Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Target Corporation's assets are acquired by Acquiring Corporation in exchange for $5,100,000 of cash to be paid to Target Corporation. The purchase agreement is dated

Target Corporation's assets are acquired by Acquiring Corporation in exchange for $5,100,000 of cash to be paid to Target Corporation. The purchase agreement is dated March 13, 2019.

Target Corporation's EIN is 23-372698674. Target Corporation's address is 3245 Industrial Blvd.,

McKinney, TX 75070. YOU REPRESENT TARGET (THE SELLER) AND WILL REPORT THE FORM ON BEHALF

OF THE SELLER.

Acquiring Corporation's EIN is 23-900653890. Acquiring Corporation's address is 9200 Bretton Lakes

Rd., Nashville, TN, 37209.

The contract lists the following assets and values assigned by the parties. The parties have agreed that they will follow the purchase price allocation as stated in the contract.

Asset

Assigned FMV

Cash

155,000

Inventory

810,000

Accounts

Receivable

355,000

Workforce in Place

320,000

Customer Lists

160,000

Copyrights

80,000

Equipment

725,000

Furnishings

85,000

Land

240,000

Building

860,000

In addition to the $5,100,000 paid to Target Corporation, Acquiring has also entered into a covenant not to compete with Jack Sparrow, the President of Target. Sparrow will be paid $900,000 for an agreement to not compete with Acquiring for a period of 30 months after the acquisition

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

Forensic Accounting And Fraud Examination

Authors: Paul Barnes

1st Edition

1118454138, 978-1118454152

More Books

Students also viewed these Accounting questions

Question

What training is required for the position?

Answered: 1 week ago