GOODWILL - Financial Reporting Considerations Cabot Corporation's statement of financial position at 31 December 2013 includes an asset entitled goodwill in the amount of $900,000, net of accumulated amortization. (a) Briefly explain what is meant by the term goodwill. (b) Under what circumstances is goodwill recorded in the accounting records? Include in your Answer a specific situation in which Cabot would have recorded the goodwill mentioned above.
Q: Recording Goodwill upon Acquisition On January 1, 2020, the balance sheet of Naperville Company (a…
A: Amortization: Amortization is the same as depreciation. It is a process of charging the cost of an…
Q: On January 1, 2010, P Company acquired the net assets of S Company for $1,580,000 cash. The fair…
A: Intangible assets: It is an asset that we cannot see, touch. These assets do not have physical…
Q: Abba Company accounted for noncurrent assets using the revaluation model.On July 1, 2021, the entity…
A: As per IFRS 5 Assets held for sale shall be valued at lower of carrying value or fair market value…
Q: The following statement is TRUE / FALSE (circle one): Effective for fiscal years beginning after…
A: Accounting standard means the rules and regulation according to which the books of accounts are kept…
Q: An entity accounts for non-current assets using the revaluation model. On 30 June 2020, the entity…
A: The amount to be recognized in other comprehensive income related to these assets is the increase or…
Q: The general ledger of Sunland Corporation as of December 31, 2021, includes the following accounts:…
A: intangible assets = the asset which can't be seen or touched but is of great value to the…
Q: amount should be reported as goodwill
A: Goodwill should be recognized as an intangible asset if money or money's worth has been paid for it.…
Q: ANEMONE Company engaged your services to compute the goodwill in the purchase of another company…
A:
Q: Floyd Company purchases Haeger Company for $2,400,000 cash on January 1, 2021. The book value of…
A:
Q: On January 1, 2013, Porsche Company acquired the net assets of Saab Company for $450,500 cash. The…
A: Solution: Introduction: Impairment is a diminishing value or a state of ability or fact which occurs…
Q: On December 31, 2021, ORANGE Company owned two assets as follows: Equipment P 100,000 Inventory P…
A: As per IFRS or US GAAP the equipment should be recorded at the recoverable amount if the current…
Q: Land, at valuation Buildings: cost Buildings: accumulated depreciation at 1 January 2019 |Equipment:…
A: In the books of Ferguson ltd : Income Statement Statement of financial position
Q: Company A purchased Company B for $156 cash. At the time of purchase, Company B had the following…
A: Lets understand the basics. When purchaser paid more than the net asset of the company then goodwill…
Q: Positivity Enterprises accounted for noncurrent assets using the revaluation model. On September 1,…
A: As per IFRS 5 Non current assets held for sale and discontinued operation The revaluation of asset…
Q: Intangibles: Balance Sheet Presentation and Income Statement Effects Bringle Company has provided…
A: We have the following information: A patent was purchased from Lou Company for $1,845,000 on…
Q: ou noted the following items relative to the company's intangibles assets of Pete Corporation at…
A: Carrying amount of Franchisee:
Q: Narnia company have the following data relative to a certain entity in determining the amount to be…
A: SOLUTION- GOODWILL IS AN INTANGIBLE ASSETS THAT IS ASSOCIATED WITH THE PURCHASE OF ONE COMPANY BY…
Q: Abba Company accounted for noncurrent assets using the revaluation model.On July 1, 2021, the entity…
A: Impairment loss 2021 = P100,000
Q: Gulf Company purchases Arab Company for $900,000 cash on January 2, 2019. The book value of Arab…
A: Goodwill refers to an intangible asset that is usually associated with the acquisition of a company…
Q: s identified its non-current assets consist of three classes: goodwill, land and plant. Details of…
A: Depereciation of plant =$300,000/10 =$300,000 per year =$1,500 per month book value of plant as on…
Q: On January 1, 2021, the statement of financial position of X Incorporated shows total assets of 30…
A: As per the standard of Non-current assets held for sale and discontinued operation, depreciation of…
Q: Pearl Company accounts for noncurrent assets using the cost model. On October 30, 2012, the entity…
A: As per accounting standard PFRS 5, when an non current asset is classified as held for sale, thne…
Q: On September 1, 2017, Winans Corporation acquired Aumont Enterprises for a cash payment of $700,000.…
A: Workings: Given values Acquired Aumont enterprises for $ 700000 Assets = $ 620000 Liabilities = $…
Q: in A net identifiable assets. XYZ's assets and liabilities on January 1, 2021 approximate their fair…
A: Solution- To calculate the goodwill the fair value of asset and liabilities of the acquired business…
Q: ANEMONE Company engaged your services to compute the goodwill in the purchase of another company…
A: Good will calculation by capitalizing excess earning this method is known as " super profit method"…
Q: On January 1, 2011, Barbidel Company purchased another entity at a cost of P9,000,000. The net…
A: Amount of Goodwill on January 1, 2011 = Purchase costs - fair value of net assets = P9,000,000 -…
Q: On luly 1, 2017, Vinson Corporation acquired Carlev Company for $900,000 cash. At the time of…
A: Goodwill: Goodwill is the good reputation developed by a company over years. This is recorded as an…
Q: The general ledger of Grumpy Corporation as of December 31, 2021, includes the following accounts:…
A:
Q: Arlene Company accounted for noncurrent assets using the cost model. On October 30, 2017, the entity…
A: Normally non current assets are accounted at cost as per cost…
Q: On October 20, 2018, Toffeenut Project Company purchased all the assets and assumed all the…
