In: Accounting
On December 31, 2009, Add-On Company acquired 100 percent of the common shares of Venus Corporation for $ 300,000. Information about the Venus balance just before the acquisition is given here:
Cash and Accounts Receivable...............$ 35,000
Inventory
.................................................$75,000
Land
........................................................$100,000,
Buildings and Equipment (net) ................$220,000
Total Assets .........................................$
430,000
Accounts Payable ....................................$ 65,000
Bonds Payable ................................... $150,000
Common Stock
.........................................$100,000
Retained earnings ...................................$115,000
Total Liabilities and Stockholders'Equity$
430,000
At the date of the business combination, the net assets and liabilities of Venus approximated fair value, except for the inventory, which had a fair value of $ 60,000, land that had a fair value of $ 125,000 and buildings and equipment (net). ) Of 250,000 dollars.
(1) How much inventory will be included in the consolidated balance
sheet immediately after the acquisition?
(2) What amount of goodwill will be included in the consolidated balance sheet immediately after the acquisition?
(3) What amount will be included as an investment in Venus Corporation in the consolidated balance sheet immediately after the acquisition?
Particulars |
Amount |
Fair value of net assets |
|
|
215,000 |
|
(-15,000) |
|
25,000 |
|
30,000 |
Non Controlling interest as fair value |
Nil |
Total (A) |
255,000 |
Fair value of purchase consideration (B) |
300,000 |
Goodwill (B-A) |
45,000 |
Goodwill will be recorded at USD 45,000