Homework Answers
Depreciation each year for Thomson = $444,000 / 10 = $44,400
Book value when sold = Cost - Accumulated depreciation
= $444,000 - (44,400*2)
= $355,200
Gain for Thomson = $394,400 - $355,200
= $39,200
Depreciation for Stayer = $394,400 / 8 = $49,300
Excess depreciation = $49,300 - $44,400
= $4,900
Net effect = $39,200 - $4,900
= $34,300
The answer is Net income is reduced by $34,300
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Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated. On January 1, 2016,...
Problem 5-9 (LO 5-7) Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated....
Problem 5-9 (LO 5-7) Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated. On January 1, 2016, Thomson acquired a building with a 10-year life for $444,000. Thomson depreciated the building on the straight-line basis assuming no salvage value. On January 1, 2018, Thomson sold this building to Stayer for $394,400. At that time, the building had a remaining life of eight years but still no expected salvage value. In preparing financial statements for 2018, how does...
Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated. On January 1, 2016,...
Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated. On January 1, 2016, Thomson acquired a building with a 10-year life for $410,000. Thomson depreciated the building on the straight-line basis assuming no salvage value. On January 1, 2018, Thomson sold this building to Stayer for $370,400. At that time, the building had a remaining life of eight years but still no expected salvage value. In preparing financial 8, how does this transfer affect the computation of...
Problem 5-9 (LO 5-7) Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated. On January 1...
Problem 5-9 (LO 5-7) Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated. On January 1, 2016, Thomson acquired a building with a 10- year life for $480,000. Thomson depreciated the building on the straight-line basis assuming no salvage value. On January 1, 2018, Thomson sold this building to Stayer for $401,600. At that time, the building had a remaining life of eight years but still no expected salvage value. In preparing financial statements for 2018, how...
On January 1, 2018, Johnsonville Enterprises, Inc. acquired 80 percent of Stayer Company's outstanding common shares in...
On January 1, 2018, Johnsonville Enterprises, Inc. acquired 80 percent of Stayer Company's outstanding common shares in exchange for $3,000,000 cash. The price paid for the 80 percent ownership interest was proportionately representative of the fair value of all of Stayer's shares. At acquisition date, Stayer's books showed assets of $4,200,000 and liabilities of $1,600,000. The recorded assets and liabilities had fair values equal to their individual book values except that a building (10-year remaining life) with book value of...
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Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1,...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $476,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $705,000 and the fair value of the 20 percent noncontrolling interest was $119,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the individual financial records of these two...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1,...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $428,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $585,000 and the fair value of the 20 percent noncontrolling interest was $107,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the individual financial records of these two...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1,...
Protrade Corporation acquired 80 percent of the outstanding
voting stock of Seacraft Company on January 1, 2017, for $612,000
in cash and other consideration. At the acquisition date, Protrade
assessed Seacraft's identifiable assets and liabilities at a
collective net fair value of $765,000 and the fair value of the 20
percent noncontrolling interest was $153,000. No excess fair value
over book value amortization accompanied the acquisition.
The following selected account balances are from the individual
financial records of these two...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1,...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $428,000 In cash and other consideration. At the acquisition date, Protrade assessed Seacraft's Identifiable assets and liabilities at a collective net fair value of $585,000 and the fair value of the 20 percent noncontrolling Interest was $107,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the Individual financial records of these two...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1,...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $428,000 In cash and other consideration. At the acquisition date, Protrade assessed Seacraft's Identifiable assets and liabilities at a collective net fair value of $585,000 and the fair value of the 20 percent noncontrolling Interest was $107,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the Individual financial records of these two...
Problem 5-9 (LO 5-7) Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated. On January 1, 2016, Thomson acquired a building with a 10-year life for $444,000. Thomson depreciated the building on the straight-line basis assuming no salvage value. On January 1, 2018, Thomson sold this building to Stayer for $394,400. At that time, the building had a remaining life of eight years but still no expected salvage value. In preparing financial statements for 2018, how does...
Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated. On January 1, 2016, Thomson acquired a building with a 10-year life for $410,000. Thomson depreciated the building on the straight-line basis assuming no salvage value. On January 1, 2018, Thomson sold this building to Stayer for $370,400. At that time, the building had a remaining life of eight years but still no expected salvage value. In preparing financial 8, how does this transfer affect the computation of...
Problem 5-9 (LO 5-7) Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated. On January 1, 2016, Thomson acquired a building with a 10- year life for $480,000. Thomson depreciated the building on the straight-line basis assuming no salvage value. On January 1, 2018, Thomson sold this building to Stayer for $401,600. At that time, the building had a remaining life of eight years but still no expected salvage value. In preparing financial statements for 2018, how...
On January 1, 2018, Johnsonville Enterprises, Inc. acquired 80 percent of Stayer Company's outstanding common shares in exchange for $3,000,000 cash. The price paid for the 80 percent ownership interest was proportionately representative of the fair value of all of Stayer's shares. At acquisition date, Stayer's books showed assets of $4,200,000 and liabilities of $1,600,000. The recorded assets and liabilities had fair values equal to their individual book values except that a building (10-year remaining life) with book value of...
Protrade Corporation acquired 70 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $399,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's Identifiable assets and liabilities at a collective net fair value of $655,000 and the fair value of the 30 percent noncontrolling Interest was $171,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the Individual financial records of these two...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $476,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $705,000 and the fair value of the 20 percent noncontrolling interest was $119,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the individual financial records of these two...
Protrade Corporation acquired 80 percent of the outstanding
voting stock of Seacraft Company on January 1, 2017, for $612,000
in cash and other consideration. At the acquisition date, Protrade
assessed Seacraft's identifiable assets and liabilities at a
collective net fair value of $765,000 and the fair value of the 20
percent noncontrolling interest was $153,000. No excess fair value
over book value amortization accompanied the acquisition.
The following selected account balances are from the individual
financial records of these two...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $428,000 In cash and other consideration. At the acquisition date, Protrade assessed Seacraft's Identifiable assets and liabilities at a collective net fair value of $585,000 and the fair value of the 20 percent noncontrolling Interest was $107,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the Individual financial records of these two...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $428,000 In cash and other consideration. At the acquisition date, Protrade assessed Seacraft's Identifiable assets and liabilities at a collective net fair value of $585,000 and the fair value of the 20 percent noncontrolling Interest was $107,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the Individual financial records of these two...
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