Painted Desert has acquired several companies. Assume that Painted Desert purchased Oak Tree Unlimited for $14,000,000 cash. The book value of Oak Tree Unlimited's assets is $14,000,000 (fair value, $15,000,000), and it has liabilities of $13,000,000 (fair value, $13,000,000). Requirements 1. Compute the cost of goodwill purchased by Painted Desert. 2. Record the purchase of Oak Tree Unlimited by Painted Desert. Requirement 1. Compute the cost of goodwill purchased by Painted Desert. Purchase price to acquire Oak Tree Unlimited Fair value of Oak Tree Unlimited's assets Less: Fair value of Oak Tree Unlimited's liabilities Less: Fair value of Oak Tree Unlimited's net assets Goodwill Requirement 2. Record the purchase of Oak Tree Unlimited by Painted Desert. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit d&disableStandbyIndicator=true&assignmentHandlesLocale=true&enablelesSession=True&iesClientUrl=https%3A%2F%2Flogin.pearson.com%2Fv1%2Fpiapi%2Flogin%2Fjs%2Fv2%...

Painted Desert has acquired several companies. Assume that Painted Desert purchased Oak Tree Unlimited for $14,000,000 cash. The book value of Oak Tree Unlimited's assets is $14,000,000 (fair value, $15,000,000), and it has liabilities of $13,000,000 (fair value, $13,000,000). Requirements 1. Compute the cost of goodwill purchased by Painted Desert. 2. Record the purchase of Oak Tree Unlimited by Painted Desert. Requirement 1. Compute the cost of goodwill purchased by Painted Desert. Purchase price to acquire Oak Tree Unlimited Fair value of Oak Tree Unlimited's assets Less: Fair value of Oak Tree Unlimited's liabilities Less: Fair value of Oak Tree Unlimited's net assets Goodwill Requirement 2. Record the purchase of Oak Tree Unlimited by Painted Desert. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit d&disableStandbyIndicator=true&assignmentHandlesLocale=true&enablelesSession=True&iesClientUrl=https%3A%2F%2Flogin.pearson.com%2Fv1%2Fpiapi%2Flogin%2Fjs%2Fv2%...

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11EB: The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining...

