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Chapter 2 Homework Note: Unless otherwise stated, all problems assume that the acquisition method is to...
3. Acquisition Method Prance Company acquired all the assets and liabilities of Seaver Company and properly...
3. Acquisition Method Prance Company acquired all the assets and liabilities of Seaver Company and properly recorded the transaction under the acquisition method. Seaver's balance sheet prior to the transaction was as follows: Book Value Fair Value A/R $ 175,000 $175,000 Inventory 465,000 500,000 20,000 20,000 Equipment Building 90,000 85,000 Land 30,000 60,000 Total Assets $ 780,000 $840.000 Accounts Payable $ 120,000 $130,000 Common Stock ($5 par) 100,000 100,000 Pald in Capital 320,000 310,000 Retained Earnings 240,000 300,000 Total Liab...
Assume that 2,000 shares of common stock with a par value of $12 and a market...
Assume that 2,000 shares of common stock with a par value of $12 and a market price of $16 per share are issued in exchange for land with a fair market value of $32,000. a. Prepare the journal entry to record the transaction. b. If the land's appraised fair market value were $33,000, what would be the correct entry to record the transaction? c. Prepare the necessary journal entry, assuming the same facts as in (b), except that the stock...
On 3 January 20X4, Windsor Company purchased 30% of the shares of Brampton for $656.000 cash....
On 3 January 20X4, Windsor Company purchased 30% of the shares of Brampton for $656.000 cash. Windsor will use the equity method. On this date, Brampton has $1,850,000 of assets. $1.480,000 of liabilities, and $370,000 of equity. Book values reflect fair values except for $830,000 of equipment, which has a five year life and a fair value of $1,037.500. In 20X4, Brampton pays $27,000 of total dividends and reports earnings of $90,000 Required: 1. Calculate goodwill on acquisition, and the...
Turner Company purchased 25% of the outstanding stock of ICA Company for $10,900,000 on January 2,...
Turner Company purchased 25% of the outstanding stock of ICA Company for $10,900,000 on January 2, 2021. Turner elects the fair value option to account for the investment. During 2021, ICA reports $840,000 of net income and on December 30 pays a dividend of $580,000. On December 31, 2021, the fair value of Turner's investment has increased to $13,300,000. Prepare the journal entries in the books of Turner to account for this investment during 2021. Assume that Turner will account...
On 3 January 20X4, Windsor Company purchased 10% of the shares of Brampton for $672,000 cash....
On 3 January 20X4, Windsor Company purchased 10% of the shares of Brampton for $672,000 cash. Windsor will use the equity method. On this date, Brampton has $1,950,000 of assets, $1,560,000 of liabilities, and $390,000 of equity. Book values reflect fair values except for $880,000 of equipment, which has a five-year life and a fair value of $1,100,000. In 20X4, Brampton pays $33,600 of total dividends and reports earnings of $112,000. Required: 1. Calculate goodwill on acquisition, and the annual...
Use the following facts for Multiple Choice problems 38 and 39: Assume on January 1, 2019,...
Use the following facts for Multiple Choice problems 38 and 39: Assume on January 1, 2019, an investor company acquired 100% of the outstanding voting common stock of an investee company. The following financial statement information is for the investor company and the investee company on January 1, 2019, prepared immediately before this transaction. Book Values Investor Investee Receivables & inventories Land.. Property & equipment, net Total assets. $ 100,000 200,000 225,000 $ 525,000 $ 50.000 +10 80,000 - 5...
1. Record the investment 2. Record the investment revenue realized. 3. Record the fair value adjustment....
1. Record the investment
2. Record the investment revenue realized.
3. Record the fair value adjustment.
He Turner Company purchased 35% of the outstanding stock of ICA Company for $11,800,000 on January 2, 2021. Turner elects the fair value option to account for the investment. During 2021, ICA reports $930,000 of net income and on December 30 pays a dividend of $680,000. On December 31, 2021, the fair value of Turner's investment has increased to $15,100,000. Prepare the journal entries...
On January 2, Carrs Company came to an agreement to purchase Pleasantville by acquiring all of...
On January 2, Carrs Company came to an agreement to purchase Pleasantville by acquiring all of its outstanding shares for $575,000 in cash. On that date in time, the fair value of their inventory was $150,000, and the fair value of the equipment was $225,000. The book value is accurate as of January 1, and was equal to fair value. Required: 1.) Compute the goodwill associated with the purchase of Pleasantville. 2.) Prepare the journal entry necessary at January 1,...
Consolidation at date of acquisition (purchase price greater than book value, acquisition journal entries Assume that...
