a. If Osorio retains a separate corporate existence, what amount was recorded as the investment in Osorio?

b. What is the amount of goodwill arising from this acquisition?

c. compute the amount of consolidated inventories at the date of acquisition.

d. compute the amount of consolidated buildings (net) at the date of acquisition

e. compute the amount of consolidated land at date of acquisition

f. compute the amount of consolidated common stock at date of acquisition

g. compute the amount of consolidated additional paid-in capital at date of acquisition

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On January 1, 2018, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To acquire these shares, Moody issued $400 in long-term liabilities and also issued 40 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Moody paid $20 to lawyers, accountants, and brokers for assistance in bringing about this acquisition. Another $15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Cash Receivables Inventories Land Buildings (net) Equipment (net) Accounts payable. Long-term liabilities. Common stock ($1 par) Common stock ($20 par) Additional paid-in capital Retained earnings Note: Parentheses indicate a credit balance. Moody $ 180 810 1,080 600 1,260 480 (450) (1,290) (330) (1,080) (1,260) Osorio $ 40 180 280 360 440 100 (80) (400) (240) (340) (340) In Moody s appraisal of Osorio, three assets were deemed to be undervalued on the subsidiary s books: Inventory by $10, Land by $40, and Buildings by $60. On January 1, 2018, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To acquire these shares, Moody issued $400 in long-term liabilities and also issued 40 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Moody paid $20 to lawyers, accountants, and brokers for assistance in bringing about this acquisition. Another $15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Cash Receivables Inventories Land Buildings (net) Equipment (net) Accounts payable. Long-term liabilities. Common stock ($1 par) Common stock ($20 par) Additional paid-in capital Retained earnings Note: Parentheses indicate a credit balance. Moody $ 180 810 1,080 600 1,260 480 (450) (1,290) (330) (1,080) (1,260) Osorio $ 40 180 280 360 440 100 (80) (400) (240) (340) (340) In Moody s appraisal of Osorio, three assets were deemed to be undervalued on the subsidiary s books: Inventory by $10, Land by $40, and Buildings by $60.

Answer rating: 100% (QA)

Ques a Goodwill This is gain on bargain purchase Nil Work... View the full answer