A: Goodwill is an intangible asset that is recognized during the process of a company buying another…
Q: n January 1, 2018, Paye Company purchased Che Company at a cost that resulted in recognition of…
A: solution : let us analyse the given question first: On January 1, 2018, Paye Company purchased Che…
Q: Accounting Answer asap Group Ccc-Three Ltd has identified its non-current assets consist of three…
A: Revaluation gain is the excess of recoverable amount over the carrying amount of assets, it is…
Q: The fair value of the net identifiable assets of Pax Limited are determined as follows: ($000)…
A: Goodwill: Goodwill is an intangible asset. It is defined as the excess of cost of an acquired…
Q: Arlene Company accounted for noncurrent assets using the cost model. On October 30, 2017, the entity…
A: GIVEN Arlene Company accounted for noncurrent assets using the cost model. On October 30, 2017,…
Q: E7-12 On January 1, 2017, Haley Company had a balance of $360,000 of goodwill on its bal- ance sheet…
A: To begin, preserving extensive documentation of your transactions helps to organize the data in…
Q: The general ledger of Grumpy Corporation as of December 31, 2021, includes the following accounts:…
A:
Q: On August 1, 2017, Concord Corporation acquired Skysong, Inc. for a cash payment of $2.10 million.…
A: Net assets value = Fair value of assets - Liabilities = $4326000-2550000 = $1,776,000
Q: Arlene Company accounted for noncurrent assets using the cost model. On October 30, 2017, the entity…
A: The question is related to Impairment of Non Current Assets. As per IFRS non current assets or…
Q: 1. On July 1, 2010, Jablonski Products purchased the net assets of Duquesne Industries for $285,000…
A: It is pertinent to note that if the purchase consideration is more than the value of net assets…
Q: 4. N COMPANY accounted for noncurrent assets using the revaluation model. On October 1, 2017, the…
A: Gain on Disposal:- When the selling value of assets is more than the carrying or fair value of it…
Q: The intangible assets and goodwill reported by Sunland Corporation at December 31, 2020, follow:…
A: Intangible Assets It is important for the business entity to record the intangible assets and its…
Q: Floyd Company purchases Haeger Company for $800,000cash on January 1, 2011. The book value of Haeger…
A: Consolidation: It can be defined as the process of merging or combining various smaller businesses…
Q: An entity accounts for non-current assets using the revaluation model. On 30 June 2020, the entity…
A: Carrying amount remeasured immediately before classification as held for sale as per applicable…
Q: Goodwill Impairment On January 1, 20Y3, The Simmons Group, Inc., purchased the assets of NWS…
A: Impairment of Goodwill: The term 'Impairment' simply means deterioration in the value of the…
Q: Naughty Company assembles the following data relative to a certain entity in determining the amount…
A: Solution:- 1)Calculation of Average earnings are capitalized at 10% as follows under:- Note:-Average…
Q: On June 30, 2020, Happee Inc. purchased goodwill of P125,000 when it acquired the net assets of Beam…
A: Given, Goodwill acquired along with Net assets = P 125,000 Developed Goodwill costs: Training…
Q: Fifa Co. acquired the Green Co. on January 1,.1 2019 for £640,000,000, and recorded goodwill of…
A: In terms of accountancy, goodwill can be defined as a form of intangible asset which represents the…
Step by step
Solved in 2 steps
- Naughty Company assembles the following data relative to a certain entity in determining the amount to be paid for net assets and goodwill: Assets at fair value before goodwill 2, 600, 000Liabilities 900, 000Shareholders’ equity 1, 700, 000 Net earnings after elimination of unusual or infrequent items:2008 200, 0002009 230, 0002010 300, 0002011 250, 0002012 270, 000 Required:Calculate the amount of goodwill under the following:1. Average earnings are capitalized at 10%2. A return of 8% is considered normal on net assets at fair value. Excess earnings are capitalized at 15%.3. A return of 10% is considered normal on net assets at fair value. Goodwill is measured at 5 years excess earnings.4. A return of 10% is considered normal on net assets at fair value. Excess earnings are expected to…Topic: Intangible Assets (Goodwill) England Company assembled the following data relative to a certain entity in determining the amount to be paid for net assets and goodwill: Assets at fair value before goodwill 2,600,000 Liabilities 900,000 Shareholders' Equity 1,700,000 Net Earnings after elimination of unusual or infrequent items: 2017 200,000 2018 230,000 2019 300,000 2020 250,000 2021 270,000 Required: Calculate the amount of goodwill under the following: 1. Average earnings are capitalized at 10%. 2. A return of 8% is considered normal on net assets at fair value. Excess earnings are capitalized at 15%. 3. A return of 10% is considered normal on net assets at fair value. Goodwill is measured at 5 years excess earnings. 4. A return of 10% is considered…England Company assembled the following data relative to o certain entity in determining the amount to be paid for net assets and goodwill: 2,600,000 Assets at fair value before goodwill Liabilities 1,700,000 Shareholders' equity Net earnings after elimination of unusual or infrequent items: 200,000 230,000 300,000 250,000 270,000 2018 2019 thucms 2020 2021 Required: Calculate the amount of goodwill under the following: 1. Average earnings are capitalized at 10%. 2. A return of 8% is considered normal on net assets at far value. Excess earnings are capitalized at 15%. 3. A return of 10% is considered normal on net assets at fau value. Goodwill is measured at 5 years excess earnings. Goodwill is measured by the present value method using 12% rate. The present value of an ordinary annuity of 12% for 10 years is 5.65.
