acct 450 ch2

acct 400.00 ch2 05.09.2019
 acct 400.00 ch2 Composition

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award:

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In June one particular, Cline Co. paid $892, 000 funds for all of the given and outstanding common stock of Renn Corp. The carrying beliefs for Renn's assets and liabilities upon June you follow:

Cash

$

178, 000

Accounts receivable

237, 000

Capitalized software costs

374, 500

Goodwill

one hundred ten, 000

Liabilities

(201, 500

)

Net assets

dollar

698, 500

Note: Parentheses indicate a credit equilibrium.

On Summer 1, Renn's accounts receivable had a reasonable value of $155, 1000. Additionally , Renn's in-process r and d was approximated to have a good value of $235, 500. All other items were explained at their fair values. On Cline's June one particular consolidated "balance sheet", how much is reported for goodwill?

$151, 1000.

$374, 000.

$41, 1000.

$69, 1000.

Consideration moved (fair value)

$

892, 000

Money

$

178, 000

Accounts receivable

155, 000

Capitalized software costs

374, 1000

Research and development property

235, 000

Liabilities

(201, 000

)

Fair value of netВ identifiableВ assets acquired

741, 000

Goodwill

$

151, 000

installment payments on your

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On, may 1, Donovan Company reported the following accounts balances:

Current assets

bucks

113, 500

Buildings & equipment (net)

261, five-hundred

Total assets

$

375, 000

Financial obligations

$

96, 000

Prevalent stock

150, 000

Retained earnings

130, 000

Total liabilities and equities

$

375, 500

On May one particular, Beasley paid $453, 900 in share (fair value) for all of the assets and financial obligations of Donovan, which will vanish as a independent entity. In connection with the combination, Beasley received $19, 4 hundred in accounts payable to get legal and accounting service fees. Beasley as well agreed to spend $83, 900 to the former owners of Donovan contingent on conference certain revenue goals during the following 12 months. Beasley predicted the present value of their probability modified expected payment for the contingency for $22, 1000. In deciding its provide, Beasley mentioned the following:

•

Donovan holds a building with a good value $31, 200 much more than its publication value. •

Donovan has developed unpatented technology appraised for $27, 600, although is it not recorded in its economic records. •

Donovan includes a research and development activity in procedure with an appraised good value of $52, five-hundred. The task has not but reached scientific feasibility. •

Book principles for Donovan's current property and debts approximate reasonable values.

What should Beasley record as total liabilities incurred or assumed regarding the the Donovan merger?

в†’

$136, four hundred

Legal and accounting costs accounts payable

$

19, 400

Contingent liabilility

twenty two, 000

Donovan's liabilities assumed

95, 500

Liabilities thought or incurred

$

136, 400

three or more.

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On May 1, Donovan Company reported the following consideration balances:

Current assets

money

102, five-hundred

Buildings & equipment (net)

223, five-hundred

Total possessions

$

326, 000

Debts

$

75, 000

Prevalent stock

one hundred and fifty, 000

Retained earnings

106, 000

Total liabilities and equities

bucks

326, 500

On May 1, Beasley paid $413, 100 in share (fair value) for all of the possessions and debts of Donovan, which will cease to exist as a separate entity. Regarding the the merger, Beasley received $20, 300 in accounts payable intended for legal and accounting service fees. Beasley as well agreed to pay $84, 2 hundred to the former owners of Donovan dependant on meeting certain revenue goals throughout the following yr. Beasley predicted the present worth of its...

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