Fair market values for each of the securities owned by the company appear below: Security Fair value
Question:
Fair market values for each of the securities owned by the company appear below:
Security Fair value
Gershwin Company stock 25 $ /share
Sherwood Company stock 21 $
/share Disney Company stock 52 $ /share
Berlin Company stock 64 $ /share
Caterpillar, Inc. stock 36 $ /share
Tunick Company bonds 99% of par
Rodgers Company bonds 97% of par
Bock Company bonds 101% of par
Hammerstein Company bonds 98% of par
Hart Company bonds 103% of par
2) Future cash flow information and fair market values for intangible assets are as follows:
Franchise:
Expected future cash flows: 30,000 $
Fair value: 25,000 $
Patent:
Expected future cash flows: 70,000 $
Fair value: 60,000 $
Goodwill:
The Camden Equipment Division reports the following amounts on its balance sheet dated 12/31/x2:
Current Assets 150,000 $
Non‐current Assets 800,000
Current Liabilities 200,000
Non‐current Liabilities 350,000
The recorded amount of the net assets (excluding Goodwill) for the Camden Equipment Division is the same as fair value except for the following: ‐
‐ The fair value of equipment is 50,000 $ higher than its carrying value. ‐‐
The fair value of the patent is stated above: $ 60,000 [Hint: The difference between the carrying value and the fair value of the patent as of 12/31/x2 is also part of the determination of the fair value of the net identifiable assets at 12/31/x2.]
For the Camden Equipment Division , assume the fair value at 12/31/x2 is: 380,00
Question is : l) The balance sheet presentation for each of the following accounts on 12/31/x2:
i. Note Receivable "2"
ii. Note Payable "A"
iii. Bond Payable "A"
iv. Bond Payable "B"
v. Heavy Duty Equipmen
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren