On December 31, 2015, Cola Company acquired all of the net identifiable assets of The Party...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On December 31, 2015, Cola Company acquired all of the net identifiable assets of The Party Place for $370,000 in cash. The book values and fair values of assets and liabilities belonging to The Party Place were as follows: a) Calculate the amount paid for goodwill, Please make sure your final answer(s) are accurate to the nearest whole number, The Party Place Balance Sheet Goodwill = $ December 31, 2015 b) Give the entry for Cola Company to record the purchase of The Party Place. Enter an appropriate description, and enter the date in the format dd/mmm (i.e., 15/Jan). Please make sure your final answer(s) are accurate to 2 decimal places. Book Value Fair Value Assets General Journal $20,000 40,000 $20,000 42,000 Date Page G1 PR Debit Credit Cash. Account/Explanation PR Debit Credit Accounts receivable, net, Inventory Building, net, 130,000 144,000 20,000 80,000 115,000 Patents, net. 19,000 Total assets $354,000 Liabilities and shareholders' equity Accounts payable, $32,000 $27,000 Shareholders' equity, 322,000 not applicable Total liabilities and shareholders' equity. $354,000 c) The goodwill identified in part a) and b) above forms part of a reporting or cash-generating unit (CGU) as a whole. On December 31, 2016, this CGU had the following net assets at the carrying values listed below: Carrying Value $130,000 Cash Accounts receivable, net Inventory Building, net Patents, net 110,000 80,000 110,000 16,000 Goodwill 90,000 Accounts payable 65,000 The account balances above have normal values. The fair value of the CGU on this date was $501,000. Management also detemined that its value in use was $501,000 and the costs to sell the CGU, should management choose to do so would be $15,000. Please make sure your final answer(s) are accurate to 2 decimal places. i) Determine if the CGU is impaired and complete the journal entry, if required. Assume that the company follows ASPE. General Jourmal Account/Explanation Page G1 PR Debit Credit Date ii) Determine if the CGU is impaired and complete the journal entry, if required. Assume that the company follows IFRS. General Journal Account/Explanation Page G1 PR Debit Credit Date d) Assume the same carrying values as listed in part c) above but assume now that the fair value of the CGU on this date was $437,000. Management also determined that its value in use was $437,000 and costs to sell the CGU, should management choose to do so would be $15,000. Please make sure your final answer(s) are accurate to 2 decimal places. i) Determine if the CGU is impaired and complete the journal entry, if required. Assume that the company follows ASPE. Page G1 PR Debit Credit General Joumal Date Account/Explanation ii) Determine if the CGU is impaired and complete the journal entry, if required. Assume that the company follows IFRS. General Joumal Account/Explanation Page G1 PR Debit Credit Date On December 31, 2015, Cola Company acquired all of the net identifiable assets of The Party Place for $370,000 in cash. The book values and fair values of assets and liabilities belonging to The Party Place were as follows: a) Calculate the amount paid for goodwill, Please make sure your final answer(s) are accurate to the nearest whole number, The Party Place Balance Sheet Goodwill = $ December 31, 2015 b) Give the entry for Cola Company to record the purchase of The Party Place. Enter an appropriate description, and enter the date in the format dd/mmm (i.e., 15/Jan). Please make sure your final answer(s) are accurate to 2 decimal places. Book Value Fair Value Assets General Journal $20,000 40,000 $20,000 42,000 Date Page G1 PR Debit Credit Cash. Account/Explanation PR Debit Credit Accounts receivable, net, Inventory Building, net, 130,000 144,000 20,000 80,000 115,000 Patents, net. 19,000 Total assets $354,000 Liabilities and shareholders' equity Accounts payable, $32,000 $27,000 Shareholders' equity, 322,000 not applicable Total liabilities and shareholders' equity. $354,000 c) The goodwill identified in part a) and b) above forms part of a reporting or cash-generating unit (CGU) as a whole. On December 31, 2016, this CGU had the following net assets at the carrying values listed below: Carrying Value $130,000 Cash Accounts receivable, net Inventory Building, net Patents, net 110,000 80,000 110,000 16,000 Goodwill 90,000 Accounts payable 65,000 The account balances above have normal values. The fair value of the CGU on this date was $501,000. Management also detemined that its value in use was $501,000 and the costs to sell the CGU, should management choose to do so would be $15,000. Please make sure your final answer(s) are accurate to 2 decimal places. i) Determine if the CGU is impaired and complete the journal entry, if required. Assume that the company follows ASPE. General Jourmal Account/Explanation Page G1 PR Debit Credit Date ii) Determine if the CGU is impaired and complete the journal