Perkins has acquired several other companies. Assume that Perkins purchased Kettle for $11,000,000 cash. The book value of Kettle's assets is $15,000,000 (market value, $20,000,000), and it has liabilities $10,000,000 (market value, $10,000,000). Requirements Compute the cost of goodwill purchased by Perkins. Record the purchase of Kettle by Perkins. 1. 2. Requirement 1. Compute the cost of goodwill purchased by Perkins. Purchase price to acquire Kettle Market value of Kettle's assets Less: Market value of Kettle's liabilities Less: Market value of Kettle's net assets Goodwill Requirement 2. Record the purchase of Kettle by Perkins, Inc. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit
Q: Robinson Company purchased Franklin Company at a price of $2,500,000. The fair market value of…
A: Given information is: Robinson Company purchased Franklin Company at a price of $2,500,000. The…
Q: Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth…
A: AMOUNT OF GOODWILL : = $5,000,000 - $4,500,000 = $500,000 GOODWILL IS THE AMOUNT WE PAY OVER AND…
Q: Princess has acquired several other companies. Assume that Princess purchased Krandell for…
A: Answer 1:
Q: Tender, Inc. dominates the snack-food industry with its Tasty-Chip brand Assume that Tender, Inc.…
A: Acquisition: It is acquiring by a company of majority shares of another company and by which the…
Q: On February 3, Heidel Co. paid $750,000, check #2050 to buy the plant assets of Rogers Company that…
A: Percent of total appraised value = (Appraised value of asset / Total Appraised value of all…
Q: Sheffield Corporation purchased Sage Hill Company 3 years ago and at that time recorded goodwill of…
A: Impairment of loss: The impairment loss must be recorded so that the asset is written down. There is…
Q: In January 1, 2015, Fun company purchased Company A for $40,000 in cash and paid immediately. Fun…
A: goodwill recognised on the day of purchase = purchase price- ( assets - liabilities ) = $40,000 - (…
Q: Dorel Company is being purchased and has the following balance sheet as of the purchase date:…
A: Net assets of Dorel = Current assets + Fair value of fixed assets - fair value of current…
Q: Short Corporation acquired Hathaway, Inc., for $32,620,000. The fair value of all Hathaway's…
A: In 2001, According to the Financial Accounting Standards Board (FASB) declared in Statement 142,…
Q: Waters Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of…
A: Goodwill: Goodwill is an intangible asset. Goodwill is a reputation of a business which cannot be…
Q: Waters Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of…
A: Goodwill: Goodwill is an intangible asset. Goodwill is a reputation of a business which cannot be…
Q: Reward Company made the following acquisitions during the year as follows; Purchased for P5,400,000,…
A: Answer - Working Note - Calculation of Total Cost : Particular Amount Purchase Price…
Q: Robinson Company purchased Franklin Company at a price of $3,950,000. The fair market value of the…
A: Introduction: Goodwill is an intangible asset related to the purchase of a business by another. When…
Q: Dynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets…
A: Introduction: Amortization expense is the write-off of an asset over its anticipated useful life,…
Q: Dorel Company is being purchased and has the following balance sheet as of the purchase date:…
A: Goodwill at the time of acquisition means the amount paid over and above the net fair value of…
Q: Zenith Corporation sells some of its used store fixtures for $3,757. The acquisition cost of the…
A: In the case of the sale of a fixed asset, only the amount received in cash by the transaction is…
Q: On January 1, 2024, Jackson purchased ABC Company for $900,000. At the time, ABC Company had assets…
A: In case of analysis of valency it is important to understand the assets value and liabilities value…
Q: How much should Dolly Company report goodwill as of December 31, 2022?
A: Goodwill is the amount of money which has been paid by the acquiring company in excess of the net…
Q: Anton Company acquired the net assets of Hair Company on January 1, 2015, for $600,000. Using a…
A: 1. Acquisition is a corporate term used to represent purchase of another company and gaining the…
Q: Larceny Company purchased another entity for P8,000,000. The assets and liabilities of the acquiree…
A: Calculation of fair value of net identifiable assets : Particulars Amount Cash P1,000,000…
Q: Buchanan Imports purchased McLaren Corporation for $4,500,000 cash when McLaren had net assets worth…
A: Journal entry is a primary entry that records the financial transactions initially.
