On January 1, 2016, Parflex Corporation exchanged $344,000 cash for 90 percent of Eagle Corporation’s outstanding voting stock. Eagle’s acquisition date balance sheet follows:
| Cash and receivables | $ | 15,000 | Liabilities | $ | 76,000 | ||
| Inventory | 35,000 | Common stock | 150,000 | ||||
| Property and equipment (net) | 350,000 | Retained earnings | 174,000 | ||||
| $ | 400,000 | $ | 400,000 | ||||
On January 1, 2016, Parflex prepared the following fair-value allocation schedule:
| Consideration transferred by Parflex | $ | 344,000 | |
| 10% noncontrolling interest fair value | 36,000 | ||
| Fair value of Eagle | 380,000 | ||
| Book value of Eagle | 324,000 | ||
| Excess fair over book value | 56,000 | ||
| to equipment (undervalued, remaining life of 9 years) | 18,000 | ||
| to goodwill (indefinite life) | $ | 38,000 | |
The companies’ financial statements for the year ending December 31, 2018, follow:
| Parflex | Eagle | ||||||
| Sales | $ | (862,000 | ) | $ | (366,000 | ) | |
| Cost of goods sold | 515,000 | 209,000 | |||||
| Depreciation expense | 191,200 | 67,000 | |||||
| Equity in Eagle's earnings | (79,200 | ) | 0 | ||||
| Separate company net income | $ | (235,000 | ) | $ | (90,000 | ) | |
| Retained earnings 1/1 | $ | (500,000 | ) | $ | (278,000 | ) | |
| Net income | (235,000 | ) | (90,000 | ) | |||
| Dividends declared | 130,000 | 27,000 | |||||
| Retained earnings 12/31 | $ | (605,000 | ) | $ | (341,000 | ) | |
| Cash and receivables | $ | 135,000 | $ | 82,000 | |||
| Inventory | 255,000 | 136,000 | |||||
| Investment in Eagle | 488,900 | 0 | |||||
| Property and equipment (net) | 964,000 | 328,000 | |||||
| Total assets | $ | 1,842,900 | $ | 546,000 | |||
| Liabilities | $ | (722,900 | ) | $ | (55,000 | ) | |
| Common stock—Parflex | (515,000 | ) | 0 | ||||
| Common stock—Eagle | 0 | (150,000 | ) | ||||
| Retained earnings 12/31 | (605,000 | ) | (341,000 | ) | |||
| Total liabilities and owners' equity | $ | (1,842,900 | ) | $ | (546,000 | ) | |
At year-end, there were no intra-entity receivables or payables.
1. Determine the amounts that should appear on Parflex’s December 31, 2018, consolidated statement of financial position and its 2018 consolidated income statement. Picture of consolidation worksheet is below.
Homework Answers
total sales of subsidaries to
be added to make consolidated statements and share of non
controlling intrest 9000 should be added to non controlling intrest
in the balance sheet
Add Answer to:
On January 1, 2016, Parflex Corporation exchanged $344,000 cash
for 90 percent of Eagle Corporation’s outstanding...
On January 1, 2016, Parflex Corporation exchanged $344,000 cash for 90 percent of Eagle Corporation’s outstanding...
On January 1, 2016, Parflex Corporation exchanged $344,000 cash for 90 percent of Eagle Corporation’s outstanding voting stock. Eagle’s acquisition date balance sheet follows: Cash and receivables $ 15,000 Liabilities $ 76,000 Inventory 35,000 Common stock 150,000 Property and equipment (net) 350,000 Retained earnings 174,000 $ 400,000 $ 400,000 On January 1, 2016, Parflex prepared the following fair-value allocation schedule: Consideration transferred by Parflex $ 344,000 10% noncontrolling interest fair value 36,000 Fair value of Eagle 380,000 Book value of...
On January 1, 2017, Paloma Corporation exchanged $1,710,000 cash for 90 percent of the outstanding voting...
On January 1, 2017, Paloma Corporation exchanged $1,710,000 cash for 90 percent of the outstanding voting stock of San Marco Company. The consideration transferred by Paloma provided a reasonable basis for assessing the total January 1, 2017, fair value of San Marco Company. At the acquisition date, San Marco reported the following owners' equity amounts in its balance sheet Common stock Additional paid-in capital Retained earnings $400,000 60,000 265,000 In determining its acquisition offer, Paloma noted that the values for...
PROBLEM 2: (27 points) On January 1, 2016 Lennier Corporation exchanged $344,000 cash for a 90%...
