ZuoTi.Pro
Question

Lowell Co. acquired 100% of Boston, Inc. on January 1, 2017. On that date, Boston had...

Lowell Co. acquired 100% of Boston, Inc. on January 1, 2017. On that date, Boston had land with a book value of $42,000 and a fair value of $52,000. Also, on the date of acquisition, Boston had a building with a book value of $200,000 and a fair value of $390,000. Boston had equipment with a book value of $350,000 and a fair value of $280,000. Both companies use the same depreciation policy, that the building had a 10-year remaining useful life and the equipment had a 5-year remaining useful life.

On December 31, 2020, the two companies have the following assets:

Lowell

Boston

BV

FV

BV

FV

Land

50,000

60,000

32,000

45,000

Building

300,000

500,000

120,000

234,000

Equipment

600,000

390,000

70,000

56,000

When preparing the consolidation [A] entry to adjust the Buildings on December 31, 2020, Lowell should debit the building for what?

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Lowell Building - Book Value 300,000 Fur value 500.000 Depreciation policy - not mentioned consolidation entry for adjustment

0 0
Add a comment
Know the answer?
Add Answer to:
Lowell Co. acquired 100% of Boston, Inc. on January 1, 2017. On that date, Boston had...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Lowell Co. acquired 100% of Boston, Inc. on January 1, 2017. On that date, Boston had...

    Lowell Co. acquired 100% of Boston, Inc. on January 1, 2017. On that date, Boston had land with a book value of $42,000 and a fair value of $52,000. Also, on the date of acquisition, Boston had a building with a book value of $200,000 and a fair value of $390,000. Boston had equipment with a book value of $350,000 and a fair value of $280,000. Both companies use the same depreciation policy, that the building had a 10-year remaining...

  • Lowell Company acquired 90 percent of Boston Company’s 100,000 outstanding shares on January 1, 2019, for...

    Lowell Company acquired 90 percent of Boston Company’s 100,000 outstanding shares on January 1, 2019, for $234,000 cash. Boston’s share was actively traded at $2.50 per share on the market, which is deemed as the NCI’s fair value per share. Boston's stockholders' equity consisted of common stock of $120,000 and retained earnings of $80,000. An analysis of Boston's net assets revealed the following: Book Value Fair Value Buildings (10-year life) $ 10,000 $ 8,000 Equipment (4-year life) 14,000 18,000 Land...

  • Davis acquires 100% of Ramos on January 1st, 2009. Ramos will be operated as a separate...

    Davis acquires 100% of Ramos on January 1st, 2009. Ramos will be operated as a separate subsidiary. Davis will use the equity method to account for its investment in Ramos. In 2013, Davis has net income of $400,000 and pays dividends of $100,000. Ramos has NI of $200,000 and pays dividends of $75,000. At acquisition date, Davis has a building with a. BV of $800,000 and FV of $900,000. Both buildings have a remaining useful life of 10 years (assume...

  • Red Co. acquired 100% of Brown, Inc. on January 1, Yeart. On that date. Brown had:...

    Red Co. acquired 100% of Brown, Inc. on January 1, Yeart. On that date. Brown had: Book value Fair Value expected life Land 42.000 52.000 forever Building 200,000 600.000 20 years Equipment 350,000 250,000 10 years What will be the net effect on consolidated expenses for the year ended December 31, Year 1 related to the acquisition allocations of Brown? An increase in total expenses of $10,000 A reduction in total expenses of $10,000 b. c. An increase in total...

  • Pepper Company acquired 90 percent of Salt Company's stock at underlying book value on January 1,...

    Pepper Company acquired 90 percent of Salt Company's stock at underlying book value on January 1, 2008. At that date, the fair value of the non-controlling interest was equal to 10 percent of the book value of Salt Company. Salt Co. sold equipment to Pepper Co. for a $360,000 on December 31, 2008. Salt Co. had originally purchased the equipment for $400,000 on January 1, 2005, with a useful life of 10 years and no salvage value. At the time...

  • Pepper Company acquired 90 percent of Salt Company's stock at underlying book value on January 1,...

    Pepper Company acquired 90 percent of Salt Company's stock at underlying book value on January 1, 2008. At that date, the fair value of the non-controlling interest was equal to 10 percent of the book value of Salt Company. Salt Co. sold equipment to Pepper Co. for a $360,000 on December 31, 2008. Salt Co. had originally purchased the equipment for $400,000 on January 1, 2005, with a useful life of 10 years and no salvage value. At the time...

  • Pepper Company acquired 90 percent of Salt Company's stock at underlying book value on January 1,...

    Pepper Company acquired 90 percent of Salt Company's stock at underlying book value on January 1, 2008. At that date, the fair value of the non-controlling interest was equal to 10 percent of the book value of Salt Company. Salt Co. sold equipment to Pepper Co. for a $360,000 on December 31, 2008. Salt Co. had originally purchased the equipment for $400,000 on January 1, 2005, with a useful life of 10 years and no salvage value. At the time...

  • On January 1, 2017 Preibus acquired 100 % of Spicer. This acquisition was not a bargain...

    On January 1, 2017 Preibus acquired 100 % of Spicer. This acquisition was not a bargain purchase. On the date of acquisition, Spicer's Equipment had a net book value of 1,600,000 and a fair value of 1,435,082. Preibus determined that Spicer's equipment had a remaining life of 5 years at the date of acquisition. What is the consolidation adjustment (in addition to adding the two trial balance amounts together) that must be made to the Equipment account when preparing consolidated...

  • Monte Company acquired 70% of the stock of Mo Company on 1 January 2018, for $150,000....

    Monte Company acquired 70% of the stock of Mo Company on 1 January 2018, for $150,000. On this date, the balances of Mo’s stockholders’ equity accounts were: Common Stock, $130,000, and Retained Earnings, $14,000. On 1 January 2018, the market value for the 30% of shares not purchased by Monte was $63,800. On 1 January 2018, Mo’s recorded book values were equal to fair values for all items except: (1) accounts receivable had a book value of $40,000 and a...

  • Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing...

    Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 9,000 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $100,000. However, its equipment (with a five-year remaining life) was undervalued by $5,000 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $30,000, although no value had been recorded...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT