Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Question
Chapter 1, Problem 1.11P
To determine
Business combination:
Business combination refers to the combining of one or more business organizations in a single entity. The business combination leads to the formation of combined financial statements. After business combination, the entities having separate control merges into one having control over all the assets and liabilities. Mergers and acquisitions are types of business combinations.
Direct financing lease:
The lessor acquires the assets for leasing so that the revenue can be made from the interest payments.
:
Records of the acquisition of Company N by Company S.
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M&A Journal entry
Company A acquires Company B on May 1, 2016. The following data includes measurements of assets, liabilities, and non-controlling interest as of the closing date.
Prepare the journal entries to record the assets acquired and liabilities assumed.
Adjusted Fair Value
Accounts Receivable
830
Contract assets
1,670
Inventories
1,020
Other current assets
500
Property, plant and equipment
1,220
Operating lease right-of-use assets
700
Goodwill
14,650
Other intangible assets
7,880
Other non-current assets
320
Total assets acquired
28790
Accounts payable
880
Contract liabilities
700
Other current liabilities
830
Operating lease liabilities
720
Defined benefit plans
1,300
Long-term debt, net
3,550
Other long-term liabilities
1,870
Total liabilities assumed
9,850
Net assets acquired
18,940
Noncontrolling interests
160
Total net consideration transferred
18,780
Action, Inc. acquired the following assets and assumed the related liabilities of Slacker Corp. in a
transaction completed on February 16, 2023:
Accounts receivable, net
Inventories
Property, plant & equipment
Non-amortizable intangible assets
Carrying value
for Slacker
Current liabilities
Noncurrent liabilities
$ 11,000
$ 50,000
$
100,000
$ 200,000
Fair Value
$ 10,000
$ 50,000
$ 150,000
$ 225,000
$ (40,000)
$(200,000)
$ (40,000)
$(200,000)
Action paid $205,000 in cash for all of the above from Slacker.
a) Determine if Action must record any goodwill. Show any calculations.
b) Record the acquisition in Action's general journal on Feb. 16, 2023. Show: any calculations.
c) Prepare any adjusting entry for amortization required as of the fiscal year end, December 31,
2023. If no amortization is required, explain why.
Machine P was acquired on April 1, 2019 in exchange for 400, 000 face amount of bonds payable selling at 94, and maturing on April 1,2029 . The accountant recorded acquisition by a debit to Machinery and a credit to Bonds Payable for 400, 000 Straight line Depreciation was recorded based on a 5-year economic life and amounted to 54,000 for nine months In the computation of depreciation , residual value of 40,000 was used. What is the initial carrying amount of the PPE? What is the carrying amount if the PPE as of December 31, 2020?
Chapter 1 Solutions
Advanced Accounting
Ch. 1 - Prob. 1UTICh. 1 - Prob. 3UTICh. 1 - Prob. 4UTICh. 1 - Prob. 5UTICh. 1 - Prob. 6UTICh. 1 - Prob. 7UTICh. 1 - Prob. 8UTICh. 1 - Prob. 9UTICh. 1 - Prob. 10UTICh. 1 - Prob. 1.1E
Ch. 1 - Prob. 1.2ECh. 1 - Prob. 1.3ECh. 1 - Prob. 2ECh. 1 - Prob. 5.1ECh. 1 - Prob. 5.2ECh. 1 - Prob. 6ECh. 1 - Lake craft Company has the following balance...Ch. 1 - Prob. 8.2ECh. 1 - Prob. 8.3ECh. 1 - Prob. 9.1ECh. 1 - Prob. 9.2ECh. 1 - Prob. 1A.1.1AECh. 1 - Prob. 1A.1.2AECh. 1 - Prob. 1.2PCh. 1 - Prob. 1.3.1PCh. 1 - Prob. 1.4PCh. 1 - Jack Company is a Corporation that was organized...Ch. 1 - Prob. 1.6PCh. 1 - Prob. 1.7.1PCh. 1 - Prob. 1.7.2PCh. 1 - Prob. 1.8PCh. 1 - Prob. 1.10.A1PCh. 1 - Prob. 1.11PCh. 1 - Prob. 1.12PCh. 1 - Prob. 1.13.2PCh. 1 - Prob. 1A.1.1APCh. 1 - Prob. 1A.1.2APCh. 1 - (Note: The use 01 a financial calculator or Excel...Ch. 1 - Frontier does not have publicly traded stock. You...Ch. 1 - Frontier does not have publicly traded stock. You...Ch. 1 - Prob. 1.1B.3CCh. 1 - Prob. 1.1CCCh. 1 - Prob. 1.2.1CCh. 1 - Prob. 1.2.2CCh. 1 - Case 1-2 Disney Acquires Marvel Entertainment On...
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