PROBLEM 2: (27 points) On January 1, 2016 Lennier Corporation exchanged $344,000 cash for a 90% interest in Talia Corporation’s outstanding voting stock. Klingon’s acquisition balance sheet is in the accompanying Excel spreadsheet along with the financial statements for both companies for the year ended December 31, 2018. On January 1, 2016, Lennier prepared the following fair value allocation schedule: Consideration transferred by Lennier......................................... 344,000 10% noncontrolling interest fair value....................................... 36,000 Fair value of Talia....................................................................... 380,000 Book value of Talia..................................................................... 324,000...
On January 1, 2020, Paloma Corporation exchanged $1,710,000 cash for 90 percent of the outstanding voting...
On January 1, 2020, Paloma Corporation exchanged $1,710,000 cash for 90 percent of the outstanding voting stock of San Marco Company. The consideration transferred by Paloma provided a reasonable basis for assessing the total January 1, 2020, fair value of San Marco Company. At the acquisition date, San Marco reported the following owners' equity amounts in its balance sheet: Common stock Additional paid-in capital Retained earnings $400,000 60,000 265,000 In determining its acquisition offer, Paloma noted that the values for...
Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, in exchange for $423,000...
Pitino acquired 90 percent of Brey's outstanding shares on
January 1, 2016, in exchange for $423,000 in cash. The subsidiary's
stockholders' equity accounts totaled $407,000 and the
noncontrolling interest had a fair value of $47,000 on that day.
However, a building (with a ten-year remaining life) in Brey's
accounting records was undervalued by $31,000. Pitino assigned the
rest of the excess fair value over book value to Brey's patented
technology (four-year remaining life).
Brey reported net income from its own...
37. On January 1, 2017. Paloma Corporation exchanged $1.710.000 cash for 90 percent of the cut-...
37. On January 1, 2017. Paloma Corporation exchanged $1.710.000 cash for 90 percent of the cut- standing voting stock of San Marco Company. The consideration transferred by Paloma provided a reasonable basis for assessing the total January 1, 2017, fair value of San Marco Company. At the acquisition date, San Marco reported the following owners' equity amounts in its balance sheet: Common stock .... $400.000 Additional paid-in capital........ 60.000 Retained earnings. 265,000 In determining its acquisition offer, Paloma noted that...
On January 1, 2017, Pinnacle Corporation exchanged $3,608,000 cash for 100 percent of the outstanding voting...
On January 1, 2017, Pinnacle Corporation exchanged $3,608,000 cash for 100 percent of the outstanding voting stock of Strata Corporation. On the acquisition date, Strata had the following balance sheet: Cash $ 159,000 Accounts payable $ 376,000 Accounts receivable 308,000 Long-term debt 2,760,000 Inventory 434,000 Common stock 1,500,000 Buildings (net) 2,000,000 Retained earnings 1,465,000 Licensing agreements 3,200,000 $ 6,101,000 $ 6,101,000 Pinnacle prepared the following fair-value allocation: Fair value of Strata (consideration transferred) $ 3,608,000 Carrying amount acquired 2,965,000 Excess...
On January 1, 2018 Casey Corporation exchanged $3,205,000 cash for 100 percent of the outstanding voting...
On January 1, 2018 Casey Corporation exchanged $3,205,000 cash for 100 percent of the outstanding voting stock of Kennedy Corporation. Casey plans to maintain Kennedy as a wholly owned subsidiary with separate legal status and accounting information systems. At the acquisition date. Casey prepared the following fair-value allocation schedule: Fair value of Kennedy (consideration transferred) Carrying amount acquired Excess fair value to buildings (undervalued) to licensing agreements (overvalued) to goodwill indefinite life) $ 3,205,000 2,600,000 $ 605,000 $ 323,000 (191,000)...
On January 1, 2017, Pinnacle Corporation exchanged $3,767,500 cash for 100 percent of the outstanding voting...
On January 1, 2017, Pinnacle Corporation exchanged $3,767,500 cash for 100 percent of the outstanding voting stock of Strata Corporation. On the acquisition date, Strata had the following balance sheet: Cash $ 315,000 Accounts payable $ 403,000 Accounts receivable 355,000 Long-term debt 3,050,000 Inventory 433,000 Common stock 1,500,000 Buildings (net) 2,250,000 Retained earnings 1,545,000 Licensing agreements 3,145,000 $ 6,498,000 $ 6,498,000 Pinnacle prepared the following fair-value allocation: Fair value of Strata (consideration transferred) $ 3,767,500 Carrying amount acquired 3,045,000 Excess...
