On January 2, 2018, Johnson Company paid $262,000 to acquire 12,000 shares of Pets Corp. The...
On January 2, 2018, Johnson Company paid $262,000 to acquire 12,000 shares of Pets Corp. The investment represented 25% of the total shares outstanding of Pets Corp. and gave Johnson Company the ability to exert significant influence upon the operations of Pets Corp. During the year ended December 31, 2018, Pets Corp. paid dividends of $1.75 per share (declared and paid on November 12, 2018) and reported income of $269,000. The market value of Pets Corp. stock at December 31, 2018, was $19.75 per share. On the date of the acquisition the book value of Pets Corp. was $772,000 and the fair value of the assets at that time were consistent with the book value except for Equipment which was undervalued by $36,000, with a remaining life of 10 years. Any excess fair value attributable to the acquisition (over cost of acquisition) was applied to goodwill.
1. Prepare all appropriate journal entries related to the investment for 2018, assuming Johnson uses the equity method to account for the acquisition. Show your work representing the development and allocation of the consideration paid.
2. Prepare all appropriate journal entries related to the investment for 2018, assuming that the purchase of the 12,000 shares only represented 10% of the outstanding stock of Pets Corp. and Johnson uses the fair value method to account for the acquisition. Keep in mind the new rules associated with investments in stock instruments – must be treated as trading securities, effective 2018
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On January 2, 2018, Johnson Company paid $262,000 to acquire
12,000 shares of Pets Corp. The...
On January 2, 2018, Johnson Company paid $262,000 to acquire 12,000 shares of Pets Corp. The...
On January 2, 2018, Johnson Company paid $262,000 to acquire 12,000 shares of Pets Corp. The investment represented 25% of the total shares outstanding of Pets Corp. and gave Johnson Company the ability to exert significant influence upon the operations of Pets Corp. During the year ended December 31, 2018, Pets Corp. paid dividends of $1.75 per share (declared and paid on November 12, 2018) and reported income of $269,000. The market value of Pets Corp. stock at December 31,...
On January 2, 2018, Smith Company paid $252,000 to acquire 10,000 shares of Pets Corp. The...
On January 2, 2018, Smith Company paid $252,000 to acquire 10,000 shares of Pets Corp. The investment represented 25% of the total shares outstanding of Pets Corp. and gave Smith Company the ability to exert significant influence upon the operations of Pets Corp. During the year ended December 31, 2018, Pets Corp. paid dividends of $1.75 per share (declared and paid on November 12, 2018) and reported income of $259,000. The market value of Pets Corp. stock at December 31,...
On January 4, 2018, Runyan Bakery paid $332 million for 10 million shares of Lavery Labeling...
On January 4, 2018, Runyan Bakery paid $332 million for 10 million shares of Lavery Labeling Company common stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Lavery's operations. Runyan chose the fair value option to account for this investment. Runyan received dividends of $4.50 per share on December 15, 2018, and Lavery reported net income of $190 million for the year ended December 31, 2018....
On January 4, 2018, Runyan Bakery paid $358 million for 10 million shares of Lavery Labeling...
On January 4, 2018, Runyan Bakery paid $358 million for 10 million shares of Lavery Labeling Company common stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Lavery's operations. Runyan chose the fair value option to account for this investment. Runyan received dividends of $3.50 per share on December 15, 2018, and Lavery reported net income of $320 million for the year ended December 31, 2018....
Milani acquire 10% of Seida Corp. on January 1, 2017, for 190,000 and appropriately accounted for...
Milani acquire 10% of Seida Corp. on January 1, 2017, for 190,000 and appropriately accounted for the investment using the fair-value method. On January1, 2018. Milany purchased an additional 30% of Seida for $600,000 which resulted in significant influence over Seida. On that day, the fair value of Seida's common stock was $2,000,000 in total. Seida's January1, 2018, book value equaled $1,850,000, although land was undervalued by $120,000. Any additional excess fair value over Seida's book value attributable to trademark...
On January 4, 2018, Runyan Bakery paid $334 million for 10 million shares of Lavery Labeling...
