During the current year, Peterson Data Corporation purchased all of the outstanding common stock of Junior Jackson Inc. (JJI), paying $36 million in cash. Peterson recorded the assets acquired as follows:
The book value of JJI's assets and owners' equity before the acquisition were $22 million and $18 million, respectively.
Required: Compute the fair value of JJI's liabilities that Peterson assumed in the acquisition.
$$\begin{array} { l r }
\text { Accounts receivable } & \$ 2,500,000 \
\text { Inventory } & 9,000,000 \
\text { Property, plant, and equipment } & 25,500,000 \
\text { Goodwill } & 6,000,000
\end{array}$$

Question

During the current year, Peterson Data Corporation purchased all of the outstanding common stock of Junior Jackson Inc. (JJI), paying $36 million in cash. Peterson recorded the assets acquired as follows:
The book value of JJI's assets and owners' equity before the acquisition were $22 million and $18 million, respectively.
Required: Compute the fair value of JJI's liabilities that Peterson assumed in the acquisition.
 $$\begin{array} { l r } 
\text { Accounts receivable } & \$ 2,500,000 \
\text { Inventory } & 9,000,000 \
\text { Property, plant, and equipment } & 25,500,000 \
\text { Goodwill } & 6,000,000
\end{array}$$

Quizplus · Accepted Answer

The Answer of During the current year, Peterson Data Corporation purchased all of the outstanding common stock of Junior Jackson Inc. (JJI), paying $36 million in cash. Peterson recorded the assets acquired as follows:
The book value of JJI's assets and owners' equity before the acquisition were $22 million and $18 million, respectively.
Required: Compute the fair value of JJI's liabilities that Peterson assumed in the acquisition.
 $$\begin{array} { l r } 
\text { Accounts receivable } & \$ 2,500,000 \
\text { Inventory } & 9,000,000 \
\text { Property, plant, and equipment } & 25,500,000 \
\text { Goodwill } & 6,000,000
\end{array}$$

During the Current Year, Peterson Data Corporation Purchased All of the Outstanding