On December 30, 2020, Sherlock Co. acquired 100% of Barrett Corporation for $750,000 cash. The post-combination,...
On December 30, 2020, Sherlock Co. acquired 100% of Barrett Corporation for $750,000 cash. The post-combination, but pre-consolidation, balance sheets of the two firms showed total assets of $1,500,000 for the parent and $440,000 for the subsidiary. The book values of the subsidiary’s net assets approximated their fair values, and there are no unrecorded net assets.
Total assets on the consolidated balance sheet would be:
a. $ 750,000
b. $1,190,000
c. $1,940,000
d. $2,690,000
On January 1, 2020, Sarai, Inc. purchased 40% of the voting common stock of Rolls Corp. for $500,000. There was no amortization. During 2020, Rolls paid dividends of $50,000 and reported a net loss of $120,000.
What is the balance in the Equity Investment account on December 31, 2020?
a. $432,000
b. $380,000
c. $528,000
d. $548,000
Spring Creek, Inc. purchased a 18% interest in Floyd Corporation on January 2, 2020. The purchase price was $200,000. Spring Creek's officers constitute a majority of Floyd Corporation’s board of directors. The investee reported net income of $300,000 and paid dividends of $50,000 in 2020.
On the December 31, 2020, balance sheet, what amount should Spring Creek, Inc. report as Equity Investment in Floyd Corporation?
a. $245,000
b. $254,000
c. $263,000
d. $300,000
Homework Answers
Sherlock Co.
Answer: b. $1,190,000
Total assets on the consolidated balance sheet = $1,500,000 + $440,000 - $750,000 = $1,190,000
Sarai Inc.
Answer: a. $432,000
Balance in Equity Investment account on December 31, 2020 = $500,000 – (40% x $50,000) - (40% x $120,000) = $500,000 – 20,000 - $48,000 = $432,000
Spring Creek, Inc.
Answer: a. $245,000
Since Spring Creek’s officers constitute a majority of Floyd Corporation’s board of directors, the circumstances indicate Spring Creek to have significant influence over Floyd Corporation and hence the investment in Floyd Corporation will be accounted for under the equity method.
Equity Investment in Floyd Corporation on December 31, 2020 balance sheet = $200,000 – (18% x $50,000) + (18% x $300,000) = $200,000 - $9,000 + $54,000 = $245,000.
Add Answer to:
On December 30, 2020, Sherlock Co.
acquired 100% of Barrett Corporation for $750,000 cash. The
post-combination,...
On December 18, 2020, Stephanie Corporation acquired 100 percent of a Swiss company for 4.021 million...
On December 18, 2020, Stephanie Corporation acquired 100 percent of a Swiss company for 4.021 million Swiss francs (CHF), which is indicative of book and fair value. At the acquisition date, the exchange rate was $1.00 = CHF 1. On December 18, 2020, the book and fair values of the subsidiary’s assets and liabilities were as follows: Cash CHF 821,000 Inventory 1,321,000 Property, plant, and equipment 4,021,000 Notes payable (2,142,000 ) Stephanie prepares consolidated financial statements on December 31, 2020....
On December 18, 2017, Stephanie Corporation acquired 100 percent of a Swiss company for 4.0 million...
On December 18, 2017, Stephanie Corporation acquired 100 percent
of a Swiss company for 4.0 million Swiss francs (CHF), which is
indicative of book and fair value. At the acquisition date, the
exchange rate was $1.00 = CHF 1. On December 18, 2017, the book and
fair values of the subsidiary’s assets and liabilities were:
Cash
CHF
814,000
Inventory
1,314,000
Property, plant & equipment
4,014,000
Notes payable
(2,128,000
)
Stephanie prepares consolidated financial statements on December
31, 2017. By that...
On December 18, 2017, Stephanie Corporation acquired 100 percent of a Swiss company for 4.0 million...
