Question: Assume that Company R acquired as a long term investment
Assume that Company R acquired, as a long- term investment, 30% of the out-standing voting common shares of Company S at a cash cost of $ 100,000. At the date of acquisition, Company S reported net assets and total shareholders’ equity of $ 250,000. The fair value of the depreciable assets of Company S was $ 20,000 greater than their net book value at the date of R’s acquisition. Compute goodwill purchased, if any.
Answer to relevant QuestionsAssume the same facts as in Q11- 16. Net assets that were undervalued at acqui-sition have a remaining estimated life of 10 years ( assume no residual value and straight- line depreciation). There is no goodwill impairment. ...Northern Energy Limited ( NEL) is a large Canadian private company organized in three operating segments: propane operations, trucking, and mineral explorations. Financial statements have not been audited, and NEL has simply ...The following investments are held by investors that are public companies: a. A $ 5,000,000 5% publicly traded 10- year bond of Tree Limited. The bonds are held for short- term capital appreciation, as the investor is ...Ber-trum Limited purchased $ 1,000,000 of Fox Corp. 6.2% bonds, classified as an AC investment. The bonds pay semi- annual interest each 1 May and 1 November. The market interest rate was 6% on the date of purchase. The ...Equity Method: Premium Investments Ltd. bought 40% of the outstanding com-mon shares of Trans- BC Operations Ltd. in early 20X5 for $ 598,000. Premium Investments has significant influence. On this date, Trans- BC Operations ...
Post your question