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Chapter 2 Doodles

1) The document presents various examples of accounting for business combinations, including the purchase method and calculating goodwill. 2) Information includes calculating the purchase price differential, allocating it to identifiable assets, and recording goodwill. 3) Examples show journal entries to record business combinations at different acquisition dates and percentage of ownership.

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Matt Gille
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105 views6 pages

Chapter 2 Doodles

1) The document presents various examples of accounting for business combinations, including the purchase method and calculating goodwill. 2) Information includes calculating the purchase price differential, allocating it to identifiable assets, and recording goodwill. 3) Examples show journal entries to record business combinations at different acquisition dates and percentage of ownership.

Uploaded by

Matt Gille
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
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2-1

QuietKey Lansing Adj


Market V.
PP&E, net 240,000 100,000 125,000

100,000

25,000
17,600
Consolidated Financial Satements

365,000 (125,000)

340,000

25,000
Book Price 360,000
Purchase Price 420,000
Purchase Differential (60,000)

Book Value Market Value Difference At 60%


Inventory 40,000 50,000 10,000 6,000
Buildings 250,000 300,000 50,000 30,000
Equipment 100,000 180,000 80,000 48,000 84,000

24,000

2-6
Common Stock (market value) 2,500,000
Finder's fee (direct Cost) 350,000
Stock issuance costs (offset APIC) 165,000
Appraisal fees (direct cost) 100,000

2,665,000

Investment in Company 2,500,000


Common Stock 2,665,000
Additional Paid in Capital 165,000

2-7 at 70%
Purchase Price 133,000
Book Value 98,000
Purchase Differential 35,000

Identifiable assets Book Value Market Value Difference 70%


Machinery 150,000 200,000 50,000 35,000
Goodwill - - -

JE
Investment in Slowdown Software 140,000

2-8
Inventory
EEX
CHS Market
Book 90% TOTAL
250,000 207,000 457,000

2-9

Purchase Price 52,000 36,400 315,000


Book Value 105,000
Purchase Differential 210,000

Identifiable assets book value market value difference at 70%


cash 13,000 13,000 - -
receivables 25,000 25,000 - -
inventory 80,000 130,000 50,000 35,000
buildings 350,000 520,000 170,000 119,000 154,000
COGS 260,000
Depreciation Ex 38,000
Current Liabilites 68,000 goodwill goodwill 56,000
Long-term liabilities 250,000
common stock 20,000
retained earnings 78,000
sales 350,000

2-10
inventory 50,000 inventory
buildings 170,000 buildings
goodwill 34,286 goodwill
Revaluation capital 254,286 Revaluation capital

retained earnings 78,000 retained earnings


APIC 78,000 APIC
at 100%
190,000
140,000 42,000
50,000

diff
50,000
full at 70%
Book Value 150,000 105,000

at 30%

15,000
51,000

80,000 24,000

50,000
170,000
80,000
300,000 261,000 195,000 107,000 41,000
6,714 (59,286) (147,286) (213,286)
78,000
78,000

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