Doc Inc. acquired a new division, Metavision on Oct 20 th 2021. The fair market value for
Question:
Doc Inc. acquired a new division, Metavision on Oct 20th 2021. The fair market value for the assets and liabiltiies for Metavision on the date of acquisition is as follows:
Current assets | 140000 |
PPE (net) | 280000 |
Intangibles | 150000 |
Current liabilities | 190000 |
Long-term liabilities | 220000 |
Doc Inc. paid $200,000 for the acquisition of Metavision. 10% of this purchase price goes towards in-process R&D. Metavision becomes a fully owned reporting unit under Doc Inc.
On Dec 31st 2021, Doc Inc. prepares their financial statements. Assuming that Doc Inc. has not made any other acquisition, what is the amount of goodwill that Doc Inc. reports on their balance sheet (prior to any impairments)?
On Dec 31st 2021, the book value of Metavision’s net assets, including the goodwill, is $130,000. The fair market value of Metavision is $120,000. The fair market value of the net assets of the Metavision reporting unit is $90,000. Should Doc Inc. recognize goodwill impairment? If so, provide the journal entries for this goodwill impairment.
Expert Answer:
A B E F G 1 1 2 3 Google Inc acquires Metavision on 20Oct2021 4 5 Fair Market Value as on 20Oct2021 ... View the full answer
