Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 11, Problem 11.4BE
To determine
To prepare:
Given information:
Amount of note issued to acquire custom-made refrigerator is $1,500,000.
Time period is 10 years.
Market interest rate is 5%.
Fair value of asset and note is not determinable.
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Students have asked these similar questions
A building with an appraisal value of $125,332 is made available at an offer price of $156,559. The purchaser acquires the property for $31,021 in cash, a 90-day note payable for $27,704, and a mortgage amounting to $55,713. The cost basis recorded in the buyer's accounting records to recognize this purchase is
a.$114,438
b.$125,538
c.$156,559
d.$125,332
a. calculate the purchase consideration
b. calculate the goodwill or bargain purchase for
this transaction
c. Prepare the journal entries in the books of
Chelsea Limited relating to this transaction
Pax Limited showed the following assets and liabilities in its financial statements at 31 December 2018.
DETAILS
PPE
Inventory
Long Term Loans
Account Payable
CARRYING AMOUNT FAIR VALUE
10,000,000 14,000,000
4,200,000 4,400,000
(3,500,000)
(3,500,000)
(2,500,000) (2,500,000)
8,200,000
12,400,000
3.1. The current market rate for similar transactions is 8.5% per annum. Chelsea Limited planned to acquire all the assets
and liabilities of Pax Limited on 1 July 2018 and agreed to pay R13,400,000 in cash on 1 July 2019 in full settlement of
the acquisition.
A building with an appraisal value of $132,331 is made available at an offer price of $151,729. The purchaser acquires the property for $35,281 in cash, a 90-day note
payable for $28,200, and a mortgage amounting to $57,872. The cost basis recorded in the buyer's accounting records to recognize this purchase is
a. $116,448
b. $151,729
c. $121,353
Od. $132,331
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Chapter 11 Solutions
Intermediate Accounting
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