Pam Company acquires the net assets of Jam Company for an agreed-upon price of $900,000 on July
Question:
Pam Company acquires the net assets of Jam Company for an agreed-upon price of $900,000 on July 1, 2011. The value is tentatively assigned as follows:
Current assets .............. $ 100,000
Land ................... 50,000
Equipment ................ 200,000 (5-year life)
Building ................. 500,000 (20-year life)
Current liabilities ............ (150,000)
Goodwill ................ 200,000
Values are subject to change during the measurement period. Depreciation is taken to the nearest month. The measurement period expires on July 1, 2012, at which time the fair values of the equipment and building as of the acquisition date are revised to $180,000 and $550,000, respectively.
At the end of 2012, what adjustments are needed for the financial statements for the period ending December 31, 2011 and 2012?
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng