ACC 497 Wk 1 – Apply: Chapter 1: Fair Value Allocation

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ACC 497 Wk 1 - Apply: Chapter 1: Fair Value Allocation
ACC 497 Wk 1 – Apply: Chapter 1: Fair Value Allocation
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ACC 497 Wk 1 – Apply: Chapter 1: Fair Value Allocation

Please Read

 

I am attaching a file with an Excel template for you to use when doing this assignment. You need to complete the template and return it back along with your APA Word file (answer to the Required (2) question below).

 

The following is a revised template due to my error.

ACC497-W1-Apply-template students.xlsx

Arizona Corp. had the following account balances at 12/1/19:

  • Receivables: $96,000; Inventory: $240,000; Land: $720,000; Building: $600,000; Liabilities: $480,000; Common stock: $120,000; Additional paid-in capital: $120,000; Retained earnings, 12/1/19: $840,000; Revenues: $360,000; and Expenses: $264,000.

 

Several of Arizona’s accounts have fair values that differ from book value. The fair values are:

  • Land — $480,000; Building — $720,000; Inventory — $336,000; and Liabilities — $396,000.

 

Inglewood Inc. acquired all of the outstanding common shares of Arizona by issuing 20,000 shares of common stock having a $6 par value, but a $66 fair value. Stock issuance costs amounted to $12,000.

 

Required:

 

  1. Prepare a fair value allocation and goodwill schedule at the date of the acquisition.

  2. Imagine you are the decision maker at Inglewood Inc. Determine in 525- words whether you would encourage acquiring Arizona Corp? Be sure to include your rationale.