Reimers Company acquires Rollins Corporation on January 1, 2014. As part of the agreement, the parent states that an additional $100,000 payment to the former owners of Rollins will be made in 2016, if Rollins achieves certain income thresholds during the first two years following the acquisition. How should Reimers account for this contingency in its 2014 consolidated financial statements?
Answer to relevant QuestionsMultiple Choice Questions1. Paar Corporation bought 100 percent of Kimmel, Inc., on January 1, 2012. On that date, Paar’s equipment (10-year remaining life) has a book value of $420,000 but a fair value of $520,000. Kimmel ...On January 3, 2013, Persoff Corporation acquired all of the outstanding voting stock of Sea Cliff, Inc. in exchange for $6,000,000 in cash. Persoff elected to exercise control over Sea Cliff as a wholly owned subsidiary with ...In 2012 Microsoft Corporation reported a $6.2 billion goodwill impairment loss. Referring to Microsoft’s 2012 financial statements, address the following:1. Microsoft’s segments serve as its reporting units for assessing ...On January 1, 2015, Johnsonville Enterprises acquired 80 percent of Stayer Company’s outstanding common shares in exchange for $3,000,000 cash. The price paid for the 80 percent ownership interest was proportionately ...On January 1, 2014, Allan Company bought a 15 percent interest in Sysinger Company. The acquisition price of $184,500 reflected an assessment that all of Sysinger’s accounts were fairly valued within the company’s ...
Post your question