Q1 Question 2 (6 points) On 1/1/2023 Hatch Inc. acquired 100% assets of Stewart Com and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Q1 Question 2 (6 points) On 1/1/2023 Hatch Inc. acquired 100% assets of Stewart Com and paid $500,000 cash Below includes the information of assets and liabilities of Stewart Com right before the acquisition time: Book value Q2 Accounts receivable Inventory Equipment Land Current liabilities Mortgage payable Others - brand-name copyrights Answers Required: a) (1.5 points). Compute the goodwill or gain from acquisition by Hatch Inc. as of 1/1/2023? Show your calculations b) (2 points). Record the acquisition made by Hatch Inc. as of 1/1/2023 c) (1.5 point). What are the changes in total assets, liabilities and equity of Hatch Inc. after the acquisition as of 1/1/2023? Show your calculations. a) Value Analysis Total Price Paid Total Fair Value of Net Assets d) (1 point). On 4/1/2023 (3 months after the acquisition which is still in the measurement period), the firm determined that the actual market value of the Land on 1/1/2023 should be $75,000, instead. What is the adjusting entry to adjust for the land? Total Fair Value of Net Assets Goodwill Gain on Purchase of Business b) Entry recorded by the buyer Account Name Chek totals: c) Compute changes in A, L, and E of the acquirer *Changes in assets Total increase Total decrease Net change in assets *Changes in liabilities 300,000 370,000 200,000 70,000 100.000 300,000 0 Total increase Total decrease Net change in liabilities * Change in equity = change in assets - change in liabilities d-Adjusting entry Debit Market value Notes 295,000 370,000 180,000 80,000 As of 1/1/2023 the fair market value of the land is a provisional value, as the information about the 100,000 300,000 20,000 Increase in assets Credit Decrease in assets decrease in liabilities increase in liabilities Q1 Fall 2023 - ACCT 441 Question 1 (5 points) Q2 On 1/1/2023 Le Company acquired 100% assets of Chi Company by paying $300,000 cash and issuing 60,000 common stocks with the par of $1 and the fair market value of a stock of $20 Below includes information of the acquired firm just before the acquisition Items Book value Market value Accounts Receivable Inventory Land Buildings (net) Equipment (net) Customer list Current liabilities Other Long-term debts Bonds payable Answers: a) Value Analysis Total Price Paid Total Fair Value of Net Assets Total Fair Value of Net Assets Required: (please work on the excel sheet given to you) a) (1.5 points). Calculate fair value of net assets of Chi at the acquisition date? Calculate goodwill recorded by Le Company? Show your calculations. b) (2 points). Record the acquisition made by Le Company c) (1.5 point). What are the changes in total assets, liabilities and equity of Le Company after the acquisition? Show your calculations. Goodwill Gain on Purchase of Business b) Entry recorded by the acquirer Account Name Check totals Total increase Total decrease Net change in assets *Changes in liabilities Total increase Total decrease Net change in liabilities 310.000 250,000 530,000 420,000 410,000 0 Debit 300,000 200,000 500,000 c) Compute changes in A, L, and E of the acquirer *Changes in assets Increase in assets Total increase in equity 1,500,000 decrease in liabilities. * Change in equity = change in assets - change in liabilities Or you can compute directly: 0 300.000 270,000 580,000 500,000 400,000 10.000 300,000 200.000 510,000 Credit Decrease in assets 0 increase in liabilities Notes: Total FV of assets Total FV of liabilities FV of Net Assets Q1 Question 2 (6 points) On 1/1/2023 Hatch Inc. acquired 100% assets of Stewart Com and paid $500,000 cash Below includes the information of assets and liabilities of Stewart Com right before the acquisition time: Book value Q2 Accounts receivable Inventory Equipment Land Current liabilities Mortgage payable Others - brand-name copyrights Answers Required: a) (1.5 points). Compute the goodwill or gain from acquisition by Hatch Inc. as of 1/1/2023? Show your calculations b) (2 points). Record the acquisition made by Hatch Inc. as of 1/1/2023 c) (1.5 point). What are the changes in total assets, liabilities and equity of Hatch Inc. after the acquisition as of 1/1/2023? Show your calculations. a) Value Analysis Total Price Paid Total Fair Value of Net Assets d) (1 point). On 4/1/2023 (3 months after the acquisition which is still in the measurement period), the firm determined that the actual market value of the Land on 1/1/2023 should be $75,000, instead. What is the adjusting entry to adjust for the land? Total Fair Value of Net Assets Goodwill Gain on Purchase of Business b) Entry recorded by the buyer Account Name Chek totals: c) Compute changes in A, L, and E of the acquirer *Changes in assets Total increase Total decrease Net change in assets *Changes in liabilities 300,000 370,000 200,000 70,000 100.000 300,000 0 Total increase Total decrease Net change in liabilities * Change in equity = change in assets - change in liabilities d-Adjusting entry Debit Market value Notes 295,000 370,000 180,000 80,000 As of 1/1/2023 the fair market value of the land is a provisional value, as the information about the 100,000 300,000 20,000 Increase in assets Credit Decrease in assets decrease in liabilities increase in liabilities Q1 Fall 2023 - ACCT 441 Question 1 (5 points) Q2 On 1/1/2023 Le Company acquired 100% assets of Chi Company by paying $300,000 cash and issuing 60,000 common stocks with the par of $1 and the fair market value of a stock of $20 Below includes information of the acquired firm