Price Corporation acquired 100 percent ownership of Saver
Company on January 1, 20X8, for $123,500. At that date, the fair
value of Saver's buildings and equipment was $17,000 more than the
book value. Accumulated depreciation on this date was $33,000.
Buildings and equipment are depreciated on a 10-year basis.
Although goodwill is not amortized, Price’s management concluded at
December 31, 20X8, that goodwill involved in its acquisition of
Saver shares had been impaired and the correct carrying value was
$2,700. No additional impairment occurred in 20X9.
Trial balance data for Price and Saver on December 31, 20X9, are as
follows:
Price Corporation | Saver Company | ||||||||||||||
Item | Debit | Credit | Debit | Credit | |||||||||||
Cash | $ | 47,500 | $ | 37,000 | |||||||||||
Accounts Receivable | 95,000 | 19,000 | |||||||||||||
Inventory | 107,000 | 29,000 | |||||||||||||
Land | 54,000 | 30,000 | |||||||||||||
Buildings & Equipment | 363,000 | 151,000 | |||||||||||||
Investment in Saver Company | 138,000 | ||||||||||||||
Cost of Goods Sold | 140,000 | 112,000 | |||||||||||||
Wage Expense | 34,000 | 19,000 | |||||||||||||
Depreciation Expense | 24,000 | 8,000 | |||||||||||||
Interest Expense | 11,000 | 2,000 | |||||||||||||
Other Expenses | 22,000 | 15,000 | |||||||||||||
Dividends Declared | 31,000 | 37,300 | |||||||||||||
Accumulated Depreciation | $ | 168,000 | $ | 49,000 | |||||||||||
Accounts Payable | 44,000 | 11,000 | |||||||||||||
Wages Payable | 10,000 | 4,000 | |||||||||||||
Notes Payable | 140,000 | 80,300 | |||||||||||||
Common Stock | 192,000 | 59,000 | |||||||||||||
Retained Earnings | 169,200 | 47,000 | |||||||||||||
Sales | 292,000 | 209,000 | |||||||||||||
Income from Saver Company | 51,300 | ||||||||||||||
$ | 1,066,500 | $ | 1,066,500 | $ | 459,300 | $ | 459,300 | ||||||||
Required:
a. Prepare all consolidating entries needed to prepare a three-part
consolidation worksheet as of December 31, 20X9. (If no
entry is required for a transaction/event, select "No journal entry
required" in the first account field.)
Computation of Net Proceeds : | |||
Cash Received | $ 1,78,900.00 | ||
Less : Recourse Liability | $ (3,390.00) | ||
Net Proceeds | $ 1,75,510.00 | ||
Computation of Gain or Loss : | |||
Carrying Value | $ 2,42,700.00 | ||
Net Proceeds | $ 1,75,510.00 | ||
Loss on sale of receivables | $ 67,190.00 | ||
Journal Entry : | |||
Accounts title and explaination | Debit | Credit | |
Cash | $ 1,78,900.00 | ||
Loss on sale of receivables | $ 67,190.00 | ||
Recourse Liability | $ 3,390.00 | ||
Account Receivable | $ 2,42,700.00 | ||
(To Record loss on sale of receivables in books of pharoah inc.) | |||
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $123,500. At...
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $122,400. At that date, the fair value of Saver's buildings and equipment was $16,000 more than the book value. Accumulated depreciation on this date was $19,000. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price's management concluded at December 31, 20X8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $2,500....
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $122,400. At that date, the fair value of Saver's buildings and equipment was $16,000 more than the book value. Accumulated depreciation on this date was $19,000. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price's management concluded at December 31, 20X8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $2,500....
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $109,600. At that date, the fair value of Saver's buildings and equipment was $15,000 more than the book value. Accumulated depreciation on this date was $15,000. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price’s management concluded at December 31, 20X8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $2,600....
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20x8, for $158,000. At that date, the fair value of Saver's buildings and equipment was $32,000 more than the book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price's management concluded at December 31, 20x8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $5,500. Trial balance data for Price and Saver...
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $183,000. At that date, the fair value of Saver’s buildings and equipment was $42,000 more than the book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price’s management concluded at December 31, 20X8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $8,000. Trial balance data for Price and Saver...
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P4-33 Consolidation Worksheet at End of First Year of Ownership LO 4-5 Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $128,000. At that date, the fair value of Saver's buildings and equipment was $20,000 more than the book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price's management concluded at December 31, 20X8, that goodwill involved in its acquisition of Saver shares had been impaired and the...
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