On January 1, 2020, Beerbo paid $6,500,000 cash to purchase Forty-Niner Miner Co. (FNMC), a company...
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On January 1, 2020, Beerbo paid $6,500,000 cash to purchase Forty-Niner Miner Co. (FNMC), a company that has, among its many assets, a gold mine. The gold that Beerbo intends to extract from the mine will be used to produce Beerbo's limited-edition Gold Flaked Mead (which Beetbo plans to begin producing in fiscal year 2025). Details of Beerbo's purchase of FNMC are as follows: FNMC Book Value ($) Market Value ($) Cash 1,000 1,000 Supplies 1,500 Gold Mine 1,000,000 5,000,000 Patent 22,500 30,000 Notes Payable 25,000 31,000 The patent is expected to have a remaining life of 15 years. Beerbo expects to extract a total of 2,500 troy ounces of gold from the mine. Assume Beerbo has a December 31 fiscal year-end and has the following accounts appearing in its ledger: Gold Mine > Inventory - Gold > Patents > Amortization Expense - Patents 2.a.Goodwill hunting (LO 7.5) How much Goodwill will Beerbo record (if any) on January 1, 2020 as a result of its purchase of FNMC? Round to the nearest dollar. > Goodwill: 2.b.Go for gold (LO 7.5) Assume Beerbo extracts 750 troy ounces in 2020 and 1,500 troy ounces in 2021. Determine the value Beerbo would report on its fiscal year-end 2021 balance sheet for the items below. Round to the nearest dollar. Inventory - Gold: $ Gold Mine: 2.c. You can't touch this (LO 7.5) Assume Beerbo records all depreciation and amortization at the end of each fiscal year. Write out the December 31, 2020 journal entry for the amortization of the newly acquired patent. On January 1, 2020, Beerbo paid $6,500,000 cash to purchase Forty-Niner Miner Co. (FNMC), a company that has, among its many assets, a gold mine. The gold that Beerbo intends to extract from the mine will be used to produce Beerbo's limited-edition Gold Flaked Mead (which Beetbo plans to begin producing in fiscal year 2025). Details of Beerbo's purchase of FNMC are as follows: FNMC Book Value ($) Market Value ($) Cash 1,000 1,000 Supplies 1,500 Gold Mine 1,000,000 5,000,000 Patent 22,500 30,000 Notes Payable 25,000 31,000 The patent is expected to have a remaining life of 15 years. Beerbo expects to extract a total of 2,500 troy ounces of gold from the mine. Assume Beerbo has a December 31 fiscal year-end and has the following accounts appearing in its ledger: Gold Mine > Inventory - Gold > Patents > Amortization Expense - Patents 2.a.Goodwill hunting (LO 7.5) How much Goodwill will Beerbo record (if any) on January 1, 2020 as a result of its purchase of FNMC? Round to the nearest dollar. > Goodwill: 2.b.Go for gold (LO 7.5) Assume Beerbo extracts 750 troy ounces in 2020 and 1,500 troy ounces in 2021. Determine the value Beerbo would report on its fiscal year-end 2021 balance sheet for the items below. Round to the nearest dollar. Inventory - Gold: $ Gold Mine: 2.c. You can't touch this (LO 7.5) Assume Beerbo records all depreciation and amortization at the end of each fiscal year. Write out the December 31, 2020 journal entry for the amortization of the newly acquired patent.
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2 a Goodwill 1500000 Explanation Goodwill on acquisition consideration paid market value of net asse... View the full answer
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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