2. St. Paul Sewer Inc. purchased 70% of Pipestone Pipe Inc. in a Stock Acquisition. The...
2. St. Paul Sewer Inc. purchased 70% of Pipestone Pipe Inc. in a Stock Acquisition. The CEO of St. Paul Sewer Inc. mentioned that there is an accounts receivable due from Pipestone Pipe Inc. in the amount of $12,000. How should St. Paul Sewer Inc. account for this inter-company (affiliated company) receivable? Provide the journal entry with your explanation.
Homework Answers
this is simply a contra entry
So Pipestone Pipe is a Debtor in the books of St.Paul Sewer Inc , meaning it has to receive from pipestone pipe inc
Similarly St. paul sewer inc would be a creditor in the books of pipestone pipe inc, i.e. it as to pay to st. paul sewer inc
in the contra entry we just reverse the entry i.e. the debit account becomes the credit and the credit is changed to debit form the original entry
so on consolidation the following entry will be passed
| Account titles | Debit | Credit |
| Accounts payable (pipestone pipe inc) | 12000 | |
| Accounts receivable(st. Paul sewer inc) | 12000 |
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2. St. Paul Sewer Inc. purchased 70% of Pipestone Pipe Inc. in a
Stock Acquisition. The...
St. Paul Sewer Inc. purchased 70% of Pipestone Pipe Inc. in a Stock Acquisition. The CEO...
St. Paul Sewer Inc. purchased 70% of Pipestone Pipe Inc. in a Stock Acquisition. The CEO of St. Paul Sewer Inc. mentioned that there is an accounts receivable due from Pipestone Pipe Inc. in the amount of $12,000. How should St. Paul Sewer Inc. account for this inter-company (affiliated company) receivable? Provide the journal entry with your explanation.
Minneapolis Manufacturing Inc.’s CEO has asked you to provide the relevant journal entries using the following...
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Minneapolis Manufacturing Inc.’s CEO has asked you to provide the relevant journal entries using the following...
Minneapolis Manufacturing Inc.’s CEO has asked you to provide the relevant journal entries using the following acquisition information. Note: The CEO has not decided whether they will purchase Bloomington Re-Bar Company using the “Asset Acquisition Method” or the “Stock Acquisition Method.” Bloomington Re-Bar Company Book value Fair Value Cash 450,000 450,00 Account Receivable 1,950,000 1,785,000 Inventory 3,650,000 3,250,000 Building(net) 2,500,000 2,600,000 Equipment 3,250,000 2,200,000 Land 110,000 1,500,000 Account payable 2,850,000 3,125,000 ...
Minneapolis Manufacturing Inc.’s CEO has asked you to provide the relevant journal entries using the following...
Minneapolis Manufacturing Inc.’s CEO has asked you to provide the relevant journal entries using the following acquisition information. Note: The CEO has not decided whether they will purchase Bloomington Re-Bar Company using the “Asset Acquisition Method” or the “Stock Acquisition Method.” Bloomington Re-Bar Company Book value Fair Value Cash 450,000 450,00 Account Receivable 1,950,000 1,785,000 Inventory 3,650,000 3,250,000 Building(net) 2,500,000 2,600,000 Equipment 3,250,000 2,200,000 Land 110,000 1,500,000 Account payable 2,850,000 3,125,000 ...
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Problem 7-3B Calculate and record goodwill (LO7-2) Northern Equipment Corporation purchased all the outstanding common stock...
Problem 7-3B Calculate and record goodwill (LO7-2)
Northern Equipment
Corporation purchased all the outstanding common stock of Pioneer
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Exercise 3-9 Peep Inc. acquired 100% of the outstanding common stock of Shy Inc. for $2,433,400 cash and 15,040 shares of its common stock (S2 par value). The stock's market value was $39 on the acquisition date. In addition, Peep Inc. incurred the following direct costs: Accounting fees for the purchase Legal fees for registering the common stock Other legal fees for the acquisition Travel expenses to meet with Shy managers SEC filing fees $15,230 28,310 48,640 4,880 2,000 $99,060...
Problem 7-3A Calculate and record goodwill (LO7-2) Fresh Cut Corporation purchased all the outstanding common stock of...
Problem 7-3A Calculate and record goodwill (LO7-2) Fresh Cut Corporation purchased all the outstanding common stock of Premium Meats for $10,800,000 in cash. The book values and fair values of Premium Meats' assets and liabilities were: Fair Value $ 1,000,000 9,300,000 1,100,000 (1,500,000) (1,500,000) 9,900,000 Book Value 1,200,000 7,900,000 180,000 Accounts Receivable Equipment Patents Notes Payable $7,780,000 Net assets Required: 1. Calculate the amount Fresh Cut should report for goodwill. (Enter your answer in millions rounded to 2 decimal places...
On October 10, Nikle Company purchased supplies for $1,800 on account. On October 25, Nikle Company...
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Northern Equipment Corporation purchased all the outstanding common stock of Pioneer Equipment Rental for $5,560,000 in cash. The book values and fair values of Pioneer's assets and liabilities were: Fair Value $710,000 $ 610,000 4,060,000 4,760,000 190,000 (790,000)(790,000) Book Value Accounts Receivable Buildings Equipment Accounts Payable 100,000 Net assets $4,080,000 4,770,000 Required: 1. Calculate the amount Northern Equipment should report for goodwill Goodwill $1,000 View transaction list Journal entry worksheet Record the acquisition of Pioneer Equipment Rental. Note: Enter debits...
Problem 7-3B Calculate and record goodwill (LO7-2)
Northern Equipment
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