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The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.
Princess has acquired several other companies. Assume that Princess purchased Kittery for $6,000,000 cash. The book value of Kittery's assets is $16,000,000 (market value, $18,000,000), and it has liabilities of $14,000,000 (market value, $14,000,000). Requirements 1. 2. Compute the cost of goodwill purchased by Princess. Record the purchase of Kittery by Princess. Requirement 1. Compute the cost of goodwill purchased by Princess. Purchase price to acquire Kittery Market value of Kittery's assets Less: Market value of Kittery's liabilities Less: Market value of Kittery's net assets Goodwill Date 4 Requirement 2. Record the purchase of Kittery by Princess, Inc. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Accounts and Explanation 6000000 10 Debit Credit
has acquired several other companies. Assume that Princess purchased Kittery for $7,000,000 cash. The book value of Kittery's assets is $13,000,000 (market value, $16,000,000), and it has liabilities of $12,000,000 (market value, $12,000,000). Requirements 1. Compute the cost of goodwill purchased by Princess. 2. Record the purchase of Kittery by Princess. Requirement 1. Compute the cost of goodwill purchased by Princess.
Perkins has acquired several other companies. Assume that Perkins purchased Kettle for $11,000,000 cash. The book value of Kettle's assets is $15,000,000 (market value, $20,000,000), and it has liabilities o: $10,000,000 (market value, $10,000,000). Requirements Compute the cost of goodwill purchased by Perkins. Record the purchase of Kettle by Perkins. 1. 2. Requirement 1. Compute the cost of goodwill purchased by Perkins. Purchase price to acquire Kettle Market value of Kettle's assets Less: Market value of Kettle's liabilities Less: Market value of Kettle's net assets Goodwill Requirement 2. Record the purchase of Kettle by Perkins, Inc.. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit
Princess has acquired several other companies. Assume that Princess purchased Krandell for $8,000,000 cash. The book value of Krandell's assets is $14,000,000 (market value, $19,000,000), and it has liabilities of $15,000,000(market value, $15,000,000). Requirements 1. Compute the cost of goodwill purchased by Princess. 2. Record the purchase of Krandell by Princess. Requirement 1. Compute the cost of goodwill purchased by Princess. Purchase price to acquire Krandell Market value of Krandell's assets Less: Market value of Krandell's liabilities Less: Market value of Krandell's net assets Goodwill Requirement 2. Record the purchase of Krandellby Princess,Inc. (Record debits first, then credits. Select the explanation on the last line of the journal entry table. Check your spelling carefully and do not abbreviate.)
Java Dreams shows assets of $86,400 and liabilities of $15,000. The fair value of the assets is $90,000 and the fair value of its liabilities is $15,000. One Mean Bean paid Java Dreams $95,000 to acquire all of its assets and liabilities. One Mean Bean should record goodwill on this purchase as: $20,000 $3,600 $5,000 $23,600
Melton Devices acquires Beck, a small start-up company, by paying $2,170,900 in cash on January 2. Following are the book values and fair values of Beck on the date of acquisition. (Click the icon to view the book values and fair values.) Read the requirements. Requirement a. What is the amount of goodwill acquired? The amount of goodwill acquired Requirement b. What intangible assets are acquired? Which of the intangibles have an indefinite life? Which will be amortized? What will the amortization expense be in the year after acquisition? (If an input field is not used in the table leave the field empty, do not enter a zero) Intangible Asset Finite or Indefinite Life Amortization Amortized? Expense Trial Balance Beck Book Value Fair Value Cash $ 29,000 $ 29,000 Receivables 100,700 100,650 Manufacturing Equipment 640,350 654,500 Patents (remaining life 8 years) 60,600 684,000 Trademarks 14,650 187,500 Payables 58,904 58,904 Print Done
Columbia recently acquired all of Mercury's net assets in a business acquisition. The cash purchase price was $22,000,000. Mercury's assests and liabilites had the following costs and appraised values: Current assets Land, building and equipment Current liabilites Mortgage payable How much goodwill will rewult from this transaction? Cost Basis $ 6,000,000 $ 14,000,000 Appraised Value $ 6,000,000 $23,000,000 $4,000,000 $4,000,000 $ 10,000,000 $10,000,000
SEASH, Inc. acquired an office building, land, and equipment in a single basket purchase. The fair values were $2,400,000, $1,200,000, and $400,000 for the building, land, and equipment, respectively. The company recorded the building for $2,160,000. What was the total purchase cost for all three assets? Select one: a. $3,400,000 b. $3,600,000 c. $3,200,000 d. $3,800,000 e. $4,000,000
Tender, Inc. dominates the snack-food industry with its Tasty-Chip brand. Assume that Tender, Inc. purchased Concord Snacks, Inc. for $10.4 million cash. The market value of Concord Snacks' assets is $18.6 millia and Concord Snacks has liabilities of $12.7 mllion. Requirements 1. Compute the cost of the goodwill purchased by Tender. 2. Explain how Tender will account for goodwill in future years. Requirement 1. Compute the cost of the goodwill purchased by Tender. (Enter amounts in millions to the nearest tenth of a million, XX) Market value of Concord Snacks' net assets: Less Cost of goodwill Requirement 2. Explain how Tender will account for goodwill in future years. has increased decreased in value. If the goodwill's value has increased, future Tender, Inc. will determine whether its goodwill or decreased, In years, V But goodwill's value has if Choose from any list or enter any number in the input fields and then continue to the next question.
The balance sheet of Cattleman's Steakhouse shows assets of $98,400 and liabilities of $25,000. The fair value of the assets is $105,000 and the fair value of its liabilities is $25,000. Longhorn paid Cattleman's $125,000 to acquire all of its assets and liabilities. Longhorn should record goodwill on this purchase of: Mutiple Choice: A) $28,600. B) $20,000. C) $45,000. D) $73,600.
Larceny Company purchased another entity for P8,000,000. The assets and liabilities of the acquiree at fair value are as follows: Cash P1,000,000 Inventory 500,000 In-process research and development 5,000,000 Assembled workforce 1,200,000 Accounts payable 2,600,000 Notes Payable 400,000 REQUIRED: Determine the amount of goodwill Prepare the journal entry to record the acquisition