- a. calculate the purchase consideration b. calculate the goodwill or bargain purchase for this transaction c. Prepare the journal entries in the books of Chelsea Limited relating to this transaction Pax Limited showed the following assets and liabilities in its financial statements at 31 December 2018. DETAILS PPE Inventory Long Term Loans Account Payable CARRYING AMOUNT FAIR VALUE 10,000,000 14,000,000 4,200,000 4,400,000 (3,500,000) (3,500,000) (2,500,000) (2,500,000) 8,200,000 12,400,000 3.1. The current market rate for similar transactions is 8.5% per annum. Chelsea Limited planned to acquire all the assets and liabilities of Pax Limited on 1 July 2018 and agreed to pay R13,400,000 in cash on 1 July 2019 in full settlement of the acquisition.Which method of the matching principle is used when a company recognizes depreciation expense on the income statement? Group of answer choices A. Installment method B. Systematic and rational allocation C. Immediate recognition D. Associating cause and effectAt December 31, 2023, Sandhill Corp's general ledger includes the following account balances: Copyrights $52500 Deposits with advertising agency (will be used to promote goodwill) 43000 Discount on bonds payable 74000 Excess of cost over fair value of identifiable net assets of acquired subsidiary 589500 Trademarks 106000 In the preparation of Sandhill's balance sheet as of December 31, 2023, what should be reported as total intangible assets? O $158500 O $748000 $791000 O $822000
- UPARIAM CANUAR 1 Required information. Requirea: 1. Record amortization expense for the intangible assets at December 31, 2021. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 Record the amortization on goodwill. Note: Enter debits before credits. Transaction General Journal Debit Credit38. The current asset section of a balance sheet most likely will include: a. goodwill arising in a business combination accounted for as acquisition b. all deferred income taxes resulting from interperiod income tax allocation c. rent receivable for a security deposit on a lease d. a receivable from a customer not collectible for over one yearRecord the entry for additional depreciation expense on revaluation of equipment due to conversion from U.S. GAAP to IFRS. Note: Enter debits before credits. Date Account Title Debit Credit 12/31/2021
- Under PFRS 9, a financial asset shall be measured subsequently at amortized cost when: I. The business model of the entity is to hold the financial asset in order to collect contractual cash flows on specifies dates. II. The contractual cash flows are solely payment of principal and interest on the principal amount outstanding. O Il only Both I anf II O Either I orll O lonly NextThe partners of the Liwa Engineering Company have decided to terminate the business. The balances of the company's accounts prior to the liquidation are given in the Table 1. Table 1 Book value in OMR Cash 28,500 Plant assets (net) 75,000 Machinery and equipment (net) 2,500 Inventories 1,300 Liabilities 47,300 Capital, Partner 1 36,000 Capital, Partner 2 24,000 Additional information: The partner 1 and the partner 2 share profits and losses in the ratio 7:3. In the process of liquidation, the non-cash assets are sold for OMR 125,000. Required: A. You are asked to prepare a schedule of cash payments (Table 2), showing how cash will be distributed between the partners as it becomes available. B. Based on the information above (Table 2 – Schedule of Cash Payments), journalize the transactions.5. How should accounting fees for acquisition be treated? A. Expensed in the period of acquisition B. Capitalized as part of acquisition cost C. Deferred and amortized D. Deferred until the company is disposed of or wound-up 6.The excess of the price paid over the fair value of the net identifiable assets acquired should be recognized as A. Goodwill to be amortized periodically for 20 yearS. B. Expenses immediately C. Goodwill not subject to amortization but subject to impairment D. Goodwill to be amortized for 40 years 7.Under PFRS 3 (Business Combinations) A. Both direct and indirect costs are to be capitalized B. Both direct and indirect costs are to be expensed C. Direct costs are to be capitalized and indirect costs are to be expensed D. Indirect costs are to be capitalized and direct costs are to be expensed