During the Current Year, Compton Crate Corporation Acquired All of the Outstanding

question 145

Essay

During the current year, Compton Crate Corporation acquired all of the outstanding common stock of Little Lacy Ltd. (LLL), paying $60 million in cash. Compton recorded the assets acquired as follows: $$\begin{array} { l l } \text { Accounts receivable } & \$ 5,500,000 \\\text { Inventory } & 18,000,000 \\\text { Property, plant, and equipment } & 45,500,000 \\\text { Goodwill } & 22,000,000\end{array}$$ The book value of LLL's assets and owners' equity before the acquisition were $50 million and $30 million, respectively.
Required: Compute the fair value of LLL's liabilities that Compton assumed in the acquisition.

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Definitions:

International Wage Gaps

The disparities in income levels for similar jobs across different countries.

Foreign Direct Investment

An investment made by a company or individual in one country in business interests in another country, in the form of establishing operations or acquiring business assets in the other country.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.

Equity Alliance

A collaboration or partnership formed to promote fairness, access, and equal opportunities in various sectors, such as education, healthcare, and employment.