Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2018, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts: Book Values Fair Values
Current assets $41,500 $41,500
Building 108,000 67,000
Land 17,000 35,200
Trademark 0 31,800
Goodwill 19,000 ?
Liabilities (50,500) (50,500)
Common stock (100,000)
Retained earnings (35,000 )
Prepare Allerton’s entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts:
1) $166,000
2) $96,000

Scenario 1. Cash Exchange of $166,000

Current assets $41,500 (debit)

Building $67,000  (debit)

Land $35,200  (debit)

Trademark $ 31,800  (debit)

Goodwill  $41,000 (debit)

Liabilities $50,500 (credit)

Investment in Deluxe Company $166,000 (credit)

Scenario 1. Cash Exchange of $166,000

Current assets $41,500 (debit)

Building $67,000  (debit)

Land $35,200  (debit)

Trademark $ 31,800  (debit)

Liabilities $50,500 (credit)

Investment in Deluxe Company $96,000 (credit)

Gain on Bargain Purchase $29,000 (credit)

Explanation:

All assets and liabilities of Deluxe Company have been acquired by Allerton Company. This is known as a Business Combination in terms of IFRS 3.

During a Business Combination transaction, Assets and Liabilities are Acquired at their Fair Values instead of Book Values.

Any Excess of the Purchase Price (Consideration) over the Net Assets taken over is known as Goodwill otherwise it is known as a Gain on Bargain Purchase.

the correct answer is:

it required the president to inform congress within forty-eight hours of any new troop commitment.

the war powers resolution (1973) is a federal law designed to limit the u.s. president’s ability to initiate or intensify military actions abroad without the approval of the congress.

it establishes that the president can send armed forces into action abroad only by declaration of war by congress, statutory authorization, or in case of a national emergency created by attack upon the united states, its territories or possessions, or its armed forces.

it requires the president to notify congress within 48 hours of sending armed forces to military action.

the correct answer is b.)