Exam 2: Consolidation of Financial Information

With respect to recognizing and measuring the fair value of a business combination in accordance with the acquisition method of accounting, which of the following should the acquirer consider when determining fair value?

Jernigan Corp.had the following account balances at 12/1/17: Several of Jernigan's accounts have fair values that differ from book value.The fair values are: Land - $480,000; Building - $720,000; Inventory - $336,000; and Liabilities - $396,000. Inglewood Inc.acquired all of the outstanding common shares of Jernigan by issuing 20,000 shares of common stock having a $6 par value per share, but a $66 fair value per share.Stock issuance costs amounted to $12,000. Required: Prepare a fair value allocation and goodwill schedule at the date of the acquisition.

Compute the consolidated common stock at the date of acquisition.

Compute fair value of the net assets acquired at the date of the acquisition.

Assume that Bullen issued 12,000 shares of common stock with a $5 par value and a $47 fair value for all of the outstanding stock of Vicker.What is the consolidated balance for Land as a result of this acquisition transaction?

Compute the consolidated expenses for 2018.

Assume that Bullen paid a total of $480,000 in cash for all of the shares of Vicker.In addition, Bullen paid $35,000 for secretarial and management time allocated to the acquisition transaction.What will be the balance in consolidated goodwill?

How are stock issuance costs accounted for in an acquisition business combination?

Compute the investment to be recorded at the date of acquisition.

What amount will be reported for consolidated long-term liabilities?

In a transaction accounted for using the acquisition method where consideration transferred exceeds book value of the acquired company, which statement is true for the acquiring company with regard to its investment?

By how much will Flynn's additional paid-in capital increase as a result of this acquisition?

Peterman Co.owns 55% of Samson Co.Under what circumstances would Peterman not be required to prepare consolidated financial statements?

Compute consolidated retained earnings at the date of the acquisition.

What amount will be reported for consolidated equipment (net)?

Which of the following statements is true regarding the acquisition method of accounting for a business combination?

In this acquisition business combination, what total amount of common stock and additional paid-in capital should Goodwin recognize on its consolidated financial statements?

Compute consolidated goodwill immediately following the acquisition.

Compute consolidated long-term liabilities at the date of the acquisition.

Under the acquisition method, what amount will be reported for consolidated retained earnings?