Columbia recently acquired all of Mercury's net assets in a business acquisition. The cash purchase price was $22,000,000. Mercury's assests and liabilites had the following costs and appraised values: Current assets Land, building and equipment Current liabilites Mortgage payable How much goodwill will rewult from this transaction? Cost Appraised Value Basis $ 6,000,000 $ 6,000,000 $ 14,000,000 $23,000,000 $4,000,000 $4,000,000 $ 10,000,000 $10,000,000
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- Iris Company purchased another entity for P8,000,000 cash. The assets and liabilities of the acquire are as follows: Carrying Amount Fair Value 1,000,000 500,000 Cash 1,000,000 400,000 Inventory In-process R&D 6,000,000 5,000,000 Assembled workforce 1,100,000 1,200,000 3,000,000 Liabilities 2,500,000 What is the goodwill arising from the acquisition? A. 4,500,000 В. 3,300,000 с. 3,100,000 D. 2,000,000ACME Co. paid $110,000 for the net assets of Comb Corp. At the time of the acquisition the following information was available related to Comb's balance sheet: Book Value Fair Value Current Assets $50,000 $ 50,000 Building 80,000 100,000 Equipment 40,000 50,000 Liabilities 30,000 30,000 What is the amount of goodwill or gain related to the acquisition? a. Goodwill of $60,000 b. Goodwill of $30,000 c. A gain of $30,000 d. A gain of $60,000Larceny 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
- Assume Sambazon.com e sold an acai processing machine for $172,000 cash. If accumulated depreciation on the sale date was $58,311 and a gain of $6,721 was recognized on the sale, what was the original cost of the asset? O $223,590 O $216,869 O $165,279 O $65,032 O $113,689Painted 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…Brinker International Inc.the parent of Chili's, acquired Thallicious for $32,170,000. The fair value of all Thailicioustangible and intangible assets was $30.000.000 Brinker will amortize any goodwill over the maximum number of years allowedWhat is the annual amortization of goodwill for this acquisition?
- 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 GThe following information relates to Mangi Food cash generated unit. Goodwill attributable to the cash generated unit amounts to R57 000 and the CGU consists of the following assets. Acquisition date Cost Depreciation policy Building 1 January 2019 356 780 5 years straight line with R10 000 residual value Plant 31 July 2017 234 600 10% diminishing balance Equipment 6 July 2019 123 450 5% on cost Machinery 1 January 2017 200 000 10% on cost Value in use and fair value amounted to R620 000 and R565 700 respectively. And cost to sell were estimated as R13 400. Required Calculate and allocate the impairment of CGU.At December 31, Year 5, Aaron Co. had the following property, plant, and equipment: Asset Fair Value Cost to Sell Present Value of All Cash Flows Expected from the Asset Sum of All Undiscounted Cash Flows Expected from the Asset Useful Life from the Acquisition Date (Depreciation Method) Residual Value Equipment $220,000 $5,000 $230,000 $255,000 6 years (Straight Line) $0 Machine set 310,000 8,000 320,000 335,000 4 years (SYD) 0 Land 660,000 9,000 600,000 640,000 Determine the impairment losses recognized for Year 5 under U.S. GAAP and IFRS. Enter the appropriate amounts in the designated cells below. Enter all amounts as positive numbers. If the correct answer is zero, enter a zero (0). Purchase Receipt 3 - Land Purchase Date: 1/1/Year 3 Purchase Amount: $650,000 Purchase Receipt 2 - Machine Set Purchase Date: 1/1/Year 5 Purchase Amount: $600,000 Purchase Receipt 1 - Equipment Purchase Date: 7/1/Year 2 Purchase…
- The goodwill of Dolly Company was due to the acquisition of Puppy on December 1, 2022. The carrying amount and fair value of the assets and liabilities of Puppy as of the date of acquisition were as follows: Accounts Carrying Amount Fair Value Cash P50,000 P50,000 Accounts receivable 500,000 500,000 Inventory 1,000,000 1,500,000 Investment property 0 350,000 Property, plant and equipment 2,000,000 3,150,000 Liabilities 2,000,000 2,000,000 The bookkeeper of Dolly recorded goodwill at the excess of purchase price over the book value of the net assets of Puppy at P1,850,000. How much should Dolly Company report goodwill as of December 31, 2022?New Harvest Bakery acquired all the outstanding common stock of Red Rock Bakery for $68,000 in cash. The book values and fair values of Red Rock's assets and liabilities were as follows: Current assets Property, plant, and equipment Other assets Current liabilities Long-term liabilities. Required: Calculate the amount paid for goodwill. Goodwill Book Value $ 24,000 44,000 4,000 16,000 24,000 Fair Value $30,000 56,000 6,000 16,000 22,000Topic: Intangible Assets (Goodwill) Guinevere Company is planning to sell the business to new interests. The cumulative net earnings for the past five years amounted to P16,500,000 including expropriation loss of P1,500,000. The normal rate of return is 20%. The fair value of net assets of entity at current year end was P10,000,000. What is the amount of goodwill if: 1. Excess earnings are purchased for 5 years? A. 8,000,000 B. 4,000,000 C. 5,000,000 D. 4,500,000 2. Excess earnings are capitalized at 25%? A. 7,200,000 B. 6,400,000 C. 8,000,000 D. 3,600,000 3. Annual average earnings are purchased for 3 years? A. 10,800,000 B. 18,000,000 C. 4,800,000 D. 5,400,000 4. Annual average earnings are capitalized at 25%? A. 1,600,000 B. 3,600,000 C. 4,400,000 D. 2,000,000 5. Excess earnings are discounted at 12% for 5 years? (the PV of an ordinary annuity of 1 for 5 years at 12% is 3.60) A. 12,960,000 B. 10,800,000 C. 5,760,000 D. 7,200,000