Grant Company acquired all of Bedford Corporation\'s assets and liabilities on J
ID: 2419612 • Letter: G
Question
Grant Company acquired all of Bedford Corporation's assets and liabilities on January 1, 20X2, in a business combination. At that date, Bedford reported assets with a book value of $642,000 and liabilities of $376,000. Grant noted that Bedford had $43,000 of capitalized research and development costs on its books at the acquisition date that did not appear to be of value. Grant also determined that patents developed by Bedford had a fair value of $140,000 but had not been recorded by Bedford. Except for buildings and equipment, Grant determined the fair value of all other assets and liabilities reported by Bedford approximated the recorded amounts. In recording the transfer of assets and liabilities to its books, Grant recorded goodwill of $107,000. Grant paid $534,000 to acquire Bedford's assets and liabilities. If the book value of Bedford's buildings and equipment was $348,000 at the date of acquisition, what was their fair value?
Grant Company acquired all of Bedford Corporation's assets and liabilities on January 1, 20X2, in a business combination. At that date, Bedford reported assets with a book value of $642,000 and liabilities of $376,000. Grant noted that Bedford had $43,000 of capitalized research and development costs on its books at the acquisition date that did not appear to be of value. Grant also determined that patents developed by Bedford had a fair value of $140,000 but had not been recorded by Bedford. Except for buildings and equipment, Grant determined the fair value of all other assets and liabilities reported by Bedford approximated the recorded amounts. In recording the transfer of assets and liabilities to its books, Grant recorded goodwill of $107,000. Grant paid $534,000 to acquire Bedford's assets and liabilities. If the book value of Bedford's buildings and equipment was $348,000 at the date of acquisition, what was their fair value?
Explanation / Answer
DR Cr Capitalized Research & development cost $43,000 Patents 140000 Goodwill 107000 Cash 534000 Building & Equipment 330000 Ans Total 577000 577000 Capitalized Research & development cost is of no value so can be shown negative on dr side or postive on credit side as it was an asset
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