Question

Grant Company acquired all of Bedford Corporation's assets and liabilities on January 1, 20X2, in a...

Grant Company acquired all of Bedford Corporation's assets and liabilities on January 1, 20X2, in a business combination. At that date, Bedford reported assets with a book value of $637,000 and liabilities of $375,000. Grant noted that Bedford had $41,000 of capitalized research and development costs on its books at the acquisition date that did not appear to be of value. Grant also determined that patents developed by Bedford had a fair value of $122,000 but had not been recorded by Bedford. Except for buildings and equipment, Grant determined the fair value of all other assets and liabilities reported by Bedford approximated the recorded amounts. In recording the transfer of assets and liabilities to its books, Grant recorded goodwill of $96,000. Grant paid $525,000 to acquire Bedford's assets and liabilities. If the book value of Bedford's buildings and equipment was $341,000 at the date of acquisition, what was their fair value?

Homework Answers

Answer #1

-->> Fair value of buildings and equipment. $427,000

• Expanation:-

Amount paid $ 525,000 Book value of assets. $ 637,000 Book value of liabilities. (375,000) Book value of net assets $ 262,000 Adjustment for research and development costs

(41,000)

Adjusted book value. $ 221,000 Fair value of patent rights 122,000 Goodwill recorded. 96,000 (439,000) Fair value increment of buildings and equipment. $86,000 Book value of buildings and equipment. 341,000 Fair value of buildings and equipment $ 427,000

