In a pre-2009 business combination, Acme Company acquired all of Brem Company’s assets and liabilities for...

In a pre-2009 business combination, Acme Company acquired all of Brem Company’s assets and liabilities for cash. After the combination, Acme formally dissolved Brem. At the acquisition date, the following book and fair values were available for the Brem Company accounts:

	Book Values		Fair Values
Current assets	$	88,200	$	88,200
Equipment		131,000		198,000
Trademark		0		352,000
Liabilities		(74,200)		(74,200)
Common stock		(100,000)
Retained earnings		(45,000)

In addition, Acme paid an investment bank $30,900 cash for assistance in arranging the combination.

Using the legacy purchase method for pre-2009 business combinations, prepare Acme’s entry to record its acquisition of Brem in its accounting records assuming the following cash amounts of $651,900 and $446,300 were paid to the former owners of Brem.
How would these journal entries change if the acquisition occurred post-2009 and therefore Acme applied the acquisition method?

Solutions

Expert Solution

Solution:

Part (a) & (b) solved in seprate sheet.

Note: if you happy with this answer then give a thumsup. Thank you??

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

In a pre-2009 business combination, Acme Company acquired all of Brem Company’s assets and liabilities for...

In a pre-2009 business combination, Acme Company acquired all of Brem Company’s assets and liabilities for cash. After the combination Acme formally dissolved Brem. At the acquisition date, the following book and fair values were available for the Brem Company accounts: Book Values Fair Values Current assets $ 74,500 $ 74,500 Equipment 135,500 205,500 Trademark 0 397,000 Liabilities (65,000 ) (65,000 ) Common stock (100,000 ) Retained earnings (45,000 ) Note: Parentheses indicate a credit balance. In addition, Acme paid...

Business Combination On 1 July 2020, Tall Ltd acquired all of the assets and liabilities of...

Business Combination On 1 July 2020, Tall Ltd acquired all of the assets and liabilities of Blacks Ltd. In exchange for these assets and liabilities, Tall Ltd issued 100 000 shares that at date of issue had a fair value of $6.30 per share. Costs of issuing these shares amounted to $1000. Legal costs associated with the acquisition of Blacks Ltd amounted to $4200. The asset and liabilities of Blacks Ltd at 1 July 2020 were as follows: Carrying...

how to recognize and measure identifiable assets acquired and liabilities assumed in business combination ? Explain...

how to recognize and measure identifiable assets acquired and liabilities assumed in business combination ? Explain in around 1500 words

When acquiring a business, typically all of the assets and liabilities will be acquired, even those...

When acquiring a business, typically all of the assets and liabilities will be acquired, even those off-balance sheets. Consider operating leases. This is a legal liability that currently is not reflected on a balance sheet. How is this accounted for upon acquisition and for consolidation? Consider ASC Codification 805-20 through 25 in your response. Use citations as appropriate.

Business combinations Silver Ltd acquired all the assets and liabilities of Jackman Ltd on 30 September...

Business combinations Silver Ltd acquired all the assets and liabilities of Jackman Ltd on 30 September 2019. At the start of negotiations, Silver Ltd owned 30% of the shares of Jackman Ltd. The current discussions between the two entities concerned Silver Ltd’s acquisition of the remaining 70% of shares of Jackman Ltd. The negotiations began on 1 January 2019 and enough shareholders in Jackman Ltd agreed to the deal by 30 September 2019. The purchase agreement was for shareholders in...

Current practice requires that the assets acquired in a business combination be measured at fair value...

Current practice requires that the assets acquired in a business combination be measured at fair value as defined by SFAS No. 157 (see FASB ASC 820-10). Side 1: Argue that the acquiring company should measure the acquired company's plant assets that it plans to use in int operations in accordance with the requirements of SFAS No. 141 before its revisions. Side 2: Argue that the acquiring company should measure the acquired company's plant assets that it plans to use in...

On January 1, 20X2, Prost Company acquired all of SKK Corporation’s assets and liabilities by issuing...

On January 1, 20X2, Prost Company acquired all of SKK Corporation’s assets and liabilities by issuing 24,100 shares of its $6 par value common stock. At that date, Prost shares were selling at $24 per share. Historical cost and fair value balance sheet data for SKK at the time of acquisition were as follows: Balance Sheet Item Historical Cost Fair Value Cash & Receivables $ 24,000 $ 24,000 Inventory 106,000 111,000 Buildings & Equipment 605,000 450,000 Less: Accumulated Depreciation (231,000...

Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2015,...

Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2015, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts: Book Values Fair Values Current assets $ 41,500 $ 41,500 Building 108,000 67,000 Land 17,000 35,200 Trademark 0 31,800 Goodwill 19,000 ? Liabilities (50,500) (50,500) Common stock (100,000) Retained earnings (35,000) Prepare Allerton’s entry to record its acquisition of Deluxe...

Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2018,...

Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2018, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts: Book Values Fair Values Current assets $ 61,000 $ 61,000 Building 91,750 44,650 Land 31,000 45,700 Trademark 0 37,600 Goodwill 15,000 ? Liabilities (63,750 ) (63,750 ) Common stock (100,000 ) Retained earnings (35,000 ) 1&2. Prepare Allerton’s entry to record its...

Pretzel Company acquired the assets (except for cash) and assumed the liabilities of Salt Company on...

Pretzel Company acquired the assets (except for cash) and assumed the liabilities of Salt Company on January 2, 2020. As compensation, Pretzel Company gave 30,000 shares of its common stock, 15,000 shares of its 10% preferred stock, and cash of $50,000 to the stockholders of Salt Company. On the acquisition date, Pretzel Company stock had the following characteristics: PRETZEL COMPANY Stock Par Value Fair Value Common $ 10 $ 25 Preferred 100 100 Immediately prior to the acquisition, Salt Company's...

Subjects