Q: Robinson Company purchased Franklin Company at a price of $3,820,000. The fair market value of the…
A: Goodwill is the value of the company over its fair market value. It is a recognition in respect of…
Q: Samtech Manufacturing purchased land and building for $4 million. In addition to the purchase price,…
A:
Q: Knight Company made the following acquisitions during the year Purchased for P5,400,000 , excluding…
A: SOLUTION- LAND IS A NON CURRENT TANGIBLE FIXED ASSETS WHICH REPRESENTS THE REAL ESTATE OWNED BY THE…
Q: Ayayai Corporation purchased Kingbird Company 3 years ago and at that time recorded goodwill of…
A: Implied value of Goodwill = Fair value of Division- Fair value of Kingbird Division’s net assets…
Q: On January 1, 2011, Barbidel Company purchased another entity at a cost of P9,000,000. The net…
A: Amount of Goodwill on January 1, 2011 = Purchase costs - fair value of net assets = P9,000,000 -…
Q: Farm Fresh Agriculture Company purchased Sunny Side Egg Distribution for $400,000 cash when Sunny…
A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…
Q: Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth…
A: 1.
Q: SEASH, Inc. acquired an office building, land, and equipment in a single basket purchase. The fair…
A: Introduction: - The total purchase cost for all three assets is obtained using the proportion method…
Q: Garcia Co. owns equipment that cost $77,200, with accumulated depreciation of $41,000. Record the…
A: Cost of Equipment 77,200 Less: Accumulated Depreciation 41,000…
Q: In January 1, 2015, Fun company purchased Company A for $40,000 in cash and paid immediately. Fun…
A: It is assumed that there is a typo in the question and the question is asking about the annual…
Q: Arizona Corp. acquired the business Data Systems for $320,000 cash and assumed all liabilities at…
A: a. Calculate the goodwill for Arizona Corporation.
Q: Lake Incorporated purchased all of the stock of Huron Company, paying $950,000 cash. Lake also…
A: Goodwill: Goodwill is a non-physical intangible asset which is generated when a company is acquired…
Q: Assume Sambazon.come sold an acai processing machine for $172,000 cash. If accumulated depreciation…
A: Sale price = $172,000 Accumulated depreciation = $58,311 Gain = $6,721
Q: The balance sheet of Cattleman's Steakhouse shows assets of $86,800 and liabilities of $15,300. The…
A: Goodwill = Purchase consideration - Net assets Where. Net assets = Fair value of total assets - Fair…
Q: cost of land
A: Definition: Fixed asset: Long term tangible assets used in the organization's operations for…
Q: Iris Company purchased another entity for P8,000,000 cash. The assets and liabilities of the acquire…
A: Calculation of fair value of net identifiable assets : Particulars Amount Cash P1,000,000…
Q: UP CAF Company acquired a property for speculation purposes with the intention of selling it at a…
A: Investment property should be recognized in the books of accounts at amount which is spent to…
Q: On August 1, 2017, Concord Corporation acquired Skysong, Inc. for a cash payment of $2.10 million.…
A: Net assets value = Fair value of assets - Liabilities = $4326000-2550000 = $1,776,000
Q: Cozzi Company is being purchased and has the following balance sheet as of the purchase date:…
A: Goodwill In an Acquisition: Goodwill is an intangible asset linked with the acquisition of a…
Q: Lowes Corporation sold its storage building for $86,000 cash. Lowes originally purchased the…
A: Solution:- Preparation of the journal entry to record the sale of this building as follows under:-
Q: Perkins has acquired several other companies. Assume that Perkins purchased Kettle for $11,000,000…
A: Solution:- a)Computation of goodwill as follows under:- The following formula used =Purchase price…
Q: Waters Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of…
A: Intangible Assets: These are the long-term assets having no physical existence. However, the…
Q: The Jacob Corporation acquired land, buildings, and equipment from a bankrupt company at a lump-sum…
A: Given, Cost of Total Asset = $520,000 Appraised Value = $600,000
Q: Ellen Company acquired all of Lil Wayne Corporation's assets and liabilities on June 30, 2021. Lil…
A: Fixed assets are the long-term fixed assets purchased by the firm to increase the productivity of…
Q: Robinson Company purchased Franklin Company at a price of $2,500,000. The fair market value of…
A: Given information is: Robinson Company purchased Franklin Company at a price of $2,500,000. The fair…
Q: In January 1, 2015, Fun company purchased Company A for $40,000 in cash and paid immediately. Fun…
