Question
In: Accounting
On July 31, 2020, Oriole Company paid $2,750,000 to acquire all of the common stock of...
On July 31, 2020, Oriole Company paid $2,750,000 to acquire all
of the common stock of Conchita Incorporated, which became a
division (a reporting unit) of Oriole. Conchita reported the
following balance sheet at the time of the acquisition.
| Current assets |
$730,000 |
Current liabilities |
$560,000 |
|||
|---|---|---|---|---|---|---|
| Noncurrent assets |
2,450,000 |
Long-term liabilities |
460,000 |
|||
| Total assets |
$3,180,000 |
Stockholders’ equity |
2,160,000 |
|||
| Total liabilities and stockholders’ equity |
$3,180,000 |
It was determined at the date of the purchase that the fair value
of the identifiable net assets of Conchita was $2,510,000. Over the
next 6 months of operations, the newly purchased division
experienced operating losses. In addition, it now appears that it
will generate substantial losses for the foreseeable future. At
December 31, 2020, Conchita reports the following balance sheet
information.
| Current assets |
$470,000 |
||
| Noncurrent assets (including goodwill recognized in purchase) |
2,050,000 |
||
| Current liabilities |
(620,000 |
) |
|
| Long-term liabilities |
(420,000 |
) |
|
| Net assets |
$1,480,000 |
Finally, it is determined that the fair value of the Conchita
Division is $1,850,000.
a. Compute the amount of goodwill recognized, if any, on July
31, 2020. (If answer is zero, do not leave answer field
blank. Enter 0 for the amount.)
|
The amount of goodwill b. Determine the impairment loss, if any, to be recorded on
December 31, 2020. (If answer is zero, do not leave
answer field blank. Enter 0 for the
amount.)
|
Solutions
ekkarill92 answered 1 year agoRelated Solutions
On July 31, 2020, Ivanhoe Company paid $2,750,000 to acquire all of the common stock of...
On July 31, 2020, Ivanhoe Company paid $2,750,000 to acquire all
of the common stock of Conchita Incorporated, which became a
division (a reporting unit) of Ivanhoe. Conchita reported the
following balance sheet at the time of the acquisition.
Current assets
$830,000
Current liabilities
$550,000
Noncurrent assets
2,450,000
Long-term liabilities
450,000
Total assets
$3,280,000
Stockholders’ equity
2,280,000
Total liabilities and stockholders’ equity
$3,280,000
It was determined at the date of the purchase that the fair value
of the identifiable net...
On July 31, 2020, Crane Company paid $2,950,000 to acquire all of the common stock of...
On July 31, 2020, Crane Company paid $2,950,000 to acquire all
of the common stock of Conchita Incorporated, which became a
division (a reporting unit) of Crane. Conchita reported the
following balance sheet at the time of the acquisition.
Current assets
$720,000
Current liabilities
$520,000
Noncurrent assets
2,650,000
Long-term liabilities
420,000
Total assets
$3,370,000
Stockholders’ equity
2,430,000
Total liabilities and stockholders’ equity
$3,370,000
It was determined at the date of the purchase that the fair value
of the identifiable net...
Problem 12-04 On July 31, 2020, Sunland Company paid $2,800,000 to acquire all of the common...
Problem 12-04
On July 31, 2020, Sunland Company paid $2,800,000 to acquire all
of the common stock of Conchita Incorporated, which became a
division (a reporting unit) of Sunland. Conchita reported the
following balance sheet at the time of the acquisition.
Current assets
$720,000
Current liabilities
$510,000
Noncurrent assets
2,500,000
Long-term liabilities
410,000
Total assets
$3,220,000
Stockholders’ equity
2,300,000
Total liabilities and stockholders’ equity
$3,220,000
It was determined at the date of the purchase that the fair value
of the...
On May 31, 2021, Sunland Company paid $3,780,000 to acquire all of the common stock of...
On May 31, 2021, Sunland Company paid $3,780,000 to acquire all
of the common stock of Carla Vista Corporation, which became a
division of Sunland. Carla Vista reported the following balance
sheet at the time of the acquisition:
Current assets
$ 972,000
Current liabilities
$ 648,000
Noncurrent assets
2,916,000
Long-term liabilities
540,000
Stockholder's equity
2,700,000
Total assets
$3,888,000
Total liabilities and
stockholder's equity
$3,888,000
It was determined at the date of the purchase that the fair value
of the identifiable net assets...
