On January 1st, 2014, MiniLop Inc. completed the 100% acquisitions of Lionhead Inc. The total...
70.2K
Verified Solution
Link Copied!
Question
Accounting
On January 1st, 2014, MiniLop Inc. completed the 100% acquisitions of Lionhead Inc. The total purchase price MiniLop paid for this acquisition was $13 billion. The book value and fair value of Lionhead Inc. on the date of purchase were as follows ($ in billions):
Book Value Fair Value
Current assets 10 20
Non-current assets 20 40
Liabilities 14 50
Requirement 1: Determine the amount of goodwill that should be recorded from the Lionhead acquisition, if any. Show your work.
During 2014, MiniLop Inc. also spent $170,000 in research and development costs. As a result, a new product called the LG was patented. The patent was obtained on October 1, 2014, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $18,000 (filing fees) related to the patent were incurred as of October 1, 2014.
Requirement 2: Prepare all journal entries required in 2014 as a result of the patent-related transactions and information above
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
