Solara: From Research to an Acquisition — سؤال دراسة حالة في المحاسب الإداري المعتمد

The case

Solara Diagnostic Systems is a public company developing portable diagnostic equipment. Its controller is reviewing the following 20X8 transactions.

Transaction	Amount and facts
Contract laboratory work	$850,000 for exploratory research completed during 20X8
Experimental test chamber	$900,000; constructed solely for an unsuccessful research project and has no alternative future use
Product launch videos	$180,000; production completed and the videos first used in October 20X8
Acquisition of ClearTrace Instruments	On December 31, Solara paid $3,700,000 cash for all of a business. Acquisition-date fair values are $3,400,000 for identifiable tangible assets and $600,000 for liabilities. There are no separately identifiable intangible assets.
Purchased technology license	$240,000; acquired for ongoing commercial production and available for that use on September 1, rather than acquired solely for research. Remaining contractual life is eight years; expected economic life is five years.

Assumptions

Apply US GAAP for a public business entity; the acquired operation qualifies as a business and the transaction is not an asset acquisition.
Use straight-line amortization, zero residual value and four months of license amortization in 20X8. No impairment occurred.
Solara expenses advertising production costs when the advertising first takes place. Ignore income taxes and acquisition transaction costs.
The listed research costs have no alternative future use; acquired tangible assets generate no post-acquisition depreciation in 20X8 because the acquisition closes at year-end.

Which treatment of the purchased license is appropriate in Solara's 20X8 financial statements?

Answer Capitalize $240,000 and recognize $16,000 of amortization. Capitalize $240,000 and recognize $10,000 of amortization. Expense $240,000 because the license relates to technology. Capitalize $240,000 and begin amortization in 20X9.

Which acquisition-date allocation correctly accounts for the ClearTrace purchase?

Answer Tangible assets of $3,400,000, liabilities of $600,000 and goodwill of $300,000. Tangible assets of $3,700,000, with no separate liabilities or goodwill. Tangible assets of $3,400,000, liabilities of $600,000 and an acquisition expense of $900,000. Tangible assets of $3,400,000, liabilities of $600,000 and goodwill of $900,000.

Select THREE items from these transactions that belong in Solara's December 31, 20X8 asset balances.

Select 3 answers. Selected 0 / 3

Answer The experimental test chamber. The identifiable tangible assets acquired with ClearTrace. The purchased technology license, net of 20X8 amortization. The product launch videos. The completed contract laboratory work for exploratory research. Goodwill arising on the ClearTrace acquisition.

How much total 20X8 expense arises from the transactions listed in the case? Enter a positive amount in whole US dollars; no rounding is necessary.

Answer USD

A whole number.

What is the combined December 31, 20X8 carrying amount of goodwill and the purchased license from these transactions? Enter a positive amount in whole US dollars; no rounding is necessary.

Answer USD

A whole number.

Solara's ClearTrace acquisition residual is Residual classification . Under the stated public-company assumptions it is Subsequent accounting , and its December 31 carrying amount is Residual carrying amount .

Put the four steps of the acquisition method that Solara applies to ClearTrace under ASC 805 in the order the standard sets them out.

Dragging, or the arrow buttons, to reorder.

Recognize and measure goodwill, or a gain from a bargain purchase.
Determine the acquisition date.
Identify the acquirer.
Recognize and measure the identifiable assets acquired and liabilities assumed.

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