can you help with Accounting Research? Supplyrite Business Combination case

Supplyrite Business Combination REQUIREMENT A.1. List authoritative guidance under GAAP TERM # CODIFICATION TOPIC CODIFICATION NUMBER CODIFICATION DESCRIPTION 1 ACUISITION RELATED COSTS 805-10-65-11 \"Acquisition-related costs are costs the acquirer incurs to effect a business combination. Those costs include finder's fees; advisory, legal, accounting, valuation, and other professional or consulting fees; general administrative costs, including the costs of maintaining an internal acquisitions department; and costs of registering and issuing debt and equity securities. The acquirer shall account for acquisition-related costs as expenses in the periods in which the costs are incurred and the services are received, with one exception. The costs to issue debt or equity securities shall be recognized in accordance with other applicable GAAP.\" 2 3 4 5 6 7 Supplyrite Business Combination Requirement A.2. - Calculate Purchase Price and Goodwill ACQUISITION COST CASH PAID NOTE ISSUED $37,500,000 $10,000,000 $47,500,000 FAIR VALUE OF ASSETS RECEIVED Fixed Assets: Land Buildings Transportation Equipment Computer Equipment Furniture $1,250,000 $3,475,000 $750,000 $675,000 $55,000 $6,205,000 Custormer Relationships Trade Name Non-Compete Agreement $8,675,000 $2,325,000 $1,295,000 $12,295,000 Accounts Receivable Inventory Prepaid Assets Other Assets Cash $17,000,000 $19,000,000 $189,500 $350,000 $35,500 $36,575,000 Intangible Assets: Current Assets: Total Assets Received $55,075,000.00 Current Liabilities: Notes Payable Accounts Payable Accrued Expenses Deferred Compensation $4,000,000 $10,390,000 $3,710,000 $5,600,000 $23,700,000.00 Total Net Assets Received Net Goodwill Valuation $31,375,000 A2 $16,125,000 Supplyrite Business Combination Requirement A.3. Prepare Equipco's opening July 1, 20x9 balance sheet Equipco Opening Balance Sheet JULY 1, 20X9 Account Opening Balance Cash Accounts Receivable Inventory Prepaid Expenses $35,500 $17,000,000 $19,000,000 $189,500 Total Current Assets ASSETS Adj Ref Fair Value Adjustments Adjusted Opening Balance $35,500 $17,000,000 $16,500,000 $189,500 $71,000 $34,000,000 $35,500,000 $379,000 $36,225,000 Current Assets: Property, Plant & Equipment: Land Buildings Transportation Equipment Computer Equipment Furniture and Fixtures Less: Accumulated Depreciation Net PP&E $500,000 $2,250,000 $900,000 $535,000 $150,000 $4,335,000 $3,100,000 $1,235,000 Goodwill Intangible Assets: Customer Relationships Tradename Non-Compete Agreement (1) $69,950,000 (2) (2) (2) (2) (2) (2) (3) (7) $8,675,000 $2,325,000 $1,295,000 $12,295,000 $1,250,000 $3,475,000 $750,000 $675,000 $55,000 $6,205,000 $16,125,000 A2 $16,125,000 (4) (4) (4) $- Other Assets Total Assets $1,750,000 $5,725,000 $1,650,000 $1,210,000 $205,000 $10,540,000 $3,100,000 $13,640,000 $49,755,000 $8,675,000 $2,325,000 $1,295,000 $12,295,000 $$112,010,000 Liabilities & Stockholders Equity Current Liabilities: Note payable-bank Note payable-former shareholders-Equipco Accounts Payable Accrued Expenses Total Current Liabilities $4,000,000 $4,000,000 $$10,390,000 $3,710,000 $18,100,000 (5) $10,390,000 $3,710,000 $18,100,000 Long-term liabilities: Note payable-former shareholders-Equipco Deferred Compensation (5) $$$- $Stockholders' Equity: Common Stock Additional Paid in Capital Retained Earnings $$$$- (6) (6) $- Total Liabilities and Stockholders' Equity $18,100,000 Acquisition Accounting Entry Explanations: (1) To write up inventory to fair value (i.e., eliminate LIFO reserves). (2) To adjust property and equipment to fair value, based upon appraisals received by the Company. (3) To write off previously recorded goodwill. (4) To record amortizable intangible assets identified as part of the purchase. (5) To record the note payable due to Eqipco's former owners. 