Consolidation at date of acquisition (purchase price
greater than book value, acquisition journal entries
Assume that the parent company acquires its subsidiary by
exchanging 84,000 shares of its $2 par value Common Stock, with a
fair value on the acquisition date of $45 per share, for all of the
outstanding voting shares of the investee. In its analysis of the
investee company, the parent values all of the subsidiary’s assets
and liabilities at an amount equaling their book values except...
12. Ejercicio #2. Favor de responder en el espacio provisto. Son Exercise 2: Prepare balance sheet...
12. Ejercicio #2. Favor de responder en el espacio provisto. Son Exercise 2: Prepare balance sheet after acquisition Comparative balance sheets for Pop and Son Corporations at December 31, 2015, are as follows: Pop Current assets $2,080,000 $960,000 Land 800,000 1,600,000 Buildings-net 4,800,000 1,600,000 Equipment-net 3,520,000 3,840,000 Total assets $11,200,000 $8,000,000 Current liabilities $800,000 $960,000 Capital stock, $10 par 8,000,000 3,200,000 Additional paid-in capital 800,000 2,240,000 Retained earnings 1,600,000 1,600,000 Total equities $11,200,000 $8,000,000 On January 2, 2016, Pop issues...
3. Acquisition Method Prance Company acquired all the assets and liabilities of Seaver Company and properly recorded the transaction under the acquisition method. Seaver's balance sheet prior to the transaction was as follows: Book Value Fair Value A/R $ 175,000 $175,000 Inventory 465,000 500,000 20,000 20,000 Equipment Building 90,000 85,000 Land 30,000 60,000 Total Assets $ 780,000 $840.000 Accounts Payable $ 120,000 $130,000 Common Stock ($5 par) 100,000 100,000 Pald in Capital 320,000 310,000 Retained Earnings 240,000 300,000 Total Liab...
On 3 January 20X4, Windsor Company purchased 30% of the shares of Brampton for $656.000 cash. Windsor will use the equity method. On this date, Brampton has $1,850,000 of assets. $1.480,000 of liabilities, and $370,000 of equity. Book values reflect fair values except for $830,000 of equipment, which has a five year life and a fair value of $1,037.500. In 20X4, Brampton pays $27,000 of total dividends and reports earnings of $90,000 Required: 1. Calculate goodwill on acquisition, and the...
Turner Company purchased 25% of the outstanding stock of ICA Company for $10,900,000 on January 2, 2021. Turner elects the fair value option to account for the investment. During 2021, ICA reports $840,000 of net income and on December 30 pays a dividend of $580,000. On December 31, 2021, the fair value of Turner's investment has increased to $13,300,000. Prepare the journal entries in the books of Turner to account for this investment during 2021. Assume that Turner will account...
Use the following facts for Multiple Choice problems 38 and 39: Assume on January 1, 2019, an investor company acquired 100% of the outstanding voting common stock of an investee company. The following financial statement information is for the investor company and the investee company on January 1, 2019, prepared immediately before this transaction. Book Values Investor Investee Receivables & inventories Land.. Property & equipment, net Total assets. $ 100,000 200,000 225,000 $ 525,000 $ 50.000 +10 80,000 - 5...
1. Record the investment
2. Record the investment revenue realized.
3. Record the fair value adjustment.
He Turner Company purchased 35% of the outstanding stock of ICA Company for $11,800,000 on January 2, 2021. Turner elects the fair value option to account for the investment. During 2021, ICA reports $930,000 of net income and on December 30 pays a dividend of $680,000. On December 31, 2021, the fair value of Turner's investment has increased to $15,100,000. Prepare the journal entries...
Consolidation at date of acquisition (purchase price
greater than book value, acquisition journal entries
Assume that the parent company acquires its subsidiary by
exchanging 84,000 shares of its $2 par value Common Stock, with a
fair value on the acquisition date of $45 per share, for all of the
outstanding voting shares of the investee. In its analysis of the
investee company, the parent values all of the subsidiary’s assets
and liabilities at an amount equaling their book values except...
12. Ejercicio #2. Favor de responder en el espacio provisto. Son Exercise 2: Prepare balance sheet after acquisition Comparative balance sheets for Pop and Son Corporations at December 31, 2015, are as follows: Pop Current assets $2,080,000 $960,000 Land 800,000 1,600,000 Buildings-net 4,800,000 1,600,000 Equipment-net 3,520,000 3,840,000 Total assets $11,200,000 $8,000,000 Current liabilities $800,000 $960,000 Capital stock, $10 par 8,000,000 3,200,000 Additional paid-in capital 800,000 2,240,000 Retained earnings 1,600,000 1,600,000 Total equities $11,200,000 $8,000,000 On January 2, 2016, Pop issues...
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