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Please explain this On January 1, 20X2, Pint Corporation acquired 80 percent of Size Corporation for...
Please explain this On January 1, 20X2, Pint Corporation acquired 80 percent of Size Corporation for $200,000 cash. Size reported net income of $25,000 each year and dividends of $5,000 each year for 20X2, 20X3, and 20X4. On January 1, 20X2, Size reported common stock outstanding of $160,000 and retained earnings of $40,000, and the fair value of the noncontrolling interest was $50,000. It held land with a book value of $90,000 and a market value of $100,000, and equipment...
Princeton Company acquired 75 percent of the common stock of Sheffield Corporation on December 31, 2011....
Princeton Company acquired 75 percent of the common stock of Sheffield Corporation on December 31, 2011. On the date of acquisition, Princeton held land with a book value of $150,000 and a fair value of $300,000; Sheffield held land with a book value of $100,000 and fair value of $500,000. What amount would land be reported in the consolidated balance sheet prepared immediately after the combination? a.$650,000 b.$500,000 c.$550,000 d.$375,000 On January 1, 2011, Primer Corporation acquired 80 percent of...
On December 31, 20X9, Add-On Company acquired 100 percent of Venus Corporation's common stock for $300,000....
On December 31, 20X9, Add-On Company acquired 100 percent of Venus Corporation's common stock for $300,000. Balance sheet information Venus just prior to the acquisition is given here: Cash and Receivables $35,000 Inventory 75,000 Land 100,000 Buildings and Equipment (net) 220,000 Total Assets $430,000 Accounts Payable $65,000 Bonds Payable 150,000 Common Stock 100,000 Retained Earnings 115,000 Total Liabilities and Stockholders’ Equity $430,000 At the date of the business combination, Venus's net assets and liabilities approximated fair value except for inventory,...
On January 1, 2016 Penn acquired 100% of Teller. The transaction was not a bargain purchase....
On January 1, 2016 Penn acquired 100% of Teller. The transaction was not a bargain purchase. On the acquisition date, it was determined that Teller had internally-generated patents with a fair value of $36,327,090 that had not been recorded on its financial statements, in accordance with GAAP. The patents were estimated to have a remaining useful life of 15 years as of the acquisition date.   What amount should be reported on Teller's consolidated financial statements as of 12/31/2021 for these...
Justice Ltd acquired all the assets except cash of League Ltd on 1 July 2018. On...
Justice Ltd acquired all the assets except cash of League Ltd on 1 July 2018. On this date, the statement of financial position contained the following accounts: Assets Current assets Cash 12,000 Accounts receivable 28,840 Inventory 24,880 Non-current assets Buildings 200,000 Accumulated depreciation - building (40,000) Fixtures 60,000 Accumulated depreciation - fixtures (20,000) Plant and equipment 60,000 Accumulated depreciation - plant and equipment (14,200) Goodwill 1,800 Total assets 313,320 Liabilities Current liabilities Accounts payable 32,600 Non-current liabilities Guarantees 31,000 Loans...
Hamlen Corporation acquired 100 percent of Pink's Company's common stock on January 1, 2015. Balance sheet...
Hamlen Corporation acquired 100 percent of Pink's Company's common stock on January 1, 2015. Balance sheet data for the two companies immediately following the acquisition follow: .....................................................Hamlen.................. Pink's Cash.............................................$ 30,000 ..............$25,000 Accounts Receivable........................... 80,000 ................40,000 Inventory........................................ 150,000............... 55,000 Land.............................................. 65,000 ................40,000 Buildings and Equipment...................... 260,000............. 160,000 Less: Accumulated Depreciation............ (120,000)............. (50,000) Investment in Pong Company Stock.......... 150,000 Total Assets...................................... $615,000 ........$270,000 Accounts Payable...............................$ 45,000.......... $ 33,000 Taxes Payable.................................... 20,000............... 8,000 Bonds Payable ................................... 200,000........... 100,000 Common Stock..................................... 50,000 ............20,000 Retained...
Pham Company acquired the assets (except for cash) and assumed the liabilities of Senn Company on...
Pham Company acquired the assets (except for cash) and assumed the liabilities of Senn Company on January 1, 2019, paying $720,000 cash. Senn Company's December 31, 2018, balance sheet, reflecting both book values and fair values, showed: Book Value Fair Value Accounts receivable (net) $ 72,000 $  65,000 Inventory 86,000 99,000 Land 110,000 162,000 Buildings (net) 369,000 450,000 Equipment (net)  237,000   288,000  Total  $874,000 $1,064,000 Accounts payable $ 83,000 $  83,000 Note payable 180,000 180,000 Common stock, $2 par value...
On January 1, 20X8, Ramon Corporation acquired 75 percent of Tester Company's voting common stock for...
On January 1, 20X8, Ramon Corporation acquired 75 percent of Tester Company's voting common stock for $300,000. At the time of the combination, Tester reported common stock outstanding of $200,000 and retained earnings of $150,000, and the fair value of the noncontrolling interest was $100,000. The book value of Tester's net assets approximated market value except for patents that had a market value of $30,000 more than their book value. The patents had a remaining economic life of five years...
Parkland buys all of Sander Company’s assets and liabilities. Sander’ balance sheet at the date of...
Parkland buys all of Sander Company’s assets and liabilities. Sander’ balance sheet at the date of acquisition, including fair value information on its reported assets and liabilities, is as follows: Book Value Dr (Cr) Fair Value Dr (Cr) Assets Cash, receivables $   1,000,000 $     950,000 Inventories 5,000,000 4,000,000 Property and equipment 60,000,000 45,000,000 Total assets $ 66,000,000 Liabilities & Equity Accounts and notes payable $ 30,000,000 29,000,000 Common stock 500,000 Additional paid-in capital 15,000,000 Retained earnings 20,500,000 Total liabilities and...
2- Dubai Corporation acquired 100 percent of Sharjah Company's common stock on January 1, 2019. Balance...
2- Dubai Corporation acquired 100 percent of Sharjah Company's common stock on January 1, 2019. Balance sheet data for the two companies immediately following the acquisition follows: Item Dubai Corporation Sharjah Company Cash $ 30,000 $ 25,000 Accounts Receivable 80,000 40,000 Inventory 150,000 55,000 Land 65,000 40,000 Buildings and Equipment 260,000 160,000 Less: Accumulated Depreciation (120,000 ) (50,000 ) Investment in Spin Company Stock 150,000 Total Assets $ 615,000 $ 270,000 Accounts Payable $45,000 $33,000 Taxes Payable 20,000 8,000 Bonds...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT