Homework Answers
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Goodwill to be recorded = Consideration paid - Fair value of net assets = 11 - (9-3) = 11 - 6 = 5 |
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Answer: 7. CPA Multiple Choice Question 04 Large purchased all of Small's voting stock for $11...
QUESTION 23 On January 3, 2020, Bob Corp. purchased 25% of the voting common stock of...
QUESTION 23 On January 3, 2020, Bob Corp. purchased 25% of the voting common stock of Jeremy Co., paying $2,400. Bob decided to use the equity method to account for this Investment. At the time of the investment, Jeremy's total stockholders' equity was 58,000. Bob gathered the following information about Jeremy's assets and liabilities: Buildings (10-year life) Equipment (6-year life) Franchises (8-year life) Book Value $ 400 1,000 $ 0 Fair Value $ 500 1,300 $ 400 For all other...
on On January 3, 2021, Madison Corp. purchased 30% of the voting common stock of Huntsville...
on On January 3, 2021, Madison Corp. purchased 30% of the voting common stock of Huntsville Co., paying $3,000,000. Madison decided to use the equity method to account for this investment. At the time of the investment, Huntsville's total stockholders' equity was $8,000,000. Madison gathered the following information about Huntsville's assets and liabilities: Book Value Fair Value Buildings (10-year life) $400,000 $600,000 Equipment (5-year life) 1,200,000 1,400,000 Franchises (8-year life) $0 $480,000 For all other assets and liabilities, book value...
On January 3, 2021, Madison Corp. purchased 30% of the voting common stock of Huntsville Co.,...
On January 3, 2021, Madison Corp. purchased 30% of the voting common stock of Huntsville Co., paying $3,000,000. Madison decided to use the equity method to account for this investment. At the time of the investment, Huntsville’s total stockholders’ equity was $8,000,000. Madison gathered the following information about Huntsville’s assets and liabilities: Book Value Fair Value Buildings (10-year life) $ 400,000 $ 600,000 Equipment (5-year life) 1,200,000 1,400,000 Franchises (8-year life) $ 0 $ 480,000 For all other assets and...
QUESTION 22 On January 3, 2020, Bob Corp. purchased 25% of the voting common stock of...
QUESTION 22 On January 3, 2020, Bob Corp. purchased 25% of the voting common stock of Jeremy Co. paying $2,400. Bob decided to use the equity method to account for this investment. At the time of the investment Jeremy's total stockholders' equity was $8,000. Bob gathered the following information about Jeremy's assets and liabilities: Buildings (10 year life) Equipment (6-year life) Franchises (8-year life) Book Value $ 400 1.000 $ 0 Fair Value 5 500 1,300 $ 400 For all...
Use the following facts for Multiple Choice problems 38 and 39: Assume on January 1, 2019,...
Use the following facts for Multiple Choice problems 38 and 39: Assume on January 1, 2019, an investor company acquired 100% of the outstanding voting common stock of an investee company. The following financial statement information is for the investor company and the investee company on January 1, 2019, prepared immediately before this transaction. Book Values Investor Investee Receivables & inventories Land.. Property & equipment, net Total assets. $ 100,000 200,000 225,000 $ 525,000 $ 50.000 +10 80,000 - 5...
On January 1, 2019, X Inc. purchased 25% of the voting shares of Y Inc. for...
On January 1, 2019, X Inc. purchased 25% of the voting shares of Y Inc. for $100,000. The investment is reported using the equity method, as X has significant influence over Y. Y's net income and declared dividends for the following three years are as follows: Net Income Dividends 2019 $50,000 $20,000 2020 $70,000 $80,000 2021 $30,000 $60,000 What would be the carrying value of X's Investment in Y at the end of 2021? Multiple Choice $100,000 $91,200 $97,500 $98,800...
Assume that on January 1, 2013, an investor company acquired 100% of the outstanding voting common...
Assume that on January 1, 2013, an investor company acquired 100% of the outstanding voting common stock of an investee company. The following financial statement information is for the investor company and the investee company on January 1, 2013, prepared immediately before this transaction. Book Values Investor Investee Receivables & inventaries $150,000 $75,000 Land 300,000 150,000 Property & equipment 337,500 150,000 Total assets $787,500 $375,000 Liabilities $225,000 $120,000 Common stock ($2 par) 30,000 15,000 Additional paid-in capital 420,000 225,000 Retained...
Porwal Parts acquires all the voting stock of Stonegate Supplies for $40 million. Stonegate's book value...
