During the current year, Peterson Data Corporation acquired all of the outstanding common stock of Junior Jackson Inc. (JJI), paying $36 million in cash. Peterson recorded the assets acquired as follows: $$\begin{array} { l r }
\text { Accounts receivable } & \$ 2,500,000 \
\text { Inventory } & 9,000,000 \
\text { Property, plant, and equipment } & 25,500,000 \
\text { Goodwill } & 6,000,000
\end{array}$$ 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.

Question

During the current year, Peterson Data Corporation acquired all of the outstanding common stock of Junior Jackson Inc. (JJI), paying $36 million in cash. Peterson recorded the assets acquired as follows: $$\begin{array} { l r } 
\text { Accounts receivable } & \$ 2,500,000 \
\text { Inventory } & 9,000,000 \
\text { Property, plant, and equipment } & 25,500,000 \
\text { Goodwill } & 6,000,000
\end{array}$$ 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.

Quizplus · Accepted Answer

The Answer of During the current year, Peterson Data Corporation acquired all of the outstanding common stock of Junior Jackson Inc. (JJI), paying $36 million in cash. Peterson recorded the assets acquired as follows: $$\begin{array} { l r } 
\text { Accounts receivable } & \$ 2,500,000 \
\text { Inventory } & 9,000,000 \
\text { Property, plant, and equipment } & 25,500,000 \
\text { Goodwill } & 6,000,000
\end{array}$$ 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.

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