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Riverbed Company acquired the assets (except for cash) and assumed the liabilities of Oriole Company on January 1, 2024, paying $736,000 cash. Oriole Company's December
Riverbed Company acquired the assets (except for cash) and assumed the liabilities of Oriole Company on January 1, 2024, paying $736,000 cash. Oriole Company's December 31, 2023, balance sheet, reflecting both book values and fair values, showed: As part of the negotiations, Riverbed Company agreed to pay the former stockholders of Oriole Company $195,300 cash if the postcombination earnings of the combined company (Riverbed) reached certain levels during 2024 and 2025. The fair value of contingent consideration was estimated to be $188,600 on the date of acquisition. During 2025, the likelihood of meeting the post combination earnings goal significantly decreased and the contingent consideration target was not met. Prepare any journal entry needed to account for the change in the fair value of contingent consideration. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List debit entry before credit entry.) Riverbed Company acquired the assets (except for cash) and assumed the liabilities of Oriole Company on January 1, 2024, paying $736,000 cash. Oriole Company's December 31, 2023, balance sheet, reflecting both book values and fair values, showed: As part of the negotiations, Riverbed Company agreed to pay the former stockholders of Oriole Company $195,300 cash if the postcombination earnings of the combined company (Riverbed) reached certain levels during 2024 and 2025. The fair value of contingent consideration was estimated to be $188,600 on the date of acquisition. During 2025, the likelihood of meeting the post combination earnings goal significantly decreased and the contingent consideration target was not met. Prepare any journal entry needed to account for the change in the fair value of contingent consideration. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List debit entry before credit entry.)
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