acct 450 ch2
1. award: 0 out of
0.00 points
On June 1, Cline Co. paid $892,000 cash for all of the issued and outstanding common stock of Renn Corp. The carrying values for Renn’s assets and liabilities on June 1 follow:
Cash
$
178,000
Accounts receivable
237,000
Capitalized software costs
374,000
Goodwill
110,000
Liabilities
(201,000
)
Net assets
$
698,000
Note: Parentheses indicate a credit balance.
On June 1, Renn’s accounts receivable had a fair value of $155,000. Additionally, Renn’s in-process research and development was estimated to have a fair value of $235,000. All other items were stated at their fair values. On Cline’s June 1 consolidated balance sheet, how much is reported for goodwill?
$151,000.
$374,000.
$41,000.
$69,000.
Consideration transferred (fair value)
$
892,000
Cash
$
178,000
Accounts receivable
155,000
Capitalized software costs
374,000
Research and development asset
235,000
Liabilities
(201,000
)
Fair value of net identifiable assets acquired
741,000
Goodwill
$
151,000
2. award: 0 out of
0.00 points
On May 1, Donovan Company reported the following account balances:
Current assets
$
113,500
Buildings & equipment (net)
261,500
Total assets
$
375,000
Liabilities
$
95,000
Common stock
150,000
Retained earnings
130,000
Total liabilities and equities
$
375,000
On May 1, Beasley paid $453,900 in stock (fair value) for all of the assets and liabilities of Donovan, which will cease to exist as a separate entity. In connection with the merger, Beasley incurred $19,400 in accounts payable for legal and accounting fees.
Beasley also agreed to pay $83,900 to the former owners of Donovan contingent on meeting certain revenue goals during the following year. Beasley estimated the present value of its probability adjusted expected payment for the contingency at $22,000. In
0.00 points
On June 1, Cline Co. paid $892,000 cash for all of the issued and outstanding common stock of Renn Corp. The carrying values for Renn’s assets and liabilities on June 1 follow:
Cash
$
178,000
Accounts receivable
237,000
Capitalized software costs
374,000
Goodwill
110,000
Liabilities
(201,000
)
Net assets
$
698,000
Note: Parentheses indicate a credit balance.
On June 1, Renn’s accounts receivable had a fair value of $155,000. Additionally, Renn’s in-process research and development was estimated to have a fair value of $235,000. All other items were stated at their fair values. On Cline’s June 1 consolidated balance sheet, how much is reported for goodwill?
$151,000.
$374,000.
$41,000.
$69,000.
Consideration transferred (fair value)
$
892,000
Cash
$
178,000
Accounts receivable
155,000
Capitalized software costs
374,000
Research and development asset
235,000
Liabilities
(201,000
)
Fair value of net identifiable assets acquired
741,000
Goodwill
$
151,000
2. award: 0 out of
0.00 points
On May 1, Donovan Company reported the following account balances:
Current assets
$
113,500
Buildings & equipment (net)
261,500
Total assets
$
375,000
Liabilities
$
95,000
Common stock
150,000
Retained earnings
130,000
Total liabilities and equities
$
375,000
On May 1, Beasley paid $453,900 in stock (fair value) for all of the assets and liabilities of Donovan, which will cease to exist as a separate entity. In connection with the merger, Beasley incurred $19,400 in accounts payable for legal and accounting fees.
Beasley also agreed to pay $83,900 to the former owners of Donovan contingent on meeting certain revenue goals during the following year. Beasley estimated the present value of its probability adjusted expected payment for the contingency at $22,000. In