Porwal Parts acquires all the voting stock of Stonegate Supplies for $40 million. Stonegate's book value was $10 million at the date of acquisition. Stonegate's assets and liabilities are carried at amounts approximating fair value, but it has previously unrecognized brand names valued at $8,000,000. Consolidation eliminating entry (R), at the date of acquisition, includes a(n): A. $32 million debit to goodwill B. $10 million debit to Stonegate's equity accounts C. $40 million credit to the investment account D. $8...
Q1-5 Multiple Choice Questions (20 points) Circle the right answer 1) Which of the following is...
Q1-5
Multiple Choice Questions (20 points) Circle the right answer 1) Which of the following is the CORRECT accounting equation? A) Assets + Liabilities - Owners' equity B) Assets - Liabilities + Owners' equity C) Assets + Revenue - Owners' equity D) Assets + Revenue Liabilities + Expenses 2) Owner's equity is $150,000 and total liabilities are $90,000. Total assets would be: A) $300.000 B) S180,000. C) $60,000. D) $240,000 150, 900 90,000 3) A business settles a liability by...
Pacific Inc. acquires all of the voting stock of Skye Company for $300 million in cash....
Pacific Inc. acquires all of the voting stock of Skye Company for $300 million in cash. Skye's balance sheet at the date of acquisition is as follows (in millions): Skye Company Assets Liabilities & equity Current assets $ 75 Current liabilities $ 80 Land, buildings & equipment, net 1,200 Long-term liabilities 1,500 Capital stock 100 Retained deficit (400) Accumulated other comprehensive income 10 _____ Treasury stock (15) Total assets $1,275 Total liabilities & equity $1,275 Skye's land, buildings & equipment...
QUESTION 23 On January 3, 2020, Bob Corp. purchased 25% of the voting common stock of Jeremy Co., paying $2,400. Bob decided to use the equity method to account for this Investment. At the time of the investment, Jeremy's total stockholders' equity was 58,000. Bob gathered the following information about Jeremy's assets and liabilities: Buildings (10-year life) Equipment (6-year life) Franchises (8-year life) Book Value $ 400 1,000 $ 0 Fair Value $ 500 1,300 $ 400 For all other...
on On January 3, 2021, Madison Corp. purchased 30% of the voting common stock of Huntsville Co., paying $3,000,000. Madison decided to use the equity method to account for this investment. At the time of the investment, Huntsville's total stockholders' equity was $8,000,000. Madison gathered the following information about Huntsville's assets and liabilities: Book Value Fair Value Buildings (10-year life) $400,000 $600,000 Equipment (5-year life) 1,200,000 1,400,000 Franchises (8-year life) $0 $480,000 For all other assets and liabilities, book value...
QUESTION 22 On January 3, 2020, Bob Corp. purchased 25% of the voting common stock of Jeremy Co. paying $2,400. Bob decided to use the equity method to account for this investment. At the time of the investment Jeremy's total stockholders' equity was $8,000. Bob gathered the following information about Jeremy's assets and liabilities: Buildings (10 year life) Equipment (6-year life) Franchises (8-year life) Book Value $ 400 1.000 $ 0 Fair Value 5 500 1,300 $ 400 For all...
Use the following facts for Multiple Choice problems 38 and 39: Assume on January 1, 2019, an investor company acquired 100% of the outstanding voting common stock of an investee company. The following financial statement information is for the investor company and the investee company on January 1, 2019, prepared immediately before this transaction. Book Values Investor Investee Receivables & inventories Land.. Property & equipment, net Total assets. $ 100,000 200,000 225,000 $ 525,000 $ 50.000 +10 80,000 - 5...
Assume that on January 1, 2013, an investor company acquired 100% of the outstanding voting common stock of an investee company. The following financial statement information is for the investor company and the investee company on January 1, 2013, prepared immediately before this transaction. Book Values Investor Investee Receivables & inventaries $150,000 $75,000 Land 300,000 150,000 Property & equipment 337,500 150,000 Total assets $787,500 $375,000 Liabilities $225,000 $120,000 Common stock ($2 par) 30,000 15,000 Additional paid-in capital 420,000 225,000 Retained...
Q1-5
Multiple Choice Questions (20 points) Circle the right answer 1) Which of the following is the CORRECT accounting equation? A) Assets + Liabilities - Owners' equity B) Assets - Liabilities + Owners' equity C) Assets + Revenue - Owners' equity D) Assets + Revenue Liabilities + Expenses 2) Owner's equity is $150,000 and total liabilities are $90,000. Total assets would be: A) $300.000 B) S180,000. C) $60,000. D) $240,000 150, 900 90,000 3) A business settles a liability by...
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