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    Problem 1

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    Lisel Salibio
    1. National acquired Regional's inventory at book value. The combined inventory on the balance sheet would be $65,000 + $25,000 = $90,000. 2. Baker acquired Werner's equipment at book value. The combined equipment on the balance sheet would be $210,000 + $70,000 = $280,000. 3. Platek acquired Smith's assets and liabilities for $600,000. Goodwill would be included on the balance sheet for $475,000.

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    Problem 1

    Uploaded by

    Lisel Salibio
    34 views3 pages
    1. National acquired Regional's inventory at book value. The combined inventory on the balance sheet would be $65,000 + $25,000 = $90,000. 2. Baker acquired Werner's equipment at book value. The combined equipment on the balance sheet would be $210,000 + $70,000 = $280,000. 3. Platek acquired Smith's assets and liabilities for $600,000. Goodwill would be included on the balance sheet for $475,000.

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    1. National acquired Regional's inventory at book value. The combined inventory on the balance sheet would be $65,000 + $25,000 = $90,000. 2. Baker acquired Werner's equipment at book value. The combined equipment on the balance sheet would be $210,000 + $70,000 = $280,000. 3. Platek acquired Smith's assets and liabilities for $600,000. Goodwill would be included on the balance sheet for $475,000.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    34 views3 pages

    Problem 1

    Uploaded by

    Lisel Salibio
    1. National acquired Regional's inventory at book value. The combined inventory on the balance sheet would be $65,000 + $25,000 = $90,000. 2. Baker acquired Werner's equipment at book value. The combined equipment on the balance sheet would be $210,000 + $70,000 = $280,000. 3. Platek acquired Smith's assets and liabilities for $600,000. Goodwill would be included on the balance sheet for $475,000.

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    Problem 1

    1. National acquired assets and liabilities of Regional for Regional’s book value at the
    balance sheet date. At that date, National’s inventory had a book value and market
    value of P65,000 and P80,000, respectively while Regional’s inventory had a book and
    market value of P25,000 and P25,000, respectively. What amount of inventory would
    appear on the balance sheet?

    Problem 2

    2. Baker Enterprises acquired assets and liabilities assets and liabilities of Werner
    Company for Werner’s book value at the balance sheet date. At that date, Baker’s
    equipment had a net book value and market value of P210,000 and P300,000,
    respectively while Werner’s equipment had a net book and market value of P70,000 and
    P70,000, respectively. What amount of equipment (net) would appear on the balance
    sheet?

    Problem 3

    Platek Enterprises acquired assets and liabilities of Smith Company for P600,000. At
    that date, Smith Company had the following book values and market values:

    Book Value Market Value

    Cash and Receivables P25,000 P25,000

    Inventory 125,000 180,000

    Plant Assets (net) 300,000 475,000

    Current Liabilities (60,000) (60,000)

    Long-term Debt (120,000) (120,000)

    Common Stock (15,000)

    Retained Earnings (255,000)

    3. What amount is included in the balance sheet with regard to goodwill?


    Problem 4

    4. Cozzi Company is being purchased and has the following balance sheet as of the
    purchase date:

    Current assets . . . . . P2 Liabilities . . . . . . . P


    ....... 00, ..... 90,00
    00 0
    0

    Fixed 1 Equity . . . . . . . . . . 290,


    assets . . . . . . . . . . . 80, ...... 000
    ... 00
    0

    The price paid for Cozzi's net assets is P500,000. The fixed assets have a fair value
    of P220,000, and the liabilities have a fair value of P110,000. The amount of
    goodwill to be recorded in the purchase is:

    Problem 5

    1. P Company purchased the net assets of S Company for P225,000. On the


    date of P's purchase, S Company had no investments in marketable securities
    and P30,000 (book and fair value) of liabilities. The fair values of S Company's
    assets, when acquired were:

    Current P120
    assets . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . ,000

    Non-current
    assets . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 180,
    000

    How should the P45,000 difference between the fair value of the net assets
    acquired (P270,000) and the consideration paid (P225,000) be accounted for by
    P Company (indicate if goodwill or gain)?

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