Pop,Inc.acquires 100% of the outstanding shares of Snap Corp.for $3,923,450 and accounts for the transaction using the purchase method.The purchase price Pop paid for Snap exceeded Snap's book value for four reasons:
1.Snap's long-term depreciable assets have a market value of $1,250,000.
2.Deferred income taxes of $125,000 arise from the excess of market value over the book value of the depreciable assets.
3.Pop assigns a value of $90,000 to Snap's customer list and records it as an intangible asset.
4.Goodwill exists equal to the difference between the acquisition cost and the market value of the identifiable assets and liabilities acquired.
Information about Pop and Snap's balance sheet at the acquisition date and the current market value of Snap's assets appears below:
Required: Complete the table for Snap's current market values and the consolidated amounts at the date of acquisition.

Question

Pop,Inc.acquires 100% of the outstanding shares of Snap Corp.for $3,923,450 and accounts for the transaction using the purchase method.The purchase price Pop paid for Snap exceeded Snap's book value for four reasons:
1.Snap's long-term depreciable assets have a market value of $1,250,000.
2.Deferred income taxes of $125,000 arise from the excess of market value over the book value of the depreciable assets.
3.Pop assigns a value of $90,000 to Snap's customer list and records it as an intangible asset.
4.Goodwill exists equal to the difference between the acquisition cost and the market value of the identifiable assets and liabilities acquired.
Information about Pop and Snap's balance sheet at the acquisition date and the current market value of Snap's assets appears below:
  Required: Complete the table for Snap's current market values and the consolidated amounts at the date of acquisition.

Quizplus · Accepted Answer

The Answer of Pop,Inc.acquires 100% of the outstanding shares of Snap Corp.for $3,923,450 and accounts for the transaction using the purchase method.The purchase price Pop paid for Snap exceeded Snap's book value for four reasons:
1.Snap's long-term depreciable assets have a market value of $1,250,000.
2.Deferred income taxes of $125,000 arise from the excess of market value over the book value of the depreciable assets.
3.Pop assigns a value of $90,000 to Snap's customer list and records it as an intangible asset.
4.Goodwill exists equal to the difference between the acquisition cost and the market value of the identifiable assets and liabilities acquired.
Information about Pop and Snap's balance sheet at the acquisition date and the current market value of Snap's assets appears below:
  Required: Complete the table for Snap's current market values and the consolidated amounts at the date of acquisition.

Pop,IncAcquires 100% of the Outstanding Shares of Snap Corp