6) To adjust equity to the total amount of cash consideration paid for Equipco stock. (7) To record goodwil l once all other intangibles are identified, valued and recorded. $- $18,100,000 Supplyrite Business Combination REQ B4 Requirement B4 Reformat Opening balance sheet from GAAP to IFRS EQUIPCO IFRS STATEMENT OF FINANCIAL POSITION JUNE 30, 20X9 Non-current Assets Property plant and equipment: Land Building and improvements Transportation Equipment Computer Equipment Furniture and Fixture $Less: Accumulated Depreciation $Goodwill Intangible Assets Customer relationships Tradename Non-compete agreement $Other non-current assets Total non-current assets $- Current Assets Cash Accounts receivable Inventory Prepaid Expenses Total Current Assets Total Assets $$- Current Liabilities Note payable-bank Accounts payable Accrued expenses Total current liabilities $- Non-current liabilities Deferred Compensation Total non-current liabilities $- Total Liabilities Net Assets $$- Stockholder's Equity Share Capital Share Premium Retained Earnings Total Stockholders's equity $- Supplyrite Business Combination REQUIREMENT B5 List authoritative guidance under IFRS IFRS TOPIC IFRS OR IAS NUMBER IFRS DESCRIPTION Supplyrite Business Combination Requirement B6 - Calculate Purchase Price and Goodwill under IFRS ACQUISITION COST CASH PAID NOTE ISSUED $- FAIR VALUE OF ASSETS RECEIVED Fixed Assets: Land Buildings Transportation Equipment Computer Equipment Furniture $- Custormer Relationships Trade Name Non-Compete Agreement $- Accounts Receivable Inventory Prepaid Assets Other Assets Cash $- Intangible Assets: Current Assets: Total Assets Received $- Notes Payable Accounts Payable Accrued Expenses Deferred Compensation $- Current Liabilities: Total Net Assets Received Net Goodwill Valuation $B6 $- Supplyrite Business Combination REQ B7 Opening balance sheet under to IFRS EQUIPCO IFRS STATEMENT OF FINANCIAL POSITION JULY 1, 20X9 June 30, 20x9 Unadjusted Balance Non-current Assets Property plant and equipment: Land Building and improvements Transportation Equipment Computer Equipment Furniture and Fixture Less: Accumulated Depreciation Goodwill Intangible Assets Customer relationships Tradename Non-compete agreement Other non-current assets Total non-current assets ADJ REF Adjusted July 1, 20x9 Opening Balance Fair Value Adjustments $$$$$$$$- (2) (2) (2) (2) (2) $$$$$- (2) $- $- (3) (7) $$$$$$- $$- B6 $$- (4) (4) (4) $$$$$$- Current Assets Cash Accounts receivable Inventory Prepaid Expenses Total Current Assets Total Assets Current Liabilities Note payable-bank Note payable-former shareholder Equipco Accounts payable Accrued expenses Total current liabilities $$$$$$- $$$$- (1) $$- $- $$$$- (5) $$$- Non-current liabilities Note payable-former shareholder Equipco Deferred Compensation Total non-current liabilities $$- Total Liabilities Net Assets $$- Stockholder's Equity Share Capital Share Premium Retained Earnings $$$- Total Stockholders's equity $- $- (5) $$$$$- (6) (6) Acquisition Accounting Entry Explanations: (1) To write up inventory to fair value (i.e., eliminate LIFO reserves). (2) To adjust property and equipment to fair value, based upon appraisals received by the Company. (3) To write off previously recorded goodwill. (4) To record amortizable intangible assets identified as part of the purchase. (5) To record the note payable due to Eqipco's former owners. 6) To adjust equity to the total amount of cash consideration paid for Equipco stock. (7) To record goodwil l once all other intangibles are identified, valued and recorded. $$- $$$$- Supplyrite Business Combination Case Requirement B: Business Combination Accounting under IFRS. Requirement 4: Requirement #4 is to prepare the opening statement of financial position for Equipco as of July 1, 20X9 as it would be presented under the requirements of IFRS. It should be noted that the balance sheet under IFRS, including the title, is quite different than it is under GAAP, even though the numbers are still the same. The difference is that, instead of the grand totals being Total Assets and Total Liabilities and Stockholders' Equity, the grand totals under IFRS are Net Assets and Total Stockholders' Equity. The main categories are: 1. 2. 3. 4. 5. 6. 7. 