On January 1, Coldwater Company has a net book value of $1,639,000 as follows:2,350 shares of preferred stock; par value $100 per share; cumulative,nonparticipating, nonvoting; call value $108 per share21,000 shares of common stock; par value $40 per shareRetained earningsTotal235,000840,000564,000$ 1,639,000$Westmont Company acquires all outstanding preferred shares for $252,600 and 60 percent of the common stock for $898,080. The acquisition-date fair value of thenoncontrolling interest in Coldwater's common stock was $598,720. Westmont believed that one of Coldwater's buildings, with a 12-year remaining life, was undervalued by$60,600 on the company's financial records.What amount of consolidated goodwill would be recognized from this acquisition? What amount of consolidated goodwill would be recognized from this acquisition?Multiple ChoiceO$49,800.O $46,200.о$43,800.O $45,000.

Goodwill is an intangible asset reported on the balance sheet of the entity. It indicates the…

Answered: On January 1, Coldwater Company has a…

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter8: Investing Activities

Section: Chapter Questions

Problem 2CIC

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After the business combination on the basis of full-goodwill approach, what amount of goodwill will be reported? a. P 0 b. P28,000 c. P40,000 d. P52,000
Compute the amount of acquired Goodwill, including contingent earnings and bargain purchase Assume that you are charged with assigning fair values related to a $3,800,000 acquisition. You determine that the fair value of the net identifiable tangible assets is $1,850,000. You also conclude that the purchase included a Customer List with a fair value at $340,000. a. How much Goodwill will you record in this acquisition? $ 1,610,000 ✓ b. Continuing from part (a), now also assume that the purchase and sale agreement requires the payment of an additional $925,000 if the subsidiary achieves a certain level of earnings. You estimate the fair value of that contingent earnings clause in the agreement to be $220,000. How does this additional information affect your computation of Goodwill? The amount of Goodwill recorded is $ 1,830,000 c. This part of the exercise is independent parts (a) and (b). Assume that the purchase price is $3,800,000 and that fair value of the net identifiable tangible…
P Company wishes to acquire S Co. for cash in an asset acquisition, and appraisals reveal that the inventory has a fair value $185,000, and the equipment has a current value of $645,000. The book value and fair value of liabilities are the same. The following balance sheets were reported on January 1, 2011, for P Company and S Company: P Co. $ 150,000 Sco. $ 30,000 Cash Inventory Equipment (net) 450,000 150,000 570,000 $750,000 1,320,000 Total $1,920,000 $ 450,000 $150,000 Total liabilities Common stock, $20 par value Other contributed capital Retained earnings 600,000 300,000 375,000 105,000 495,000 195,000 $1,920,000 $750,000 Total
Calculate the goodwill from the business combination. A. P10,000,000 C. P10,040,000 B. P10,025,000 D. P10,060,000
After the business combination on the basis of full-goodwill approach, what amount of liabilities will be reported? a. P265,000 b. P436,500 c. P622,000 d. P701,500
Calculate the total goodwill for a pro forma balance sheet given the following details. Details: Equity purchase price: $2,000 Book value: $1,700 Existing goodwill: $100 A. $100 B. $300 C. $200 D. $400
(1) Goodwill Calculation: Goodwill is the excess of the purchase consideration transferred over the fair value of the identifiable net assets acquired. Goodwill = Purchase Consideration - Fair Value of Identifiable Net Assets Purchase Consideration = Fair value of Black's investment + Fair value of non- controlling interest Purchase Consideration (21,000,000 + 21,000) + 11,800,000 Identifiable Net Assets = (40,000 + 3,890 +6,280 +2,570) (2,480 + 10,000) Goodwill (21,021,000) + 11,800,000-(52,740) Goodwill = 32,768, 260-52,740 Goodwill = 32,715, 520 Explanation: Goodwill arising on the acquisition of white is RM 32, 715,520 Can you do it in a debit credit format?
After the business combination on the basis of full-goodwill approach, what amount of total assets will be reported? (Use only the given information) a. P1,081,000 b. P1,121,000 c. P1,196,500 d. P1,231,500
How much is the cost of the qualifying asset on initial recognition? * 15,045,000 13,010,000 14,970,900 14,920,000
6. Tulip Company purchased the net assets of another entity for P2,000,000. On the sate of the transaction, the acquire had P800,000 of liabilities The assets of the acquiree at fair value were $1,900,000 for current assets and P1,600,000 for noncurrent assets. What is the amount of gain on bargain purchase? a. P 700,000 b. P-700,000 c. P 800,000 d. P-800,000
Firm A acquires firm B when firm B has a book value of assets of $315 million and a book value of liabilities of $115 million. Firm A actually pays $335 million for firm B. This purchase would result in goodwill for firm A equal to. Multiple Choice $335 million O $315 million $200 million $135 million
If the company's assets in TL: cash 100.000, accounts receivable 50.000, inventory 150.000, and building 200.000 (market value 300.000) and the liabilities 300.000. If the price paid to acquire company 400.000 TL, how much is the goodwill under market value approach? Select one: a. 100.000 b. 300.000 c. 200.000 d. 150.000

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