A: Goodwill- It refers to the image of a business, which is an intangible asset but carries some…
Q: First Company purchased Second Company for $19,000,000 cash. At the time of purchase, Second…
A: Business combination can be done by way of mergers and acquisitions. n an acquisition, a company…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- Princess has acquired several other companies. Assume that Princess purchased Kittery for $6,000,000 cash. The book value of Kittery's assets is $16,000,000 (market value, $18,000,000), and it has liabilities of $14,000,000 (market value, $14,000,000). Requirements 1. 2. Compute the cost of goodwill purchased by Princess. Record the purchase of Kittery by Princess. Requirement 1. Compute the cost of goodwill purchased by Princess. Purchase price to acquire Kittery Market value of Kittery's assets Less: Market value of Kittery's liabilities Less: Market value of Kittery's net assets Goodwill Date 4 Requirement 2. Record the purchase of Kittery by Princess, Inc. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Accounts and Explanation 6000000 10 Debit CreditPrincess has acquired several other companies. Assume that Princess purchased Krandell for $8,000,000 cash. The book value of Krandell's assets is $14,000,000 (market value, $19,000,000), and it has liabilities of $15,000,000(market value, $15,000,000). Requirements 1. Compute the cost of goodwill purchased by Princess. 2. Record the purchase of Krandell by Princess. Requirement 1. Compute the cost of goodwill purchased by Princess. Purchase price to acquire Krandell Market value of Krandell's assets Less: Market value of Krandell's liabilities Less: Market value of Krandell's net assets Goodwill Requirement 2. Record the purchase of Krandellby Princess,Inc. (Record debits first, then credits. Select the explanation on the last line of the journal entry table. Check your spelling carefully and do not abbreviate.)has acquired several other companies. Assume that Princess purchased Kittery for $7,000,000 cash. The book value of Kittery's assets is $13,000,000 (market value, $16,000,000), and it has liabilities of $12,000,000 (market value, $12,000,000). Requirements 1. Compute the cost of goodwill purchased by Princess. 2. Record the purchase of Kittery by Princess. Requirement 1. Compute the cost of goodwill purchased by Princess.
- Painted Desert has acquired several companies. Assume that Painted Desert purchased Oak Tree Unlimited for $14,000,000 cash. The book value of Oak Tree Unlimited's assets is $14,000,000 (fair value, $15,000,000), and it has liabilities of $13,000,000 (fair value, $13,000,000). Requirements 1. Compute the cost of goodwill purchased by Painted Desert. 2. Record the purchase of Oak Tree Unlimited by Painted Desert. Requirement 1. Compute the cost of goodwill purchased by Painted Desert. Purchase price to acquire Oak Tree Unlimited Fair value of Oak Tree Unlimited's assets Less: Fair value of Oak Tree Unlimited's liabilities Less: Fair value of Oak Tree Unlimited's net assets Goodwill Requirement 2. Record the purchase of Oak Tree Unlimited by Painted Desert. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit…ABC Company purchased an asset which has the following information: 1. List price of $60000 2. Sales tax of $ 3000 3. Freight charges of $1500 4. Installation charges of $5000 5. Advertising charges of $10000 6. Interest charges of $2000 Requirement: required: A. Which of the above payments must be included in the totala acquisitioncost. B. Calculate the total acquisition cost of the asset.Tender, Inc. dominates the snack-food industry with its Tasty-Chip brand. Assume that Tender, Inc. purchased Concord Snacks, Inc. for $10.4 million cash. The market value of Concord Snacks' assets is $18.6 millia and Concord Snacks has liabilities of $12.7 mllion. Requirements 1. Compute the cost of the goodwill purchased by Tender. 2. Explain how Tender will account for goodwill in future years. Requirement 1. Compute the cost of the goodwill purchased by Tender. (Enter amounts in millions to the nearest tenth of a million, XX) Market value of Concord Snacks' net assets: Less Cost of goodwill Requirement 2. Explain how Tender will account for goodwill in future years. has increased decreased in value. If the goodwill's value has increased, future Tender, Inc. will determine whether its goodwill or decreased, In years, V But goodwill's value has if Choose from any list or enter any number in the input fields and then continue to the next question.
