Homework Adv.xlsx - 2_30(Acquisition method entries for merger 1st Case Fair value of consideraion transferred Fair value of net identifiable assets

Homework Adv.xlsx - 2_30(Acquisition method entries for...

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2_30 (Acquisition method entries for merger) 1st Case: Fair value of consideraion transferred 145000 Fair value of net identifiable assets 120000 Excess to goodwill 25000 Item Book Value Fair value all other 20000 20000 building 90000 50000 land 10000 20000 Trademark 0 30000 Goodwill 0 25000 Total 120000 145000 Journal entries for Allerton's books: Current assets 60000 building 50000 land 20000 trademark 30000 goodwill 25000 Liabilities 40000 Cash 145000 2nd Case: Bargain purchase under acquisition method Fair vale of consideration transferred 110000 Fair value of net identifiable assets 120000 Gain on bargain purchase 10000 Analysis of Acquisition: Item Book Value Fair Value all other 20000 20000 building 90000 50000 land 10000 20000 trademark 0 30000 Total 120000 120000 Journal entry on Allerton's books: Current assets 60000 building 50000 land 20000 trademark 30000 Gain on bargain purchase 10000 Liabilities 40000 Cash 110000 2_31 Acquire subsidiary Investment in Subsidiary 328700 Cash 310800
Contigent performance liability 17900 Analysis of Acquisition: preferred method Item Book Value Fair value Other 111100 111100 Buildings 78900 122000 Customer list 25200 in process r&d 36400 Goodwill 34000 Total 190000 328700 Analysis of Acquisition: alternate method Cash consideration transferred 310800 Contingent performance obligation 17900 Consideration transferred 328700 Fair value of net assets 294700 Goodwill 34000 Receivables 83900 Inventory 70250 Buildings 122000 Equipment 24100 Customer list 25200 R&D Assest 36400 Goodwill 34000 Current liabilities 12900 Long-term liabilities 54250 Investment in subsidiary 328700 Professional services exp 15100 Cash 15100 Journal Entries: Receivables 83900 Inventory 70250 buildings 122000 equipment 24100 customer list 25200 R&D Asset 36400 Goodwill 34000 Current liabilities 12900 Long term liabilities 54250 Cash 310800 Contingent performance liability 17900 Professional services exp 15100 Cash 15100 2_32 a Fair value of the consideration includes: Fair value of stock issued 1500000 Contingent performance obligation 30000
Fair value 1530000 b Stock issue costs reduce additional paid-in capital c In a business combination, direct acquisition costs are expenses. d The par value of 20000 shares issued is recoreded as an increase of 20000 in the common stock account. The $74 fair value in excess of par value ($75-$1) is an increase to additional paid in capital of $1480000 e Fair value of consideration transferred 1530000 Receivables 80000 Patented technology 700000 Customer relationships 500000 In Process R&D 300000 Liabilities -400000 1180000 Good will 350000 Analysis of Acquisition Item Book value

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