Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Arizona Corp. acquired the business Data Systems for $320,000 cash and assumed all liabilities at the date of purchase. Datas books showed tangible assets of

Arizona Corp. acquired the business Data Systems for $320,000 cash and assumed all liabilities at the date of purchase. Datas books showed tangible assets of $340,000, liabilities of $19,000, and stockholders equity of $321,000. An appraiser assessed the fair market value of the tangible assets at $310,000 at the date of acquisition. Arizona Corp.s financial condition just prior to the acquisition is shown in the following statements model:

Assets = Liab. + Equity Rev. Exp. = Net Inc. Cash Flow
Cash + Tang. Assets + Goodwill
540,000 + NA + NA = NA + 540,000 NA NA = NA NA

Required: a. Compute the amount of goodwill acquired. b. Record the acquisition in a financial statements model like the preceding one. d. Record the acquisition in general journal format.-Record cash paid for acquisition of assets and liabilities.

image text in transcribed

Record the acquisition in a financial statements model like the preceding one. (In the Cash Flow column, use the initials OA to designate operating activity, IA for investing financing activity, NC for Net Change and NA to indicate the element is not affected by the event. Enter any decreases to account balances with a minus sign.) ARIZONA CORP. Statements Model Liabilities+ Equity Assets Revenue - Expenses Net Income Cash Flow + Tang. + Goodwill - II Cash 540,000 Assets + + + 540,000 NA Acquisition 1 1 + +

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Oil And Gas Accounting

Authors: Steven M. Bragg

2nd Edition

1642210668, 9781642210668

More Books

Students also viewed these Accounting questions

Question

List two types of system directories

Answered: 1 week ago

Question

Solve the following equation. x + 2 = 1 - 3x + 7

Answered: 1 week ago

Question

Write down the Limitation of Beer - Lamberts law?

Answered: 1 week ago

Question

Discuss the Hawthorne experiments in detail

Answered: 1 week ago

Question

Explain the characteristics of a good system of control

Answered: 1 week ago

Question

State the importance of control

Answered: 1 week ago