- K First Company purchased Second Company for $20,000,000 cash. At the time of purchase, Second Company's assets had a market value of $30,000,000 and the liabilities had a market value of $19,000,000. At the time of purchase, Second Company's assets had a book value of $12,000,000 and the liabilities had a book value of $8,000,000. What amount of goodwill is recorded? OA. $19,000,000 OB. $10,000,000 OC. $11,000,000 O D. $9,000,000 GABC Company purchased an asset which has the following information: 1. List price of $60000 2. Sales tax of $ 3000 3. Freight charges of $1500 4. Installation charges of $5000 5. Advertising charges of $10000 6. Interest charges of $2000 Requirement: required: A. Which of the above payments must be included in the totala acquisitioncost. B. Calculate the total acquisition cost of the asset. check_circle Expert Answer thumb_up thumb_down Step 1 The cost of the asset includes all those cost which makes the asset relevant for it's intended use. These expenditure include the non refundable taxes, import duties, freight charges and installation The cost of the asset excludes those expenditures for promotional activities, administrative and other overhead expenditures, expenditure on captive consumption, expenditure incurred for opening and inaugurating new facilities. In this case advertising expenditure is excluded and Interest depends on the various factors…Java Dreams shows assets of $86,400 and liabilities of $15,000. The fair value of the assets is $90,000 and the fair value of its liabilities is $15,000. One Mean Bean paid Java Dreams $95,000 to acquire all of its assets and liabilities. One Mean Bean should record goodwill on this purchase as: $20,000 $3,600 $5,000 $23,600
- Compute the amount of acquired Goodwill, including contingent earnings and bargain purchase Assume that you are charged with assigning fair values related to a $3,800,000 acquisition. You determine that the fair value of the net identifiable tangible assets is $1,850,000. You also conclude that the purchase included a Customer List with a fair value at $340,000. a. How much Goodwill will you record in this acquisition? $ 1,610,000 ✓ b. Continuing from part (a), now also assume that the purchase and sale agreement requires the payment of an additional $925,000 if the subsidiary achieves a certain level of earnings. You estimate the fair value of that contingent earnings clause in the agreement to be $220,000. How does this additional information affect your computation of Goodwill? The amount of Goodwill recorded is $ 1,830,000 c. This part of the exercise is independent parts (a) and (b). Assume that the purchase price is $3,800,000 and that fair value of the net identifiable tangible…Melton Devices acquires Beck, a small start-up company, by paying $2,170,900 in cash on January 2. Following are the book values and fair values of Beck on the date of acquisition. (Click the icon to view the book values and fair values.) Read the requirements. Requirement a. What is the amount of goodwill acquired? The amount of goodwill acquired Requirement b. What intangible assets are acquired? Which of the intangibles have an indefinite life? Which will be amortized? What will the amortization expense be in the year after acquisition? (If an input field is not used in the table leave the field empty, do not enter a zero) Intangible Asset Finite or Indefinite Life Amortization Amortized? Expense Trial Balance Beck Book Value Fair Value Cash $ 29,000 $ 29,000 Receivables 100,700 100,650 Manufacturing Equipment 640,350 654,500 Patents (remaining life 8 years) 60,600 684,000 Trademarks 14,650 187,500 Payables 58,904 58,904 Print DoneLarceny Company purchased another entity for P8,000,000. The assets and liabilities of the acquiree at fair value are as follows: Cash P1,000,000 Inventory 500,000 In-process research and development 5,000,000 Assembled workforce 1,200,000 Accounts payable 2,600,000 Notes Payable 400,000 REQUIRED: Determine the amount of goodwill Prepare the journal entry to record the acquisition