just before the acquisition Items Book value Market value Accounts Receivable Inventory Land Buildings (net) Equipment (net) Customer list Current liabilities Other Long-term debts Bonds payable Answers: a) Value Analysis Total Price Paid Total Fair Value of Net Assets Total Fair Value of Net Assets Required: (please work on the excel sheet given to you) a) (1.5 points). Calculate fair value of net assets of Chi at the acquisition date? Calculate goodwill recorded by Le Company? Show your calculations. b) (2 points). Record the acquisition made by Le Company c) (1.5 point). What are the changes in total assets, liabilities and equity of Le Company after the acquisition? Show your calculations. Goodwill Gain on Purchase of Business b) Entry recorded by the acquirer Account Name Check totals Total increase Total decrease Net change in assets *Changes in liabilities Total increase Total decrease Net change in liabilities 310.000 250,000 530,000 420,000 410,000 0 Debit 300,000 200,000 500,000 c) Compute changes in A, L, and E of the acquirer *Changes in assets Increase in assets Total increase in equity 1,500,000 decrease in liabilities. * Change in equity = change in assets - change in liabilities Or you can compute directly: 0 300.000 270,000 580,000 500,000 400,000 10.000 300,000 200.000 510,000 Credit Decrease in assets 0 increase in liabilities Notes: Total FV of assets Total FV of liabilities FV of Net Assets
Expert Answer:
Answer rating: 100% (QA)
Okay lets work through this stepbystep a Calculation of Fair Value of Net Assets and Goodwill Land 3... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these accounting questions
-
Payroll entries Widmer Company had gross wages of $174,000 during the week ended June 17. The amount of wages subject to social security tax was $156,600, while the amount of wages subject to federal...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
As a newly qualified auditor, you are asked to perform an audit of an Islamic digital bank. The Islamic Digital Bank are specialised and many of its financial services contract are linked to the...
-
Record your responses on the spreadsheet template. 2014 February 1 - Brady and Manning decide to start up a partnership. Brady brings in $10 000 cash and equipment costing $60 000, with $17 000 in...
-
Explain how the deity Horus became the king of Egypt and Osiris became king of the underworld.
-
Water ( = 62.4 lbm/ft 3 ) flows from the large orifice at the bottom of the tank as shown. Assume that the flow is irrotational. Point B is at zero elevation, and point A is at 1 ft elevation. If V A...
-
Compare and contrast the following two statements. Are they concerned with achieving eco-efficiency, eco-effectiveness or both? 1 Businesses should sack the unproductive kilowatt-hours, tonnes and...
-
The European Division of Worldwide Reference Corporation produces a pocket dictionary containing popular phrases in six European languages. Annual budget data for the coming year follow. Projected...
-
Write a 5-paragraph summary in the following format IM RAD - Each paragraph should be labeled with an appropriate level heading, summarize the salient points and should be at least three to five...
-
Huey and Dunham (1987) measured the running speed of fence lizards, Sceloporus merriami, in Big Bend National Park in Texas. Individual lizards were captured and placed in a 2.3-meter raceway, where...
-
Happy Chicks is a commercial poultry farm situated in the south of England, which rears day-old White Leghorn chicks for egg farmers. The chicks are reared in large free-range barns until the age of...
-
Felix & Company reports the following information. Period 1 Units Produced Total Costs 0 $ 2,020 2 200 2,520 400 3,029 600 3,520 5 800 4,020 6 1,000 4,520 1,200 5,020 1,400 5,520 9 1,600 6,020 10...
-
Explain how the pizza hut influenced sri Lankan customers using the model of buying behavior in sri Lankan market?
-
Consideration is being given to the best option for vaccination against Hepatitis B for diabetic patients. The current standard intervention is three-dose vaccination with Engerix-B. An alternative...
-
10. What is the midpoint between the two points P(x, y) = (-5, 5) and Q(x, y) = (5,-5)?
-
Show how you can generate 6 timing signals in three ways 1) Flip-flops only 2) Flip-flops and AND gates 3) Counter and decoder
-
The following data are available relating to overheads in two production cost centres: Cost centre B K76,910,000 Budget Actual Absorbed ABCD Cost centre A K54,030,000 K54,960,000 D ?...
-
10m solution. If Ka(HA) = 10 then pOH of solution will be [Given : log4=0.6] (A) 6.7 (B) Greater than 6.7 & less than 7.0 (C) Greater 7.0 & less than 7.3 (D) Greater than 7.3
-
Mary paid $2,000 of state income taxes in 2012. The total sales tax she paid during 2012 was $5,500, which included $3,000 for the cost of a new car. How should Mary treat the taxes paid on her 2012...
-
Sally and Charles Heck received the following dividends and interest during 2012: Assuming the Hecks file a joint tax return, complete Schedule B of Form 1040 (on page 2-33) for them for the 2012 tax...
-
Mike purchases a heavy-duty truck (5-year class recovery property) for his delivery service on April 30, 2012. The truck is not considered a passenger automobile for purposes of the listed property...
-
What assumptions are made in finding the natural frequency of a single-degree-offreedom system using the energy method?
-
Is hysteresis damping a function of the maximum stress?
-
What is critical damping, and what is its importance?
Study smarter with the SolutionInn App