Question

Brass Corporation agrees to acquire the net assets of Warn Corporation on January 1, 2011. Warn has the following balance sheet on the date of acquisition:
An appraiser determines that in-process R&D exists and has an estimated value of $14,000. The appraisal indicates that the following assets have fair values that differ from their book values:
Fair Value
Inventory ............. $120,000
Equipment ........... 340,000
Trademark ........... 30,000
Required
Use value analysis to prepare the entry on the books of Brass Corporation to acquire the net assets of Warn Corporation under each of the following purchase price scenarios:
1. Purchase price is $550,000.
2. Purchase price is $350,000.


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  • CreatedApril 10, 2015
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