On September 1,20X7,Spike Limited Decided to Buy 100% of the Outstanding

question 4

Essay

On September 1,20X7,Spike Limited decided to buy 100% of the outstanding shares of Volley Inc.for $1,200,000 paid for with the issuance of shares.In addition Spike has agreed to pay an additional $250,000 if the revenues of Volley have a 5% growth over the next two years from the date of the acquisition.It has been determined that the fair value of this contingent consideration is $175,000.
The balances showing on the statement of financial position for the two companies at August 31,20X7 are as follows:

After a review of the financial assets and liabilities,Spike determines that some of the assets of Volley have fair values different from their carrying values.These items are listed below:
Capital assets - fair value is $1,350,000
Patent - fair value is $255,000
Brand name - fair value is $135,000
Required:
Determine the amount of goodwill that will be recorded on the business combination.
Prepare the consolidated statement of financial position as at September 1,20X7.

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Definitions:

Measures of Retention

Techniques or assessments used to evaluate the amount of information or knowledge that has been remembered or preserved over time.

Triggering Retrieval

The process of initiating the recall of information from memory, often facilitated by cues or context.

Implicit Memories

Memories that influence thoughts and behaviors without conscious awareness, such as skills and learned tasks.

Cerebellum

A major structure of the hindbrain that is responsible for coordinating voluntary movements, balance, and posture, as well as supporting learning and memory.