Discussion Post: Advanced Topics in Accounting Research
Arizona Corp. had the following account balances at 12/1/19:
o Receivables: $96,000; Inventory: $240,000; Land: $720,000; Building: $600,000; Liabilities: $480,000; Common stock: $120,000; Additional paid-in capital: $120,000; Retained earnings, 12/1/19: $840,000; Revenues: $360,000; and Expenses: $264,000.
Several of Arizona's accounts have fair values that differ from book value. The fair values are:
o Land - $480,000; Building - $720,000; Inventory - $336,000; and Liabilities - $396,000.
Inglewood Inc. acquired all of the outstanding common shares of Arizona by issuing 20,000 shares of common stock having a $6 par value,but a $66 fair value. Stock issuance costs amounted to $12,000.
Imagine you are the decision maker at Inglewood Inc.
Prepare a fair value allocation and goodwill schedule at the date of the acquisition.
Determine in 525 words whether you would encourage acquiring Arizona Corp? Be sure to include your rationale.
The response must include a reference list. Using Times New Roman 12 pnt font, double-space, one-inch margins, and APA style of writing and citations.