Question
In: Accounting
On May 1, Soriano Co. reported the following account balances along with their estimated fair values:...
|
On May 1, Soriano Co. reported the following account balances along with their estimated fair values: |
| Carrying Amount |
Fair Value | ||||||
| Receivables | $ | 92,500 | $ | 92,500 | |||
| Inventory | 84,000 | 84,000 | |||||
| Copyrights | 172,500 | 537,500 | |||||
| Patented technology | 906,000 | 739,000 | |||||
| Total assets | $ | 1,255,000 | $ | 1,453,000 | |||
| Current liabilities | $ | 205,000 | $ | 205,000 | |||
| Long-term liabilities | 713,000 | 694,000 | |||||
| Common stock | 100,000 | ||||||
| Retained earnings | 237,000 | ||||||
| Total liabilities and equities | $ | 1,255,000 | |||||
|
On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. To facilitate the merger, Zambrano also paid $135,000 to an investment banking firm. |
| The following information was also available: |
| • |
Zambrano further agreed to pay an extra $86,400 to the former owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $43,200. |
| • |
Soriano has a research and development project in process with an appraised value of $237,000. However, the project has not yet reached technological feasibility and the project’s assets have no alternative future use. |
|
Prepare Zambrano’s journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
| a. | $725,800. |
- Record the acquisition of Soriano Co.
Note: Enter debits before credits.
|
| b. | $840,000. |
Journal entry worksheet
- Record the acquisition of Soriano Co.
Note: Enter debits before credits.
|
Solutions
ekkarill92 answered 1 year agoRelated Solutions
On May 1, Soriano Co. reported the following account balances along with their estimated fair values:...
On May 1, Soriano Co. reported the following account balances
along with their estimated fair values:
Carrying Amount
Fair Value
Receivables
$
152,400
$
152,400
Inventory
85,600
85,600
Copyrights
174,000
558,000
Patented technology
836,000
618,000
Total assets
$
1,248,000
$
1,414,000
Current liabilities
$
188,000
$
188,000
Long-term liabilities
664,000
649,700
Common stock
100,000
Retained earnings
296,000
Total liabilities and equities
$
1,248,000
On that day, Zambrano paid cash to acquire all of the assets and
liabilities of Soriano, which...
On May 1, Soriano Co. reported the following account balances along with their estimated fair values:...
On May 1, Soriano Co. reported the following account balances
along with their estimated fair values:
Carrying Amount
Fair Value
Receivables
$
92,500
$
92,500
Inventory
84,000
84,000
Copyrights
172,500
537,500
Patented technology
906,000
739,000
Total assets
$
1,255,000
$
1,453,000
Current liabilities
$
205,000
$
205,000
Long-term liabilities
713,000
694,000
Common stock
100,000
Retained earnings
237,000
Total liabilities and equities
$
1,255,000
On that day, Zambrano paid cash to acquire all of the assets and
liabilities of Soriano, which...
On May 1, Soriano Co. reported the following account balances along with their estimated fair values:...
On May 1, Soriano Co. reported the following account balances
along with their estimated fair values:
Carrying Amount
Fair Value
Receivables
$
163,900
$
163,900
Inventory
89,600
89,600
Copyrights
151,500
592,500
Patented technology
917,000
702,000
Total assets
$
1,322,000
$
1,548,000
Current liabilities
$
239,000
$
239,000
Long-term liabilities
741,000
724,000
Common stock
100,000
Retained earnings
242,000
Total liabilities and equities
$
1,322,000
On that day, Zambrano paid cash to acquire all of the assets and
liabilities of Soriano, which...
On May 1, Soriano Co. reported the following account balances along with their estimated fair values:...
On May 1, Soriano Co. reported the following account balances
along with their estimated fair values:
Carrying Amount
Fair Value
Receivables
$
79,400
$
79,400
Inventory
90,600
90,600
Copyrights
133,000
556,000
Patented
technology
895,000
764,000
Total
assets
$
1,198,000
$
1,490,000
Current
liabilities
$
234,000
$
234,000
Long-term
liabilities
650,000
638,900
Common
stock
100,000
Retained
earnings
214,000
Total
liabilities and equities
$
1,198,000
On that day, Zambrano paid cash to acquire all of the assets and
liabilities of Soriano, which...