8. Non-current Assets Current Assets Total Assets Current Liabilities Non-current liabilities Total liabilities Net Assets Total Stockholders' equity. Requirement #5: The solution suggests that IFRS has converged with U.S. GAAP, which means that treatment of business combinations is basically the same under both. So based on the references you found for GAAP, what are the similar references for IFRS? Requirement #6: Based on Requirement #5, this answer should be the same as it was for GAAP. There will be three columns to this statement of financial position: 1. Unadjusted Balance a. This is the June 30, 20X9 balances that are listed on the Equipco Balance Sheet in Table C3-1 on page 64 rearranged to meet the requirements of IFRS. b. Fair Value Adjustment Column - this is the column where all of the adjustments will be made. c. There will be seven adjustments under this column. i. To write up inventory to fair value (i.e., eliminate LIFO reserves) ii. To adjust property and equipment to fair value, based upon appraisals received by the Company. iii. To write off previously recorded goodwill. iv. To record amortizable intangible assets identified as part of the purchase. v. To record the note payable due to Equipco's former owners. vi. To adjust equity to the total amount of cash consideration paid for Equipco's stock. vii. To record goodwill once all other intangibles are identified, valued and recorded. d. The transaction is recorded according to the provisions of IFRS 3(R), Business Combinations. e. Adjusted Opening Balance f. Check figures: i. Adjusted Opening Balances 1. Current Assets - $38,725,000 2. Property, Plant and Equipment - Cost and Book Value - $6,205,000. 3. Goodwill - needs to be calculated in Requirement A2. 4. Intangible Assets - ? 5. Total Non-Current Assets - $32,475,000. 6. Total Assets - $71,200,000. 7. Net Assets - $37,500,000. Supplyrite Business Combination Case Requirement A: Business Combination Accounting under U.S. GAAP Requirement 1: The first requirement is to list all of the possible references under U.S. GAAP that are applicable to business combinations. As a hint, you should start your search in Section 800 of the topical categories. That is the section you will find all information related to Business Combinations. There are seven key terms. Students should be referencing numbers 2-6: 1234567- Acquisition Related Costs - reference 1 Acquisition Related Costs - reference 2 Calculation of Goodwill Identification of Intangible Assets Measurement Principles Steps of Acquisition Acquisition method Students will be graded on the following input. - Correctly identify the authoritative guidance for the case under US GAAP. Adequately describe what the codification covers. Example for #1 - o o ACUISITION RELATED COSTS-Reference 1 805-10-65-11 \"Acquisition-related costs are costs the acquirer incurs to effect a business combination. Those costs include finder's fees; advisory, legal, accounting, valuation, and other professional or consulting fees; general administrative costs, including the costs of maintaining an internal acquisitions department; and costs of registering and issuing debt and equity securities. The acquirer shall account for acquisition-related costs as expenses in the periods in which the costs are incurred and the services are received, with one exception. The costs to issue debt or equity securities shall be recognized in accordance with other applicable GAAP.\" o Supplyrite Business Combination Case Requirement A: Business Combination Accounting under U.S. GAAP Requirement 2: The purchase price and Goodwill in this transaction is calculated as follows: Cash Paid xxx Plus: Debt Issued xxx Total Purchase Price xxxxx The Goodwill is calculated as follows: Purchase Price from above $xxxx Less the Fair Market Value of the Net Assets received. List the FMV of each item under the following categories: FMV of the Net Assets Received is: Fixed Assets: xxx Plus: Intangible Assets other than Goodwill xxx Current Assets xxx Total FMV of Assets Received xxxx Less: Liabilities Assumed List each liabilities individual Current