Homework Answers
| 85% | 15% | 100% | ||||
| Parent | NCI | Total | ||||
| Share | Share | Value | ||||
| Purchase price and implied value | $ 5,42,200 | $ 95,682 | $ 6,37,882 | |||
| Book value of equity acquired: | ||||||
| Common stock | 3,42,890 | 60,510 | 4,03,400 | |||
| Retained earnings | 1,17,555 | 20,745 | 1,38,300 | |||
| Total book value | 4,60,445 | 81,255 | 5,41,700 | |||
| Difference between implied and book value | 81,755 | 14,427 | 96,182 | |||
| Marketable securities | (21,165) | (3,735) | (24,900) | |||
| Equipment | (17,085) | (3,015) | (20,100) | |||
| Balance | 43,505 | 7,677 | 51,182 | |||
| Record new goodwill | (43,505) | (7,677) | (51,182) | |||
| Balance | $ - | $ - | $ - | |||
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Exercise 5-1 On January 1, 2013, Pam Company purchased an 85% Interest In Shaw Company for...
Exercise 5-1 On January 1, 2013, Pam Company purchased an 85% interest in Shaw Company for...
Exercise 5-1
On January 1, 2013, Pam Company purchased an 85% interest in Shaw
Company for $541,800. On this date, Shaw Company had common stock
of $398,100 and retained earnings of $143,700.
An examination of Shaw Company’s assets and liabilities revealed
that their book value was equal to their fair value except for
marketable securities and equipment:
Book Value
Fair Value
Marketable securities
$19,800
$44,600
Equipment (net)
120,200
140,000
(a)
Prepare a Computation and Allocation Schedule for the difference
between...
a)prepare a computation and allocation schedule b)The entries to eliminate the investment account: Exercise 5-1 On...
a)prepare a computation and allocation schedule
b)The entries to eliminate the investment account:
Exercise 5-1 On January 1, 2013, Pam Company purchased an 85% Interest in Shaw Company for $542,200. On this date, Shaw Company had common stock of $403,400 and retained earnings of $138,800. An examination of Shaw Company's assets and liabilities revealed that their book value was equal to their fair value except for marketable securities and equipment: Marketable securities Equipment (net) Book Value $20,200 119,900 Fair Value...
5-1 and 5-2 CISE 5-1 interest in Shaw Company for $540,000 Allocation of Cost LO 1...
5-1 and 5-2
CISE 5-1 interest in Shaw Company for $540,000 Allocation of Cost LO 1 LO3 On January 1, 2018, Pam Company purchased an 85% interest in Shaw Company On this date, Shaw Company had common stock of $400,000 and retained carnings of An examination of Shaw Company's assets and liabilities revealed that the equal to their fair value except for marketable securities and equipment: assets and liabilities revealed that their book value was Book Value Fair Value Marketable...
Exercise 5-3 Pace Company purchased 20,000 of the 25,000 shares of Saddler Corporation for $522,100. On...
Exercise 5-3 Pace Company purchased 20,000 of the 25,000 shares of Saddler Corporation for $522,100. On January 3, 2014, the acquisition date, Saddler Corporation's capital stock and retained earnings account balances were $494,200 and $98,500, respectively. The following values were determined for Saddler Corporation on the date of purchase: Inventory Other current assets Marketable securities Plant and equipment Book Value $49,700 201,500 100,800 295,400 Fair Value $69,000 201,500 126,500 326,700 (b) Prepare a Computation and Allocation Schedule for the difference...
Exercise 5-9 On January 1, 2013, Point Corporation acquired an 80% interest in Sharp Company for...
Exercise 5-9 On January 1, 2013, Point Corporation acquired an 80% interest in Sharp Company for $1,986,000. At that time Sharp Company had common stock of $1,511,000 and retained earnings of $709,000. The book values of Sharp Company's assets and liabilities were equal to their fair values except for land and bonds payable. The land had a fair value of $98,000 and a book value of $79,000. The outstanding bonds were issued at par value on January 1, 2008, pay...
