Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

pls help Bargain Purchase and Preacquisition Contingency On January 2, 2017, Fisher Corporation acquired all of the voting common stock of Grant Corporation for its

pls help image text in transcribed

Bargain Purchase and Preacquisition Contingency On January 2, 2017, Fisher Corporation acquired all of the voting common stock of Grant Corporation for its own stock worth $10,000,000, in a merger. Grant's condensed balance sheet on January 2, 2017, appears below: Note: On December 31, 2016, a lawsuit alleging defective products and claiming damages of $1,000,000 was filed against Grant. The estimated liability and related loss, believed to be $800,000, have not yet been accrued. The lawsuit meets the criteria for recognition as a contingent liability. Required a. Prepare the journal entry made by Fisher to record the acquisition of Grant. There are no unrecorded identifiable intangibles. b. During 2017, new facts are discovered that reset the value of the lawsuit at the date of acquisition to $300,000. Prepare the journal entry to record the change in the value of the lawsuit. c. Assume that at the end of 2018 , based on events occurring after the acquisition date, the lawsuit was settled out of court for $400,000 in cash. Prepare the journal entry to record this event

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

Principles Of Corporate Finance

Authors: Richard A Brealey, Stewart C Myers, Franklin Allen

8th Edition

0073130826, 9780073130828

More Books

Students also viewed these Accounting questions

Question

Under what circumstances do your customers write complaint letters?

Answered: 1 week ago