Reference no: EM132624055
ABC Company acquired all 60 million common shares of MSN Company on December 31, 2020. In the acquisition, ABC issued 39 million shares of ABC stock plus $30 cash for each share of MSN stock. ABC stock, which has a par value of $1 per share, had a market value of $25 per share.
The estimated fair value of MSN accounts were as follows:
Cash and cash equivalents $ 100,000,000
Accountgs Receivable $ 150,000,000
Capitalized costs $ 210,000,000
Intangible assets $ 2,500,000,000
Accounts payable $ (215,000,000)
Other Liabilities $ (70,000,000)
Deferred income tax liability $(1,100,000,000)
Required:
Problem 1. Calculate the total price paid for MSN. Is there goodwill or a gain on bargain purchases?
Problem 2. Record the acquisition assuming MSN was dissolved