On January 1, 2013, Point Corporation acquired an 80% interest in Sharp Company for $1,997,000. At that time Sharp Compa...
On January 1, 2013, Point Corporation acquired an 80% interest
in Sharp Company for $1,997,000. At that time Sharp Company had
common stock of $1,516,000 and retained earnings of $702,000. The
book values of Sharp Company’s assets and liabilities were equal to
their fair values except for land and bonds payable. The land had a
fair value of $99,000 and a book value of $81,000. The outstanding
bonds were issued at par value on January 1, 2008, pay 9% annually,...
Exercise 4-5 On January 1, 2014, Plate Company purchased a 90% interest in the common stock...
Exercise 4-5 On January 1, 2014, Plate Company purchased a 90% interest in the common stock of Set Company for $597,840, an amount $20,400 in excess of the book value of equity acquired. The excess relates to the understatement of Set Company's land holdings. Excerpts from the consolidated retained earnings section of the consolidated statements workpaper for the year ended December 31, 2014, follow: 1/1/14 retained earnings Net income from above Set Company 171,200 119,700 (50,300 ) 240,600 Consolidated Balances...
Exercise 5-4 On January 1, 2015, Porter Company purchased an 80% interest in Salem Company for...
Exercise 5-4 On January 1, 2015, Porter Company purchased an 80% interest in Salem Company for $262,600. On this date, Salem Company had common stock of $ 204,000 and retained earnings of $130,100. An examination of Salem Company's balance sheet revealed the following comparisons between book and fair values: Inventory Other current assets Equipment Land Book Value $30,000 50,600 305,800 199,100 Fair Value $35,200 54,300 356,100 199,100 (b) Prepare the January 1, 2015, consolidated financial statements workpaper entries to eliminate...
Exercise 3-4 On January 1, 2013, Peach Company issued 1,390 of its $20 par value common...
Exercise 3-4
On January 1, 2013, Peach Company issued 1,390 of its $20 par value
common shares with a fair value of $58 per share in exchange for
the 1,870 outstanding common shares of Swartz Company in a purchase
transaction. Registration costs amounted to $1,867, paid in cash.
Just prior to the acquisition, the balance sheets of the two
companies were as follows:
Peach Company
Swartz Company
Cash
$70,580
$13,760
Accounts receivable (net)
95,150
20,050
Inventory
58,210
22,920
Plant and...
Exercise 5-4 On January 1, 2015, Porter Company purchased an 80% interest in Salem Company for...
Exercise 5-4 On January 1, 2015, Porter Company purchased an 80% interest in Salem Company for $262,600. On this date, Salem Company had common stock of $204,000 and retained earnings of $130,100. An examination of Salem Company's balance sheet revealed the following comparisons between book and fair values: Inventory Other current assets Equipment Land Book Value 530,000 50,600 305,800 199,100 Fair Value $35,200 54,300 356,100 199,100 Your answer is partially correct. Try again. Determine the amounts that should be allocated...
Exercise 5-1
On January 1, 2013, Pam Company purchased an 85% interest in Shaw
Company for $541,800. On this date, Shaw Company had common stock
of $398,100 and retained earnings of $143,700.
An examination of Shaw Company’s assets and liabilities revealed
that their book value was equal to their fair value except for
marketable securities and equipment:
Book Value
Fair Value
Marketable securities
$19,800
$44,600
Equipment (net)
120,200
140,000
(a)
Prepare a Computation and Allocation Schedule for the difference
between...
a)prepare a computation and allocation schedule
b)The entries to eliminate the investment account:
Exercise 5-1 On January 1, 2013, Pam Company purchased an 85% Interest in Shaw Company for $542,200. On this date, Shaw Company had common stock of $403,400 and retained earnings of $138,800. An examination of Shaw Company's assets and liabilities revealed that their book value was equal to their fair value except for marketable securities and equipment: Marketable securities Equipment (net) Book Value $20,200 119,900 Fair Value...
