CH25 jawab - Goodwill Baker Company is buying Charlie Co....

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Goodwill Baker Company is buying Charlie Co. for $89 million in cash. Charlie Co. has $6.5 million in working capital and no long-term debt. The fixed assets of Charlie Co. were just appraised at $77 million. Baker Company will use the purchase accounting method to record this acquisition. What is the amount of the goodwill that will be shown on Baker Company’s books after the acquisition?
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Goodwill m 5 . 5 $ m 5 . 83 $ m 89 $ ) m 77 $ m 5 . 6 ($ m 89 $ Goodwill = - = + - =
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Cash acquisition Firm A is acquiring Firm B for $20,000 in cash. Neither firm has any debt. Firm A has 2,000 shares of stock outstanding at a price of $30 a share. Firm B has 800 shares of stock outstanding at a price of $20 a share. The incremental value of the acquisition is estimated at $7,500. What is the value of Firm B to Firm A?
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Cash acquisition 500 , 23 $ 500 , 7 $ 000 , 16 $ 500 , 7 $ ) 20 $ 800 ( V V V B * B = + = + × = + =
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Stock acquisition Firm Y has agreed to be acquired by Firm X for $18,000 worth of
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This note was uploaded on 10/02/2010 for the course ACCOUNTING 10835 taught by Professor 123 during the Spring '10 term at Abu Dhabi University.

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CH25 jawab - Goodwill Baker Company is buying Charlie Co....

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