On May 1, Soriano Co. reported the following account balances along with their estimated fair values:...
On May 1, Soriano Co. reported the following account balances
along with their estimated fair values:
Carrying Amount
Fair Value
Receivables
$
284,400
$
284,400
Inventory
78,600
78,600
Copyrights
145,000
528,000
Patented technology
873,000
731,000
Total assets
$
1,381,000
$
1,622,000
Current liabilities
$
257,000
$
257,000
Long-term liabilities
742,000
722,500
Common stock
100,000
Retained earnings
282,000
Total liabilities and equities
$
1,381,000
On that day, Zambrano paid cash to acquire all of the assets and
liabilities of Soriano, which...
On May 1, Soriano Co. reported the following account balances along with their estimated fair values:...
On May 1, Soriano Co. reported the following account balances
along with their estimated fair values:
Carrying Amount
Fair Value
Receivables
$
219,000
$
219,000
Inventory
92,000
92,000
Copyrights
152,000
533,000
Patented technology
832,000
677,000
Total assets
$
1,295,000
$
1,521,000
Current liabilities
$
256,000
$
256,000
Long-term liabilities
685,000
673,000
Common stock
100,000
Retained earnings
254,000
Total liabilities and equities
$
1,295,000
On that day, Zambrano paid cash to acquire all of the assets and
liabilities of Soriano, which...
SafeData Corporation has the following account balances and respective fair values on June 30: Book Values...
SafeData Corporation has the following account balances and
respective fair values on June 30:
Book Values
Fair Values
Receivables
$
106,000
$
106,000
Patented technology
192,000
192,000
Customer relationships
0
484,000
In-process research and development
0
324,000
Liabilities
(472,000
)
(472,000
)
Common stock
(100,000
)
Additional paid-in capital
(300,000
)
Retained earnings deficit, 1/1
676,000
Revenues
(410,000
)
Expenses
308,000
Privacy First, Inc., obtained all of the outstanding shares of
SafeData on June 30 by issuing 20,000 shares of...
SafeData Corporation has the following account balances and respective fair values on June 30: Book Values...
SafeData Corporation has the following account balances and
respective fair values on June 30:
Book Values
Fair Values
Receivables
$
103,500
$
103,500
Patented technology
109,000
109,000
Customer relationships
0
670,000
In-process research and
development
0
338,000
Liabilities
(578,000
)
(578,000
)
Common stock
(100,000
)
Additional paid-in capital
(300,000
)
Retained earnings deficit,
1/1
853,500
Revenues
(340,000
)
Expenses
252,000
Privacy First, Inc., obtained all of the outstanding shares of
SafeData on June 30 by issuing 20,000 shares of...
SafeData Corporation has the following account balances and respective fair values on June 30: Book Values...
SafeData Corporation has the following account balances and
respective fair values on June 30:
Book Values
Fair Values
Receivables
$
108,000
$
108,000
Patented technology
123,000
123,000
Customer relationships
0
840,000
In-process research and development
0
524,000
Liabilities
(596,000
)
(596,000
)
Common stock
(100,000
)
Additional paid-in capital
(300,000
)
Retained earnings deficit, 1/1
847,400
Revenues
(312,000
)
Expenses
229,600
Privacy First, Inc., obtained all of the outstanding shares of
SafeData on June 30 by issuing 20,000 shares of...
On May 1, Donovan Company reported the following account balances: Current assets $ 90,000 Buildings &...
On May 1, Donovan Company reported the following account
balances:
Current assets
$
90,000
Buildings & equipment (net)
220,000
Total assets
$
310,000
Liabilities
$
60,000
Common stock
150,000
Retained earnings
100,000
Total liabilities and equities
$
310,000
On May 1, Beasley paid $400,000 in stock (fair value) for all of
the assets and liabilities of Donovan, which will cease to exist as
a separate entity. In connection with the merger, Beasley incurred
$15,000 in accounts payable for legal and...
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