The trial balance for the Dark Horse Company follows: Description Cash Inventory Property, plant, and equipment - Net Current liabilities Common stock - No par Retained earnings Totals Debit Credit $ 30,000 100,000 370,000 $ 50,000 150,000 300,000 $ 500,000 $ 500,000 MPL, Inc. offers to acquire Dark Horse. The additional information is given below: Purchase price (Requirement 1 assumption) (Requirement 2 assumption) Purchase price Fair market value of the inventory The plant assets were undervalued by $ 650,000 $ 250,000 $ 180,000 ՄԴ $ 50,000 1. Calculate the amount of goodwill or bargain purchase gain to be recorded on the acquisition. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked wrong.) Fair value of net assets Goodwill (bargain purchase gain) 2. Assume now that MPL, Inc. offers to acquire Dark Horse at the purchase price identified in the data table. Determine the amount of goodwill or bargain purchase gain. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked wrong. Use cell references from prior calculations, if applicable.) Goodwill (bargain purchase gain)
The trial balance for the Dark Horse Company follows: Description Cash Inventory Property, plant, and equipment - Net Current liabilities Common stock - No par Retained earnings Totals Debit Credit $ 30,000 100,000 370,000 $ 50,000 150,000 300,000 $ 500,000 $ 500,000 MPL, Inc. offers to acquire Dark Horse. The additional information is given below: Purchase price (Requirement 1 assumption) (Requirement 2 assumption) Purchase price Fair market value of the inventory The plant assets were undervalued by $ 650,000 $ 250,000 $ 180,000 ՄԴ $ 50,000 1. Calculate the amount of goodwill or bargain purchase gain to be recorded on the acquisition. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked wrong.) Fair value of net assets Goodwill (bargain purchase gain) 2. Assume now that MPL, Inc. offers to acquire Dark Horse at the purchase price identified in the data table. Determine the amount of goodwill or bargain purchase gain. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked wrong. Use cell references from prior calculations, if applicable.) Goodwill (bargain purchase gain)
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity
Section: Chapter Questions
Problem 37RQSC
Related questions
Question
Transcribed Image Text:The trial balance for the Dark Horse Company follows:
Description
Cash
Inventory
Property, plant, and equipment - Net
Current liabilities
Common stock - No par
Retained earnings
Totals
Debit
Credit
$
30,000
100,000
370,000
$
50,000
150,000
300,000
$
500,000 $
500,000
MPL, Inc. offers to acquire Dark Horse. The additional information is given below:
Purchase price
(Requirement 1 assumption)
(Requirement 2 assumption)
Purchase price
Fair market value of the inventory
The plant assets were undervalued by
$
650,000
$ 250,000
$
180,000
ՄԴ
$
50,000
Transcribed Image Text:1. Calculate the amount of goodwill or bargain purchase gain to be recorded on the acquisition.
(Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the
Instructions tab you will be marked wrong.)
Fair value of net assets
Goodwill (bargain purchase gain)
2. Assume now that MPL, Inc. offers to acquire Dark Horse at the purchase price identified in the data table.
Determine the amount of goodwill or bargain purchase gain.
(Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the
Instructions tab you will be marked wrong. Use cell references from prior calculations, if applicable.)
Goodwill (bargain purchase gain)
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