On January 1, 2018, Brooks Corporation exchanged $1,183,000 fair-value consideration for all of the outstanding voting...
On January 1, 2018, Brooks Corporation exchanged $1,183,000 fair-value consideration for all of the outstanding voting stock of Chandler, Inc. At the acquisition date, Chandler had a book value equal to $1,105,000. Chandler’s individual assets and liabilities had fair values equal to their respective book values except for the patented technology account, which was undervalued by $204,000 with an estimated remaining life of six years. The Chandler acquisition was Brooks’s only business combination for the year. In case expected synergies...
On January 1, 2017, Paloma Corporation exchanged $1,710,000 cash for 90 percent of the outstanding voting stock of San Marco Company. The consideration transferred by Paloma provided a reasonable basis for assessing the total January 1, 2017, fair value of San Marco Company. At the acquisition date, San Marco reported the following owners' equity amounts in its balance sheet Common stock Additional paid-in capital Retained earnings $400,000 60,000 265,000 In determining its acquisition offer, Paloma noted that the values for...
On January 1, 2020, Paloma Corporation exchanged $1,710,000 cash for 90 percent of the outstanding voting stock of San Marco Company. The consideration transferred by Paloma provided a reasonable basis for assessing the total January 1, 2020, fair value of San Marco Company. At the acquisition date, San Marco reported the following owners' equity amounts in its balance sheet: Common stock Additional paid-in capital Retained earnings $400,000 60,000 265,000 In determining its acquisition offer, Paloma noted that the values for...
Pitino acquired 90 percent of Brey's outstanding shares on
January 1, 2016, in exchange for $423,000 in cash. The subsidiary's
stockholders' equity accounts totaled $407,000 and the
noncontrolling interest had a fair value of $47,000 on that day.
However, a building (with a ten-year remaining life) in Brey's
accounting records was undervalued by $31,000. Pitino assigned the
rest of the excess fair value over book value to Brey's patented
technology (four-year remaining life).
Brey reported net income from its own...
37. On January 1, 2017. Paloma Corporation exchanged $1.710.000 cash for 90 percent of the cut- standing voting stock of San Marco Company. The consideration transferred by Paloma provided a reasonable basis for assessing the total January 1, 2017, fair value of San Marco Company. At the acquisition date, San Marco reported the following owners' equity amounts in its balance sheet: Common stock .... $400.000 Additional paid-in capital........ 60.000 Retained earnings. 265,000 In determining its acquisition offer, Paloma noted that...
On January 1, 2018 Casey Corporation exchanged $3,205,000 cash for 100 percent of the outstanding voting stock of Kennedy Corporation. Casey plans to maintain Kennedy as a wholly owned subsidiary with separate legal status and accounting information systems. At the acquisition date. Casey prepared the following fair-value allocation schedule: Fair value of Kennedy (consideration transferred) Carrying amount acquired Excess fair value to buildings (undervalued) to licensing agreements (overvalued) to goodwill indefinite life) $ 3,205,000 2,600,000 $ 605,000 $ 323,000 (191,000)...
Most questions answered within 3 hours.
-
Mr. and Mrs. Brown report taxable income of $130,000 in 2018. In
addition, they report the...
asked 30 minutes ago -
You capture data by having 8 people fill in 30 small dots on a
piece of...
asked 4 hours ago -
What are the z-values such that 70% of the area lies in the
middle of the...
asked 6 hours ago -
You borrow $29,500 to purchase a brand new car. The interest
rate is 6%, and the...
asked 5 hours ago -
The amount of time it takes an asteroid, whose average distance
from the Sun is 4.70...
asked 6 hours ago -
A 0.289 kg mass slides on a frictionless floor with a speed of
1.34 m/s. The...
asked 6 hours ago -
15.A box contains five red balls, three green balls, and two
yellow balls. Suppose you select...
asked 8 hours ago -
Assume you are given the following for Stackelberg industries:
Return on Assets (ROA) = 8%
Debt...
asked 7 hours ago -
an engineer proposes to use mmWave in 5G network to
increase data rate.
What are the...
asked 7 hours ago -
Explain the idea behind using SEMIJOIN in distributed
query processing.
asked 7 hours ago -
why
is context important in selecting and applying guidelines and
principles for interface design?
illustrate your...
asked 7 hours ago -
In a certain board game, a player rolls two fair six-sided dice
until the player rolls...
asked 8 hours ago