Purchase Solution

The Value of Equipment on A Consolidated Balance Sheet

Not what you're looking for?

Ask Custom Question

C. Pepsi Company paid $2M for the net assets of Coca Cola. Coca Cola was then dissolved. Coca Cola had no liabilities and the fair value of Coca Colas assets was $2.5M. Coca Cola's only non-current assets were land with a fair value of $160K and equipment with fair value of $640K. At what value will Coca Cola's equipment be recorded by Pepsi? Why?
-$640K
-$240K
-$400k
-$0

Purchase this Solution
Solution Summary

Citing the relevant authority, this solution discusses the way to report the value of equipment acquired in a business combination on the consolidated balance sheet.

Solution Preview

The equipment will be valued at $640,000, its fair market value. FASB SFAS 141(R) states that "This Statement applies to all transactions or other events in which an entity (the acquirer) ...

Purchase this Solution
Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

View More Free Quizzes
Related BrainMass Solutions

  • Green Company: Reported Inventory, Balance Sheet

    Based on the information given above, the amount to be reported in the consolidated balance sheet for buildings and equipment (net) immediately after the combination is: Guidance: Green Company buildings & equipment, net, at book value $1,000,000

  • Consolidated Balance Sheet Kasper Timmin

    Required a. What amount of retained earnings is reported in the consolidated balance sheet? The amount reported is equal to Kasper's retained earnings balance of $567,000. b.

  • Prepare entries and present consolidated statements

    Give the eliminating entry or entries needed to prepare a consolidated balance sheet immediately following the business combination. b. Prepare a consolidated balance sheet workpaper. c. Prepare a consolidated balance sheet in good form.

  • Consolidated Balance Sheet for Thompson Company

    This tutorial provides instructions on how to create a consolidated balance sheet after a company had acquired the stocks of another corporation.

  • Consolidated work sheet for Terry Duffy

    47510 Consolidated work sheet /balance, etc. P3-15A - Terry Duffy Corporation purchased all the outstanding common stock of Henning Plastics, Inc. on December 31, 2002.

  • Kasper Timmin Purchase Differential

    168658 Incomplete Data with Purchase Differential - The fair value of Timmin's land was $80,000 The fair value of Timmin's land was $80,000, and the fair value of its buildings and equipment was $220,000 at the date of acquisition. Required a.

  • Merrill and GE Consolidation accounting and reporting

    a. At what amount will the $390,000 investment in Harriss be reported on the consolidated balance sheet? b.

  • Allocation schedule for cost book value

    A consolidated balance sheet for Palor Corp is prepared.

  • Eiminating entries for consolidation

    Required a. Give the eliminating entries needed to prepare a consolidated balance sheet immediately after Steadry purchased Lowe stock. b. Give all eliminating entries needed to prepare a full set of consolidated financial statements for 20X2.

View More Related Solutions