entry, if required. Assume that the company follows IFRS. General Journal Account/Explanation Page G1 PR Debit Credit Date d) Assume the same carrying values as listed in part c) above but assume now that the fair value of the CGU on this date was $437,000. Management also determined that its value in use was $437,000 and costs to sell the CGU, should management choose to do so would be $15,000. Please make sure your final answer(s) are accurate to 2 decimal places. i) Determine if the CGU is impaired and complete the journal entry, if required. Assume that the company follows ASPE. Page G1 PR Debit Credit General Joumal Date Account/Explanation ii) Determine if the CGU is impaired and complete the journal entry, if required. Assume that the company follows IFRS. General Joumal Account/Explanation Page G1 PR Debit Credit Date
Expert Answer:
Answer rating: 100% (QA)
A Amount paid for Goodwill Purchase consideration Fair value of net identifiable assets Purchase con... View the full answer
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
Students also viewed these accounting questions
-
Explain the significance of understanding the internal organisation in context of its general and industry environments.n
-
14) Find the local max/local min and/or global max/min values of the function on the given interval. a) f(x) 3x - 4 x2 + 1 * [-2, 2] b) f(x) = x + sin(2x), [0, ]
-
On December 31, 2016, Mason Company made the following proper year-end adjusting entries: PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 Adjusting Entries 2 Dec. 31 Bad Debts...
-
Approximately 8.33% of men are colorblind. You survey men from a large population until you find one who is colorblind. a. Explain in words what X is in this situation and what values it can take. b....
-
Why are published cases predominantly from appellate courts?
-
How can the \(Q\)-point be stabilized against variations in transistor parameters?
-
Why is it sometimes necessary to serve a subpoena for production of documents?
-
Five years ago, Kennedy Trucking Company was considering the purchase of 60 new diesel trucks that were 15 percent more fuel-efficient than the ones the firm is now using. Mr. Hoffman, the president,...
-
Which of the triple constraints do you think is the most important for the project of implementing an enterprise hiring system for MTC ? You should address it from a project - perspective, not the...
-
Required: Nancy, who is 59 years old, is the beneficiary of a $220,000 life insurance policy. What amount of the insurance proceeds is taxable under each of the following scenarios? (Do not round any...
-
8. What will be the output of the following Java program? 1. 2. 3. 4. 5. 195 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. class exception_handling { } public static void main(String...
-
Two teams are competing in a tug-of-war in which the winner must pull the losing team 4.0 m towards them. The mass of the team on the right is 444 kg and the team pulls with a net force of 7420 N....
-
Compare and contrast traditional hierarchical management structures with newer, flatter organizational structures in the context of business management systems.
-
Compare and contrast strategies for sustainable effectiveness to sustainable competitive advantages. Discuss the following: What is meant by sustainable work systems , and how do they differ from...
-
Most materials tend to either lose electrons or gain electrons when rubbed. For example, rabbit fur tends to lose electrons when rubbed, while an acrylic (plastic) rod tends to gain electrons.The...
-
A student who conducted this experiment suggested that the temperature of the copper-water mix raised more than it should have because some water clung to the copper when it was transferred from the...
-
Let us consider the two following Treasury bonds whose characteristics are the following: Maturity (years) Coupon rate (%) Price Name Bond 1 6 Bond 2 20 5 0 100 31.18 Your investment horizon is 6...
-
Chicago Company sold merchandise to a customer for $1,500 cash in a state with a 6% sales tax rate. The total amount of cash collected from the customer was $558. $600. $642. $636. Nevada Company...
-
What are some forms of off-balance-sheet financing?
-
Discuss the similarities and the differences between convertible debt and debt issued with stock warrants.
-
What payments are included in the lease liability?
-
The slender bar \(A B\) weighs \(60 \mathrm{lb}\) and moves in the vertical plane, with its ends constrained to follow the smooth horizontal and vertical guides. If the 30-lb force is applied at...
-
A car door is inadvertently left slightly open when the brakes are applied to give the car a constant rearward acceleration \(a\). Derive expressions for the angular velocity of the door as it swings...
-
The wheel rolls up the incline on its hubs without slipping and is pulled by the \(100-\mathrm{N}\) force applied to the cord wrapped around its outer rim. If the wheel starts from rest, compute its...
Study smarter with the SolutionInn App