Alpha obtains 100% of Beta on January 1, Year 1. Alpha spent $10,000,000 in cash, and also gave to Betas shareholders some Alpha Company stock that had a par value of $700,000 and a fair value of $3,000,000. Alpha spent $20,000 on lawyer and accounting fees in connection with the deal, and $10,000 on stock registration fees. Also, Alpha agreed to pay Betas shareholders an extra amount, of up to $1,000,000, if the income from Beta over the next two years exceeds certain targets. The estimated fair value of this contingent consideration is $150,000 on January 1, Year 1. Compute the total consideration transferred as part of this acquisition.

part 2

QUESTION 25 Use your answer from the previous question in answering this question. (4 points) As of the date of acquisition, Beta had shareholders equity of $10,000,000. All its assets and liabilities had book values equal to fair values except land and its liabilities for lawsuits. The book value of the land was $1,200,000 and the fair value was $1.500,000. The company's books showed a liability for pending litigation of $500,000 but the appropriate fair value of the liability should be 5750,000. Compute the goodwill or bargain purchase gain on this transaction. QUESTION 25 Use your answer from the previous question in answering this question. (4 points) As of the date of acquisition, Beta had shareholders equity of $10,000,000. All its assets and liabilities had book values equal to fair values except land and its liabilities for lawsuits. The book value of the land was $1,200,000 and the fair value was $1.500,000. The company's books showed a liability for pending litigation of $500,000 but the appropriate fair value of the liability should be 5750,000. Compute the goodwill or bargain purchase gain on this transaction