ACCT 401 Quiz 2 (Chapter 2)

ACCT 401 Quiz 2 (Chapter 2) - Business Combinations (ACCT...

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Business Combinations (ACCT 401) Quiz 2 Name________________________________________________________ I. Show below is the balance sheet for Tiny Company on January 1, 20X9: Current Assets $ 80,000 Liabilities $250,000 Land 170,000 Common Stock 500,000 Building 650,000 Retained Earnings 150,000 $900,000 $900,000 The fair values ate: Current Assets- $78,000, Land- $200,000, Building- $800,000, and Liabilities- $255,000. In addition, In-Process R & D has been identified and valued at $30,000. Huge Company acquires the net assets of Tiny Company for $900,000. Huge also incurred direct acquisition costs of $25,000. Prepare all journal entries on Huge’s books connected with the acquisition. Current Assets 78,000 Land 200,000 Building 800,000 Capitalized R & D 30,000 Goodwill 47,000 Liabilities 255,000 Cash 900,000 Acquisition Expense 25,000 Cash 25,000 Supporting Calculations: Fair Value of Consideration $900,000 Fair Value Allocation Schedule Fair Value of Net Assets (853,000) Fair Value of Consideration
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This note was uploaded on 10/02/2009 for the course ACCT 401 taught by Professor Ross,m during the Spring '08 term at Western Kentucky University.

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ACCT 401 Quiz 2 (Chapter 2) - Business Combinations (ACCT...

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