On January 4, 2018, Runyan Bakery paid $334 million for 10 million shares of Lavery Labeling Company common stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Lavery's operations. Runyan received dividends of $4.00 per share on December 15, 2018, and Lavery reported net income of $200 million for the year ended December 31, 2018. The market value of Lavery's common stock at December 31, 2018,...
On January 4, 2018, Runyan Bakery paid $346 million for 10 million shares of Lavery Labeling...
On January 4, 2018, Runyan Bakery paid $346 million for 10 million shares of Lavery Labeling Company common stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Lavery's operations. Runyan received dividends of $2.80 per share on December 15, 2018, and Lavery reported net income of $260 million for the year ended December 31, 2018. The market value of Lavery's common stock at December 31, 2018,...
4. On January 1, 2009, Rand Corp, issued shares of its common stock to acquire all...
4. On January 1, 2009, Rand Corp, issued shares of its common stock to acquire all of the outstanding common stock of Spaulding Inc. Spaulding Inc's book value was only $140,000 at the time, but Rand Corp issued 12,000 shares having a par value of S1 per share and a fair value of $20 per share. Rand Corp was willing to convey these shares because it felt that buildings (10-year life) were undervalued on Ss records by $60,000 while equipment...
On January 4, 2018, Runyan Bakery paid $330 million for 10 million shares of Lavery Labeling...
On January 4, 2018, Runyan Bakery paid $330 million for 10 million shares of Lavery Labeling Company common stock. The Investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Lavery's operations. Runyan chose the fair value option to account for this investment. Runyan received dividends of $300 per share! on December 15, 2018. and Lavery reported net income of $180 million for the year ended December 31, 2018...
please show all work needed 4. Johnson paid $325,000 to acquire 100% of Willis Corporation in...
please show all work needed
4. Johnson paid $325,000 to acquire 100% of Willis Corporation in a statutory merger. In addition, Johnson also agreed to pay the shareholders of Willis $0.40 in cash for every dollar in income from continuing operations of the combined entity over $75,000 in the first three years following acquisition. Johnson projects that there is a 20% (45%, 35%) probability that the income from continuing operations in the first three years following acquisition is $65,000 (590,000,...
On January 4, 2018, Runyan Bakery paid $358 million for 10 million shares of Lavery Labeling Company common stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Lavery's operations. Runyan chose the fair value option to account for this investment. Runyan received dividends of $3.50 per share on December 15, 2018, and Lavery reported net income of $320 million for the year ended December 31, 2018....
On January 4, 2018, Runyan Bakery paid $334 million for 10 million shares of Lavery Labeling Company common stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Lavery's operations. Runyan received dividends of $4.00 per share on December 15, 2018, and Lavery reported net income of $200 million for the year ended December 31, 2018. The market value of Lavery's common stock at December 31, 2018,...
On January 4, 2018, Runyan Bakery paid $346 million for 10 million shares of Lavery Labeling Company common stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Lavery's operations. Runyan received dividends of $2.80 per share on December 15, 2018, and Lavery reported net income of $260 million for the year ended December 31, 2018. The market value of Lavery's common stock at December 31, 2018,...
4. On January 1, 2009, Rand Corp, issued shares of its common stock to acquire all of the outstanding common stock of Spaulding Inc. Spaulding Inc's book value was only $140,000 at the time, but Rand Corp issued 12,000 shares having a par value of S1 per share and a fair value of $20 per share. Rand Corp was willing to convey these shares because it felt that buildings (10-year life) were undervalued on Ss records by $60,000 while equipment...
On January 4, 2018, Runyan Bakery paid $330 million for 10 million shares of Lavery Labeling Company common stock. The Investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Lavery's operations. Runyan chose the fair value option to account for this investment. Runyan received dividends of $300 per share! on December 15, 2018. and Lavery reported net income of $180 million for the year ended December 31, 2018...
please show all work needed
4. Johnson paid $325,000 to acquire 100% of Willis Corporation in a statutory merger. In addition, Johnson also agreed to pay the shareholders of Willis $0.40 in cash for every dollar in income from continuing operations of the combined entity over $75,000 in the first three years following acquisition. Johnson projects that there is a 20% (45%, 35%) probability that the income from continuing operations in the first three years following acquisition is $65,000 (590,000,...
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