Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on 1 january 20x1, company alpha acquired 100% con

On 1 January 20x1, Company ALPHA acquired 100% control over the net assets of Company...

80.2K

Verified Solution

Question

Accounting

On 1 January 20x1, Company ALPHA acquired 100% control over the net assets of Company BETA's Malaysian business division (division is not a legal entity). The fair values and book values of Company BETAs assets and liabilities are shown below:

Cashs book value is $40k and fair value is $40k.

Accounts receivables book value is $190k and fair value is $165k.

Inventorys book value is $320k and fair value is $310k.

Freehold lands book value is $3.5million and fair value is $4.2million

Buildings and equipments book value is $800k and fair value is $950k.

Accumulated depreciations book value and fair value both is $250k.

Total assetss book value is $4.6 million and fair value is $5.415 million

Accounts payables book value is $130k and fair value is $130k.

At the date of the business combination, Company ALPHA transferred the following assets to Company BETA as consideration: cash $1,000,000, land with carrying value of $4,000,000 and fair value of $4,800,000, issued shares with fair value of $2,000,000.

Assume tax rate at 20%.

What is the inventory adjustment in Company ALPHAs separate financial statement from acquisition of Company BETA on 1 January 20x1?

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!
Become a Member

Other questions asked by students