Reference no: EM132580485
Problem 1: CVN corp purchased CK corp for $200,000 cash. As part of the deal, CVN agreed to assume CK's debt, which CK had recorded with a bookvalue of $30,000. CVN received all of CK's assets, which CV had recorded with a total bookvalue $165,000. CVN had hired valuation experts who said the fairvalue of the debt was $32,000 and the fairvalue of the assets was $180,000. How much (if any) goodwill would CVN place on their books for this transaction?
Problem 2: CVN corp had also acquired SC corp. They recognized $18,000 of goodwill on the CVN books. They had given the SC corp owners $50,000 of cash and assumed debt with a bookvalue of $20,000 (which was also its fair value). How much identifiable asset did CVN receive in the transaction?
Problem 3: CVN corp had recently learned that two of their most popular products were no longer demanded in the market place. They have decided to stop making the products and repurpose all of the raw materials into more demanded products. Unfortunately, they have a reasonable amount of finished product. For Product A, the market price has dropped from $50 per unit to $20 per unit. They have 100 units with a bookvalue of $25 per unit. For Product B, the market price has also dropped from $50 per unit to $20 per unit. They have 50 of these items with a bookvalue of $18 per unit. How much (if any) of an impairment should they recognize in this periods financial statement?
Problem 4: Your friends Zach and Adam are arguing. They own a company together, which Zach manages. Zach has pointed out that every piece of equipment he has sold in the last three years has resulted in a gain for the firm. He says this shows he is a great bargainer. Adam argues Zach is just a bad accountant. Who is correct?