On December 18, 2017, Stephanie Corporation acquired 100 percent of a Swiss company for 4.0 million Swiss francs (CHF), which is indicative of book and fair value. At the acquisition date, the exchange rate was $1.00 = CHF 1. On December 18, 2017, the book and fair values of the subsidiary’s assets and liabilities were: Cash CHF 805,000 Inventory 1,305,000 Property, plant & equipment 4,005,000 Notes payable (2,110,000 ) Stephanie prepares consolidated financial statements on December 31, 2017. By that...
3. Potter, Inc., acquires 10% of Weasley Corporation on January 1, 2020, for $300,000. During 2020,...
3. Potter, Inc., acquires 10% of Weasley Corporation on January 1, 2020, for $300,000. During 2020, Weasley reported net income of $250,000 and paid total dividends of $50,000. On January 1, 2021, Potter purchased an additional 30% of Weasley for $900,000. During 2021, Weasley reported net income of $420,000 and paid dividends of $20,000. Required: a. Prepare the January 1, 2021 entry to adjust the equity investment account for the initial adoption of the Equity Method. b. Compute the balance...
Problem 4 (20 pts) On January 1, 2020, Jordan Inc. purchased 30% of the outstanding common...
Problem 4 (20 pts) On January 1, 2020, Jordan Inc. purchased 30% of the outstanding common stock of Melody Corporation at a cost of $600,000. Melody Corporation had 800,000 shares of common stock outstanding. At the date of purchase, the book value of Melody's net assets was $1,500,000. Book value and fair value of net assets were the same for all balance sheet items except for machinery and inventory. The fair value exceeded the book value by $200,000 for machinery...
n December 18, 2017, Stephanie Corporation acquired 100 percent of a Swiss company for 4.0 million...
n December 18, 2017, Stephanie Corporation acquired 100 percent of a Swiss company for 4.0 million Swiss francs (CHF), which is indicative of book and fair value. At the acquisition date, the exchange rate was $1.00 = CHF 1. On December 18, 2017, the book and fair values of the subsidiary’s assets and liabilities were: Cash CHF 817,000 Inventory 1,317,000 Property, plant & equipment 4,017,000 Notes payable (2,134,000 ) Stephanie prepares consolidated financial statements on December 31, 2017. By that...
On December 18, 2017, Stephanie Corporation acquired 100 percent of a Swiss company for 4.0 million Swiss francs (CHF),...
On December 18, 2017, Stephanie Corporation acquired 100 percent of a Swiss company for 4.0 million Swiss francs (CHF), which is indicative of book and fair value. At the acquisition date, the exchange rate was $1.00 = CHF 1. On December 18, 2017, the book and fair values of the subsidiary’s assets and liabilities were: Cash CHF 813,000 Inventory 1,313,000 Property, plant & equipment 4,013,000 Notes payable (2,126,000 ) Stephanie prepares consolidated financial statements on December 31, 2017. By that...
Barton Corp acquired 100% of Google Inc. on January 1, 2020, in exchange for cash. The...
Barton Corp acquired 100% of Google Inc. on January 1, 2020, in exchange for cash. The book value of Google's individual assets and Liabilities approximated their acquisition-date fair values. On the date of acquisition, Google reported the following cash 350,000 Current Liabilities 120,000 Inventory 100,000 Plant Assets 320,000 Common Stock 100,000 Property 500,000 Retained Earnings 1,050,000 Total Assets 1,270,000 Total Liabilities & Equities 1,270,000 During the year google inc. reported 310,000 in net income and declared 15,000 in dividends. Barton...
Park Corporation acquired the voting stock of Sequoia Company on January 1, 2020 for $25 million...
Park Corporation acquired the voting stock of Sequoia Company on January 1, 2020 for $25 million in cash and stock. At the date of acquisition, Sequoia's book value totaled $3 million, consisting of $1.6 million in capital stock, $1.8 million in retained earnings, and $400,000 in accumulated other comprehensive losses. Sequoia's reported net assets at the date of acquisition were carried at amounts approximating fair value, except its inventory was overvalued by $500,000 (sold in 2020), its plant assets (10-year...
pleass answer 13 until 19 . thank you ollows. The mar December 31, 2012 j. Paid cash for prepare P9-4 Nineteen...
pleass answer 13 until 19 . thank you
ollows. The mar December 31, 2012 j. Paid cash for prepare P9-4 Nineteen measures of liquidity, solvency, and profitability The comparative financial statements of Tec Solutions Inc. are as follow ket price of Tec Solutions Inc, common stock was $89.75 on December TEC SOLUTIONS INC. Comparative Income Statement For the Years Ended December 31, 2012 and 2011 2012 Sales Sales returns and allowances Net sales Cost of goods sold Gross profit Selling...
