Advanced Accounting: FVINA, Allocation Schedule, Purchase Prices...
** Please see the attached file for the complete problem description **
Hill buys Loring on 7/1 for $400,000 by issuing 10,000 of $5 par, $40 fair value shares to Loring's existing shareholders.
(please see the attached file)
Required:
a. Calculate FVINA for this example.
b. Optional: Prepare an allocation schedule.
c. Definition of Goodwill = Purchase Price less ____________ .
d. Calculate Goodwill for this example.
e. Prepare Hill's journal entry to acquire Loring assuming acquisition of stock with no dissolution (not the elimination entries).
f. What will be the balances in Hill's Owners' Equity accounts after the acquisition?
g. Prepare the elimination entries.
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Solution Preview
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In thousands Hill Pre- Loring Loring
Acquisition BV FV
Cash and receivables 140 60 60
Inventory 190 145 175
Patented Technology 230 180 200
Land 400 200 225
Buildings 100 75 75
Total 1,060 660 735
Liabilities (540) (360) (350)
Common Stock (300) (70)
APIC (10) (30)
Retained Earnings, 7/1 (210) (200)
Total (1,060) (660) ...
Solution Summary
This solution explains and solves the given set of accounting problems.