Problem - Bullen Inc. acquired 100% of the voting common stock if Vicker Inc. on January 1, 2018. The book value and fair value of Vicker's accounts on that date (prior to creating the combination) are as follows, along with the book value of Bullen's accounts:
|
|
Bullen Book Value
|
Vicker Book Value
|
Vicker Fair Value
|
|
Retained earnings, 1/1/20
|
$250,000
|
$240,000
|
|
|
Cash and receivables
|
170,000
|
70,000
|
$70,000
|
|
Inventory
|
230,000
|
170,000
|
210,000
|
|
Land
|
280,000
|
220,000
|
240,000
|
|
Buildings (net)
|
480,000
|
240,000
|
270,000
|
|
Equipment (net)
|
120,000
|
90,000
|
90,000
|
|
Liabilities
|
650,000
|
430,000
|
420,000
|
|
Common stock
|
360,000
|
80,000
|
|
|
Additional paid-in capital
|
20,000
|
40,000
|
|
1) Assume that Bullen paid a total of $480,000 in cash for all of the shares of Vicker. In addition, Bullen paid $35,000 for secretarial and management time allocated to the acquisition transaction. What will be the balance in consolidated goodwill?
2) Assume that Bullen issued 12,000 shares of common stock with a $5 par value and a $47 fair value for all of the outstanding stock of Vicker. What is the consolidated balance for Land as a result of this acquisition transaction?