On January 1, 20X2, End Corporation acquired all of Cork Corporation\'s assets a

Question

On January 1, 20X2, End Corporation acquired all of Cork Corporation's assets and liabilities by issuing shares of its common stock. Partial balance sheet data for the companies prior to the business combination and immediately following the combination are as follows:

What was the fair value of the inventory held by Cork at the date of combination?

What was the fair value of the identifiable net assets held by Cork at the date of combination?

What amount of goodwill, if any, will be reported by the combined entity immediately following the combination?

What balance in retained earnings will the combined entity report immediately following the combination?

If the depreciable assets held by Cork had an average remaining life of 10 years at the date of acquisition, what amount of depreciation expense will be reported on those assets in 20X2?

On January 1, 20X2, End Corporation acquired all of Cork Corporation's assets and liabilities by issuing shares of its common stock. Partial balance sheet data for the companies prior to the business combination and immediately following the combination are as follows:

Explanation / Answer

. Net assets value : (acquired at Fair market value)

cash 26000

accounts receivable(120000-76000) 44000

Inventory(128000-66000) 62000

Building and equipemnt(462000-316000) 146000 278000

less:

Accounts payable 30000

Bonds payable 86000 116000

Net assets value $162000

a. shares to be issued = 162000 / $5

= 32400 share

e.  goodwill = net asset value - total equity of cork corporation

= 162000 - (56000 + 44000 + 33000)

= 162000 - 133000

= 29000

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