fair value and carrying amounts of SC's net identifiable assets are equal. The trial balances for both companies on December 31, 20x1 are as follows: Popoy Corporation Debit Sia Company Credit Debit Credit Cash 15,000 30,000 70,000 325,000 5,000 70,000 60,000 225,000 Accounts Receivable Inventory Depreciable Assets, net Investment in Samantha Company 180,000 25,000 Operating Expenses Cost of Goods Sold 15,000 105,000 75,000 Dividends Declared 40,000 10,500 Accounts Payable Notes Payable Common Stock Retained Earnings Sales 50,000 40,500 120,000 100,000 80,000 120,000 99,500 200,000 230,000 200,000 10,500 790,000 790,000 Dividend Income 460,500 460,500 Required: Prepare the set of consolidated financial statements at the end of the year. Follow the process given in the handout.
Proton Company acquired all of the outstanding ordinary shares of an acquiree paying P7,400,000 cash. The carrying amount and fair value of the assets and liabilities of the acquiree were: Carrying Amount Fair Value P P Accounts receivable 1,080,000 975,000 Inventory 1,620,000 2,400,000 Property and equipment 5,400,000 6,975,000 Accounts payable (1,800,000) (1,800,000) Bonds payable (2,700,000) (2,475,000) Net assets acquired P3,600,000 P6,075,000 What amount of goodwill should be reported at year-end? O P3,800,000 PO O P1,325,000 P2,300,000
Lake Incorporated purchased all of the outstanding stock of Huron Company paying $967,000 cash. Lake assumed all of the liabilities of Huron. Book values and fair values of acquired assets and liabilities were: Current assets (net) Property, plant, equip. (net) Liabilities Lake would record goodwill of: Multiple Choice $73,700. $372,900. $249,700. $0. Book Value Fair Value $131,300 $123,300 613,000 770,000 150,200 176,000
Northern Equipment Corporation purchased all the outstanding common stock of Pioneer Equipment Rental for $5,600,000 in cash. The book values and fair values of Pioneer’s assets and liabilities were Book Value Fair ValueAccounts Receivable $ 750,000 $ 650,000Buildings 4,100,000 4,800,000Equipment 110,000 200,000Accounts Payable (750,000) (750,000)Net assets $ 4,210,000 $ 4,900,000Required:1. Calculate the amount Northern Equipment should report for goodwill.2. Record Northern Equipment’s acquisition of Pioneer Equipment Rental.
Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $216,000. At that date, the fair value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common stock for $97,000. Summarized balance sheets for Split on the dates indicated are as follows: Assets Cash Accounts Receivable Inventory Buildings & Equipment (net) Total Assets Liabilities & Equities Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities & Equities 20X7 $ 49,000 51,000 72,000 370,000 $542,000 December 31 20X8 Balance in investment account $ 79,000 91,000 102,000 350,000 $622,000 20X9 $ 99,000 121,000 162,000 330,000 $712,000 $ 77,000 $127,000 $167,000 105,000 105,000 105,000 155,000 155,000 155,000 205,000 235,000 285,000 $542,000 $622,000 $712,000 Split paid dividends of $22,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and…
8. Kopi Company acquired all of the outstanding ordinary shares of an acquiree paying P9,000,000 cash. The carrying amount and fair value of the assets and liabilities of the acquiree were: Carrying amount Fair Value Accounts receivable P 1,500,000 Inventory 4,800,000 Land 7,500,000 Property and Equipment 2,500,000 Accounts payable 2,500,000 Bonds Payable 1,900,000 P 1,200,000 3,000,000 5,000,000 2,000,000 2,500,000 1,500,000 What amount should be recognized as goodwill or negative goodwill? a. P 1,900,000 b. P-1,900,000 c. P 2,900,000 d. P-2,900,000
The equity accounts of Jordan Company total $2,000,000. On 1/1/X1, Davidson Company purchased 60% of Jordan for $1,985,000. The fair values of net assets are equal to book values. What are goodwill and noncontrolling interests amounts?
On January 1, 20x1, Magnum Corp. acquired all the identifiable assets and assumed the liabilities of Colt Corp. The book values and fair values of Magnum and Colt Corp. prior to business combination are as follows: Magnum Colt Book value Fair Value Book Value Fair Value Cash 6,000,000 6,000,000 1,000,000 1,000,000 Accounts Receivable 500,000 470,000 120,000 105,000 Allowance for doubtful account (40,000) (20,000) Inventories 1,000,000 950,000 500,000 510,000 Land 3,000,000 3,200,000 1,200,000 1,300,000 Building 2,000,000 1,600,000 1,000,000 850,000 Accumulated Depreciation (500,000) (200,000) Total 11,960,000 12,220,000 3,600,000 Accounts Payable 3,000,000 2,500,000 1,000,000 1,000,000 Notes Payable 500,000 480,000 600,000 550,000 Ordinary share - P100 par 4,000,000 1,000,000 Share premium 1,200,000 200,000…