Advanced Financial Accounting
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- Baskin Corporation pays $ 420,000 for Camlin Inc. and that the estimated FMV of Assets, Liabilities and Equity are as follows: (1 Mark)
Account Receivable 100,000
PP & E 200,000
Total Assets 350,000
Retained Earnings 80,000
Common Stock 200,000
Liabilities & Equities 350,000
Determine the amount of Goodwill.
2. Zaid Ltd and Zafar Ltd agreed to merge on January 1, 2019. On the date of the merger agreement, the companies reported the following data: (2 Marks)
|Balance Sheet||Zaid Ltd||Zafar Ltd|
|Book Value||Fair Value||Book Value||Fair Value|
|Long Term Assets||600,000||500,000||300,000||275,000|
|Capital in excess of Par Value||40,000||10,000|
Zaid Ltd has 15,000 shares of its $20 par value shares outstanding on January 1, 20X3, and Zafar Ltd has 10,000 shares of $5 par value stock outstanding. The market values of the shares are $400 and $75, respectively.
3. From the Given information Calculate the Book Value and pass Elimination entry: (2 Marks)
- PQR Ltd owns 75% of STV Ltd.
- STV Ltd ’s net income for 20X4 is SAR 250,000
- PQR Ltd’s net income for 20X4 from its own separate operations is SAR 500,000.
- STV Ltd’s declares dividends of SAR 36,000 during 20X4.
- STV Ltd has 20,000 shares of $5 par stock outstanding that were originally issued at $15 per share.
- STV Ltd’s beginning balance in Retained Earnings for 20X4 is SAR 150,000