On May 31, 2021, Sunland Company paid $3,780,000 to acquire all of the common stock of...
On May 31, 2021, Sunland Company paid $3,780,000 to acquire all
of the common stock of Carla Vista Corporation, which became a
division of Sunland. Carla Vista reported the following balance
sheet at the time of the acquisition:
Current assets
$ 972,000
Current liabilities
$ 648,000
Noncurrent assets
2,916,000
Long-term liabilities
540,000
Stockholder's equity
2,700,000
Total assets
$3,888,000
Total liabilities and
stockholder's equity
$3,888,000
It was determined at the date of the purchase that the fair value
of the identifiable net assets...
XYZ Company had 200,000 shares of common stock outstanding on December 31, 2020. On July 1,...
XYZ Company had 200,000 shares of common stock outstanding on
December 31, 2020. On July 1, 2021, XYZ issued an additional 40,000
shares for cash. On January 1, 2021, XYZ issued 10,000 shares of
convertible preferred stock. The preferred stock had a par value of
$100 per share and paid a 5% dividend. Each share of preferred
stock is convertible into 8 shares of common. During 2021, XYZ paid
the regular annual dividend on the preferred and common stock. Net...
XYZ Company had 200,000 shares of common stock outstanding on December 31, 2020. On July 1,...
XYZ Company had 200,000 shares of common stock outstanding on
December 31, 2020. On July 1, 2021, XYZ issued an additional 47,000
shares for cash. On January 1, 2021, XYZ issued 17,000 shares of
convertible preferred stock. The preferred stock had a par value of
$100 per share and paid a 6% dividend. Each share of preferred
stock is convertible into 9 shares of common. During 2021, XYZ paid
the regular annual dividend on the preferred and common stock. Net...
In late July 2017, KARA Ltd., a private company, paid $1.90 million to acquire all of...
In late July 2017, KARA Ltd., a private company, paid $1.90
million to acquire all of the net assets of DYC Corp., which then
became a division of KARA. Flint reported the following statement
of financial position at the time of acquisition:
Current assets
$415,000
Current liabilities
$300,000
Non-current assets
1,335,000
Long-term liabilities
265,000
Shareholders’ equity
1,185,000
$1,750,000
$1,750,000
It was determined at the date of the purchase that the fair value
of the identifiable net assets of DYC was...
On 1/1/20, Coke Co. paid $2,800,000 to acquire all of the common stock of Dodo Corp....
On 1/1/20, Coke Co. paid $2,800,000 to acquire all of the common
stock of Dodo Corp. On that date, Dodo's equity included $1,000,000
capital stock and $1,600,000 of retained earnings. An appraisal of
Dodo's assets identified a patent that had a market value of
$140,000 and a life of 5 years that was unrecorded. Dodo's reported
earnings for 2020 totaled $512,000 and it paid $160,000 of
dividends during the year. The amortization of allocations related
to the investment was $28,000....
On 1/1/20, Coke Co. paid $2,800,000 to acquire all of the common stock of Dodo Corp....
On 1/1/20, Coke Co. paid $2,800,000 to acquire all of the common
stock of Dodo Corp. On that date, Dodo's equity included $1,000,000
capital stock and $1,600,000 of retained earnings. An appraisal of
Dodo's assets identified a patent that had a market value of
$140,000 and a life of 5 years that was unrecorded. Dodo's reported
earnings for 2020 totaled $512,000 and it paid $160,000 of
dividends during the year. The amortization of allocations related
to the investment was $28,000....
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Initial Question: Please explain your thoughts on Muslim inmates, or any other inmates, who are not...
- American football uses a field that is 100.0 yd long, whereas a soccer field is 100.0...
- Tesla: Current Issues Tesla announced the delay for “Model 3” production, again. Since March 2016, half...
- After reading the Graham, Campbell, and Rajgopal article, you might get the implication for the motivation...
- 1. Glucokinase and hexokinase perform the same enzymatic function yet their role in carbohydrate metabolism /...
- How to draw a service blueprint of 'Deliveroo'?
- 3. In an international ballroom dancing competition, competitors are scored by a panel of judges on...
ADVERTISEMENT