During the Current Year, Peterson Data Corporation Acquired All of the Outstanding

question 66

Essay

During the current year, Peterson Data Corporation acquired all of the outstanding common stock of Junior Jackson Inc. (JJI), paying $36 million in cash. Peterson recorded the assets acquired as follows: $$\begin{array} { l r } \text { Accounts receivable } & \$ 2,500,000 \\\text { Inventory } & 9,000,000 \\\text { Property, plant, and equipment } & 25,500,000 \\\text { Goodwill } & 6,000,000\end{array}$$ The book value of JJI's assets and owners' equity before the acquisition were $22 million and $18 million, respectively.
Required: Compute the fair value of JJI's liabilities that Peterson assumed in the acquisition.

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Definitions:

White Blood Cells

Cells of the immune system that are involved in protecting the body against both infectious disease and foreign invaders.

Erythrocytes

Red blood cells which are responsible for carrying oxygen from the lungs to the body tissues and carbon dioxide as a waste product away.

Blood Platelets

Tiny blood cells that play a critical role in clotting, helping to stop bleeding by clumping and forming plugs in blood vessel injuries.

Red Blood Cells

Cells in the blood that transport oxygen from the lungs to the body tissues and carbon dioxide as a waste product back to the lungs.