Pagaling, Coleen Joy S.
Problem III. Assets and Liabilities Acquired, Goodwill and Bargain Purchase Gain, Contingent
Consideration, Changes in Contingent Consideration.
Pop and Sicle Company
1.
Consideration transferred:
Shares (400,000xP100)
40,000,000
Less: MV of Assets and Liabilities Acquired:
Current Assets
1,500,000
Investments
500,000
Land
6,000,000
Buildings
16,000,000
Equipment
2,000,000
Identifiable Intangibles
5,000,000
Current Liabilities
(1,500,000)
Long-term Liabilities
(12,000,000)
(17,500,000)
Goodwill
22,500,000
Current Assets
1,500,000
Investments
500,000
Land
6,000,000
Buildings
16,000,000
Equipment
2,000,000
Identifiable Intangibles
5,000,000
Goodwill
22,500,000
Current Liabilities
1,500,000
Long-term Liabilities
12,000,000
Common Stock
4,000,000
Additional Paid-in Capital
36,000,000
Additional Paid-in Capital
1,100,000
Cash
1,100,000
2. A. Current Assets 5,400,000
Investments 1,500,000
Land 16,000,000
Buildings(net) 56,000,000
Equipment (net) 27,000,000
Intangible Assets 5,000,000
Goodwill 22,500,000
Total Assets 133,400,000
B.
Current liabilities 5,500,000
Long-term Liabilities 32,000,000
Total Liabilities 37,500,000
C. Additional Paid-in Capital 74,900,000
D. Retained Earnings 12,000,000
E. Common Stock 9,000,000
Additional Paid-in Capital 74,900,000
Retained Earnings 12,000,000
Total Shareholders’ Equity 95,900,000
3. 3.
Consideration transferred:
Shares (100,000 shares xP100)
10,000,000
Less: MV of Assets and Liabilities Acquired:
(17,500,000)
Gain on Bargain Purchase
7,500,000
Current Assets
1,500,000
Investments
500,000
Land
6,000,000
Buildings
16,000,000
Equipment
2,000,000
Identifiable Intangibles
5,000,000
Current Liabilities
1,500,000
Long-term Liabilities
12,000,000
Common Stock
1,000,000
Additional Paid-in Capital
9,000,000
Gain on Bargain Purchase
7,500,000
Additional Paid-in Capital
800,000
Cash
800,000
3.A. Current Assets 5,700,000
Investments 1,500,000
Land 16,000,000
Buildings(net) 56,000,000
Equipment (net) 27,000,000
Intangible Assets 5,000,000
Total Assets 111,200,000
B.
Current liabilities 5,500,000
Long-term Liabilities 32,000,000
Total Liabilities 37,500,000
C. Additional Paid-in Capital 48,200,000
D. Retained Earnings 19,500,000
E. Common Stock 6,000,000
Additional Paid-in Capital 48,200,000
Retained Earnings 19,500,000
Total Shareholders’ Equity 73,700,000
4.
Current Assets
Consideration transferred: 1,500,000
Investments
Shares (100,000 shares xP100) 500,000
10,000,00
Land 6,000,000
0
Buildings
Estimated Liability for Contingent Consideration 16,000,000
8,000,000 18,000,000
Less:Equipment
MV of Assets and Liabilities Acquired: 2,000,000 (17,500,000)
Identifiable
Goodwill Intangibles 5,000,000 500,000
Goodwill 500,000
Current Liabilities 1,500,000
Long-term Liabilities 12,000,000
Estimated Liability for 8,000,000
Contingent Consideration
Common Stock 1,000,000
Additional Paid-in Capital 9,000,000
Additional Paid-in Capital 800,000
Cash 800,000
5. A.
Est. Liability for Contingent 3,000,000
Consideration
Goodwill 500,000
Gain on Contingent 2,500,000
Consideration
B.
Est. Liability for Contingent 200,000 B.
Consideration
Gain on decrease in Est. for 200,000
Contingent Liability
Problem IV: Consideration Transferred: Cash plus Contingent Consideration
Pham and Senn Company
1.
Consideration transferred:
Cash 720,000
Estimated Liability for Contingent Consideration 13,000 855,000
Less: MV of Assets and Liabilities Acquired: (801,000)
Goodwill 54,000
January 1, 20x4
Accounts Receivable (net) 65,000
Inventory 99,000
Land 162,000
Buildings 450,000
Equipment 288,000
Goodwill 54,000
Accounts Payable 83,000
Notes Payable 180,000
Est. Liability for Contingent Consideration 135,000
Cash 720,000
January 2, 20x6
Est. Liability for Contingent Consideration 135,000
Cash 135,000
Est. Liability for Contingent Consideration 135,000
Gain on Contingent Consideration 135,000
