Question 50 (3 points) H, Inc. acquires 100% of the voting stock of R Company...
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Question 50 (3 points) H, Inc. acquires 100% of the voting stock of R Company on 1/1/Y1 for $400,000 cash. A contingent payment of $16,500 will be paid on 4/15/Y2 if R generates cash flows from operations of $27,000 or more in the next year. H estimates that there is a 20% probability that R will generate at least $27,000 next year, and uses an interest rate of 5% to incorporate the time value of money. The fair value of $16,500 at 5%, using a probability weighted approach, is $3,142. When recording consideration transferred for the acquisition of R on 1/1/Y1, H will record a contingent performance obligation in the amount of $2,671.60 $13,358 $3,142 O $628.40 $16,500
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