On December 18, 2017, Stephanie Corporation acquired 100 percent
of a Swiss company for 4.0 million Swiss francs (CHF), which is
indicative of book and fair value. At the acquisition date, the
exchange rate was $1.00 = CHF 1. On December 18, 2017, the book and
fair values of the subsidiary’s assets and liabilities were:
Cash
CHF
814,000
Inventory
1,314,000
Property, plant & equipment
4,014,000
Notes payable
(2,128,000
)
Stephanie prepares consolidated financial statements on December
31, 2017. By that...
3. Potter, Inc., acquires 10% of Weasley Corporation on January 1, 2020, for $300,000. During 2020, Weasley reported net income of $250,000 and paid total dividends of $50,000. On January 1, 2021, Potter purchased an additional 30% of Weasley for $900,000. During 2021, Weasley reported net income of $420,000 and paid dividends of $20,000. Required: a. Prepare the January 1, 2021 entry to adjust the equity investment account for the initial adoption of the Equity Method. b. Compute the balance...
Problem 4 (20 pts) On January 1, 2020, Jordan Inc. purchased 30% of the outstanding common stock of Melody Corporation at a cost of $600,000. Melody Corporation had 800,000 shares of common stock outstanding. At the date of purchase, the book value of Melody's net assets was $1,500,000. Book value and fair value of net assets were the same for all balance sheet items except for machinery and inventory. The fair value exceeded the book value by $200,000 for machinery...
pleass answer 13 until 19 . thank you
ollows. The mar December 31, 2012 j. Paid cash for prepare P9-4 Nineteen measures of liquidity, solvency, and profitability The comparative financial statements of Tec Solutions Inc. are as follow ket price of Tec Solutions Inc, common stock was $89.75 on December TEC SOLUTIONS INC. Comparative Income Statement For the Years Ended December 31, 2012 and 2011 2012 Sales Sales returns and allowances Net sales Cost of goods sold Gross profit Selling...
Most questions answered within 3 hours.
-
What is meant by a “term premium”?
What can explain such a premium? Is it a...
asked 54 minutes ago -
23. Which molecule has only covalent bonds? A. CO2 B. Al2O3 C.
Mg3N2
24. The octet...
asked 1 hour ago -
the
total pressure for a mixture of N2O4 and NO2 is 2.20 atm. If Kp=
7.10...
asked 1 hour ago -
Delaware Corp. prepared a master budget that included $22,385
for direct materials, $28,600 for direct labor,...
asked 1 hour ago -
For pesticide HCB (hexachlorobenzene), its logarithmic partition
coefficient log Kow is 5.6. What would be the...
asked 1 hour ago -
A chemist requires 0.422 mil Na2CO3 for a reaction. How many
grams does this correspond to?
asked 1 hour ago -
If the vapor pressure of carvone is approximately 9.4 torr at 99
°C, approximately how much...
asked 1 hour ago -
A juice bottling company is carrying out a test at 10%
significance that the mean population...
asked 1 hour ago -
What is the reflectivity (in percent) needed to keep water at a
temperature near its freezing...
asked 1 hour ago -
Suppose that the average surface temperature of Earth is 300K.
Assume this is uniform over its...
asked 2 hours ago -
Draw the condensed structural formula for alkenes and alkynes or
the line-angle structural formula for cycloalkenes...
asked 1 hour ago -
M. Laing has suggested a new arrangement of the periodic table
(J.Chem.Ed.1989, 66,
746). Answer the following...
asked 2 hours ago