Liabilities (xxxx) Long Term Liabilities (xxxx) NET ASSETS RECEIVED GOODWILL EQUALS - Purchase Price less Net Assets Received xxxx $xxxx Supplyrite Business Combination Case Requirement A: Business Combination Accounting under U.S. GAAP Requirement 3: Requirement #3 is to prepare the opening balance sheet for Equipco as of July 1, 20X9 as it would be presented under the requirements of GAAP. There will be three columns to this balance sheet: 1. Opening Balance a. This is the June 30, 20X9 balances that are listed on the Equipco Balance Sheet in Table C3-1 on page 64. b. Fair Value Adjustment Column - this is the column where all of the adjustments will be made. c. There will be seven adjustments under this column. i. To write up inventory to fair value (i.e., eliminate LIFO reserves) ii. To adjust property and equipment to fair value, based upon appraisals received by the Company. iii. To write off previously recorded goodwill. iv. To record amortizable intangible assets identified as part of the purchase. v. To record the note payable due to Equipco's former owners. vi. To adjust equity to the total amount of cash consideration paid for Equipco's stock. vii. To record goodwill once all other intangibles are identified, valued and recorded. d. The transaction is recorded according to the provisions of SFAS 141R (ASC 805), Business Combinations. e. Adjusted Opening Balance. f. Check figures: i. Adjusted Opening Balances 1. Current Assets - $38,725,000 2. Property, Plant and Equipment - Cost and Book Value - $6,205,000. 3. Goodwill - needs to be calculated in Requirement A2. 4. Intangible Assets - ? 5. Total Assets - $71,200,000. 6. Current Liabilities - $20,100,000. Supplyrite Business Combination Case Instructions The Supplyrite Business Combination Case is Case 3, beginning on page 62 of the \"Mastering FASB Codification and IFRS, A Case Approach\" text. This case is a business combination/acquisition case dealing with the following specific topics: 1. Identifying and stating the applicable FASB and IFRS codifications that apply to this particular case. 2. Calculating the purchase price of the acquisition under both GAAP and IFRS. 3. Calculating the purchased Goodwill under both GAAP and IFRS. 4. Preparing the correct opening day trial balance under both GAAP and IFRS. a. Beginning with the unadjusted opening balance just prior to the combination. b. Adding the appropriate fair market value adjustments. c. Ending with the adjusted opening balance just after the combination. These topics are incorporated into seven specific requirements as listed on page 63 of the text. This case is worth a total of 30 available points as follows: 1. List and explain the seven specific FASB codifications applicable to this case. The first one is completed as an example. 6 points (1 each). 2. Compute the purchase price of the acquisition and the Goodwill. 4 points. 3. Prepare the Equipco opening GAAP balance sheet at July 1, 20X9, starting with the June 30th trial balance and adding in the correct fair market value adjustments. 4 points. 4. Reformat Equipco's June 30, 20x9 balance sheet into an IFRS statement of financial position. 4 points. 5. List the IFRS codification and authoritative guidance that applies to this case. 4 points. 6. Compute the purchase price of the acquisition under IFRS. 4 points. 7. Prepare the Equipco opening IFRS Statement of Financial Position at July 1, 20X9, starting with the June 30th trial balance and adding in the correct fair market value adjustments. 4 points. This case is to be completed on the Microsoft Excel template that is found under the \"Supplyrite Case Instruction & Instructor Notes\" tab. There is a separate sheet for each individual requirement that must be completed. This file is entitled \"Supplyrite Case.xlsx\". Students are to rename the file as follows: Supplyrite Case_Your Name.xlsx. After completing the case on this template, it is to be submitted to the drop box entitled: Supplyrite Case located under the Week 2 Assignments folder. This assignment will only be accepted on this template