5-1 and 5-2
CISE 5-1 interest in Shaw Company for $540,000 Allocation of Cost LO 1 LO3 On January 1, 2018, Pam Company purchased an 85% interest in Shaw Company On this date, Shaw Company had common stock of $400,000 and retained carnings of An examination of Shaw Company's assets and liabilities revealed that the equal to their fair value except for marketable securities and equipment: assets and liabilities revealed that their book value was Book Value Fair Value Marketable...
Exercise 5-3 Pace Company purchased 20,000 of the 25,000 shares of Saddler Corporation for $522,100. On January 3, 2014, the acquisition date, Saddler Corporation's capital stock and retained earnings account balances were $494,200 and $98,500, respectively. The following values were determined for Saddler Corporation on the date of purchase: Inventory Other current assets Marketable securities Plant and equipment Book Value $49,700 201,500 100,800 295,400 Fair Value $69,000 201,500 126,500 326,700 (b) Prepare a Computation and Allocation Schedule for the difference...
Exercise 5-9 On January 1, 2013, Point Corporation acquired an 80% interest in Sharp Company for $1,986,000. At that time Sharp Company had common stock of $1,511,000 and retained earnings of $709,000. The book values of Sharp Company's assets and liabilities were equal to their fair values except for land and bonds payable. The land had a fair value of $98,000 and a book value of $79,000. The outstanding bonds were issued at par value on January 1, 2008, pay...
On January 1, 2013, Point Corporation acquired an 80% interest
in Sharp Company for $1,997,000. At that time Sharp Company had
common stock of $1,516,000 and retained earnings of $702,000. The
book values of Sharp Company’s assets and liabilities were equal to
their fair values except for land and bonds payable. The land had a
fair value of $99,000 and a book value of $81,000. The outstanding
bonds were issued at par value on January 1, 2008, pay 9% annually,...
Exercise 4-5 On January 1, 2014, Plate Company purchased a 90% interest in the common stock of Set Company for $597,840, an amount $20,400 in excess of the book value of equity acquired. The excess relates to the understatement of Set Company's land holdings. Excerpts from the consolidated retained earnings section of the consolidated statements workpaper for the year ended December 31, 2014, follow: 1/1/14 retained earnings Net income from above Set Company 171,200 119,700 (50,300 ) 240,600 Consolidated Balances...
Exercise 5-4 On January 1, 2015, Porter Company purchased an 80% interest in Salem Company for $262,600. On this date, Salem Company had common stock of $ 204,000 and retained earnings of $130,100. An examination of Salem Company's balance sheet revealed the following comparisons between book and fair values: Inventory Other current assets Equipment Land Book Value $30,000 50,600 305,800 199,100 Fair Value $35,200 54,300 356,100 199,100 (b) Prepare the January 1, 2015, consolidated financial statements workpaper entries to eliminate...
Exercise 3-4
On January 1, 2013, Peach Company issued 1,390 of its $20 par value
common shares with a fair value of $58 per share in exchange for
the 1,870 outstanding common shares of Swartz Company in a purchase
transaction. Registration costs amounted to $1,867, paid in cash.
Just prior to the acquisition, the balance sheets of the two
companies were as follows:
Peach Company
Swartz Company
Cash
$70,580
$13,760
Accounts receivable (net)
95,150
20,050
Inventory
58,210
22,920
Plant and...
Exercise 5-4 On January 1, 2015, Porter Company purchased an 80% interest in Salem Company for $262,600. On this date, Salem Company had common stock of $204,000 and retained earnings of $130,100. An examination of Salem Company's balance sheet revealed the following comparisons between book and fair values: Inventory Other current assets Equipment Land Book Value 530,000 50,600 305,800 199,100 Fair Value $35,200 54,300 356,100 199,100 Your answer is partially correct. Try again. Determine the amounts that should be allocated...
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