EXCEL CASE 2
On January 1, 2017, Hi-Speed.com acquired 100 percent of the common stock of Wi-Free Co. for cash of $730,000. The consideration transferred was allocated among Wi-Free’s net assets as follows:
Page 151
Wi-Free fair value (cash paid by Hi-Speed) |
$730,000 |
|
Book value of Wi-Free: |
||
Common stock and additional paid-in capital (APIC) |
$130,000 |
|
Retained earnings |
370,000 |
500,000 |
Excess fair value over book value to |
230,000 |
|
In-process R&D |
$ 75,000 |
|
Computer software (overvalued) |
(30,000) |
|
Internet domain name |
120,000 |
165,000 |
Goodwill |
$ 65,000 |
At the acquisition date, the computer software had a 4-year remaining life, and the Internet domain name was estimated to have a 10-year remaining life. By the end of 2017, it became clear that the acquired in-process research and development would yield no economic benefits and Hi-Speed.com recognized an impairment loss. At December 31, 2018, Wi-Free’s accounts payable included a $30,000 amount owed to Hi-Speed.
The December 31, 2018, trial balances for the parent and subsidiary follow:
Hi-Speed.com |
Wi-Free Co. |
|
Revenues |
$ (1,100,000) |
$ (325,000) |
Cost of goods sold |
625,000 |
122,000 |
Depreciation expense |
140,000 |
12,000 |
Amortization expense |
50,000 |
11,000 |
Equity in subsidiary earnings |
(175,500) |
–0– |
Net income |
$ (460,500) |
$ (180,000) |
Retained earnings 1/1/18 |
$ (1,552,500) |
$ (450,000) |
Net income |
(460,500) |
(180,000) |
Dividends declared |
250,000 |
50,000 |
Retained earnings 12/31/18 |
$ (1,763,000) |
$ (580,000) |
Current assets |
$ 1,034,000 |
$ 345,000 |
Investment in Wi-Free |
856,000 |
–0– |
Equipment (net) |
713,000 |
305,000 |
Computer software |
650,000 |
130,000 |
Internet domain name |
–0– |
100,000 |
Goodwill |
–0– |
–0– |
Total assets |
$ 3,253,000 |
$ 880,000 |
Liabilities |
$ (870,000) |
$ (170,000) |
Common stock |
(500,000) |
(110,000) |
Additional paid-in capital |
(120,000) |
(20,000) |
Retained earnings 12/31/18 |
(1,763,000) |
(580,000) |
Total liabilities and equity |
$ (3,253,000) |
$ (880,000) |
Required
Using Excel, prepare calculations showing how Hi-Speed derived the $856,000 amount for its investment in Wi-Free.
Using Excel, compute consolidated balances for Hi-Speed and Wi-Free. Use Worksheet method.
EXCEL CASE 2 On January 1, 2017, Hi-Speed.com acquired 100 percent of the common stock of...
EXCEL CASE 2
On January 1, 2017, Hi-Speed.com acquired 100 percent of the
common stock of Wi-Free Co. for cash of $730,000. The consideration
transferred was allocated among Wi-Free’s net assets as
follows:
Page 151
Wi-Free fair value (cash paid by Hi-Speed)
$730,000
Book value of Wi-Free:
Common stock and additional paid-in capital (APIC)
$130,000
Retained earnings
370,000
500,000
Excess fair value over book value to
230,000
In-process R&D
$ 75,000
Computer software (overvalued)
(30,000)
Internet domain name
120,000
165,000
...
PLEASE ASNWER THIS QUESTION WITH THE EXPLANATION HOW U GET THE
NUMBERS- I want to understand material and plus I have to enter
everything in the EXCEL. Thank you!!!!
EXCEL CASE 2 CPA sklls On January 1. 2017. Hi-Speed.com acquired 100 percent of the common stock of Wi Free Co. for cash of $730,000. The consideration transferred was allocated among Wi-Free's net assets as follows: Page 151 Wi-Free fair value (cash paid by Hi-Speed) Book value of Wi-Free: $730,000 Common...
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