Question: Please help answer the following questions. FB Corp. prepares its financial statements in accordance with IFRS. FB acquired 100% of the outstanding common stock of
Please help answer the following questions.

FB Corp. prepares its financial statements in accordance with IFRS. FB acquired 100% of the outstanding common stock of Skarlet, Inc., for $5,500,000. The purchase price included $300,000 to reimburse the former shareholders of Skarlet for legal fees incurred to complete the acquisition. The company also agreed to pay the seller an additional $1,500,000 if Skarlet generated $5,000,000 in net earnings during the first 2 years after acquisition. At the acquisition date, the fair value of the contingent consideration was $750,000. For each of the acquisition items, enter the amount that should be reflected in the line item on FB's consolidated financial statements as of the acquisition date. Enter debit balances as positive values and credit balances as negative values. If an item is not included in any line item, enter zeros in each cell of the associated row. Carrying Acquisition Amount at Fair Value at | Profit Other Total Assets, Item Acquisition Acquisition or Comprehensive Excluding Total Date Date Loss Income Goodwill Liabilities 1. Property, plant, and $4,000,000 $4,200,000 equipment 2. In-process R&D costs 1,320,00 3. Legal fees 300,00 300,00 4. Noncompete agreement 550,000 5. Bonds payable 475,000 450,000 6. Estimated post-acquisition restructuring O 265,000 costs 7. Contingent consideration O 750,00 Total In the cell below, enter the amount of goodwill recorded as of the acquisition date. Enter the amount as a positive value. 8. Goodwill Please note: the accounting treatment for this transaction is the same under U.S. GAAP and IFRS
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
