Advanced Accounting: FVINA, Allocation Schedule, Purchase Prices...
Not what you're looking for?
** 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.
Purchase this Solution
Solution Summary
This solution explains and solves the given set of accounting problems.
Solution Preview
** Please see the attachment for the complete solution **
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) ...
Education
- Chartered Accountant (Equivalent to CPA in US), Institute of Charted Accountants of India
- Bachelor of Commerce, West Bengal University
Recent Feedback
- "I got this feedback and I wanted to know if you can explain it to me. I noticed something within your workings which I believe is incorrect. It looks like you've mistaken the Debt ratio for the Equity Multiplier. You've done a calculation to determine Return on Equity (ROE) but if you take a look at the ratios provided for us you'll see ROE listed on the bottom line already. You can use ROE, Profit Margin and Total Asset Turnover to figure out the Equity Multiplier amount. Equity multiplier is not provided for us and we need to calculate it. I really hope this is helpful to you. "
- "Very attentive to detail. Answers are designed in easy to understand format."
- "Fast response and thorough answer"
- "thank you very much! "
- "thank you so much !!!!!!!"
Purchase this Solution
Free BrainMass Quizzes
Basics of corporate finance
These questions will test you on your knowledge of finance.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.