Book value | Fair value | |
Cash equivalents | 110000 | 110000 |
Inventory | 200000 | 220000 |
Land | 80000 | 120000 |
Building | 400000 | 480000 |
Equipment | 210000 | 190000 |
Less: | ||
Accounts payable | -90000 | -90000 |
Bonds payable | -300000 | -300000 |
610000 | 730000 |
Value analysis | parent | NCI | |
Company fair value | 919000 | 700000 | 219000 |
Fair value of net assets excluding goodwill | 730000 | 511000 | 219000 |
Goodwill | 189000 | 0 | |
Gain on acquisition | 189000 |
Determination and distribution of excess schedule | |||
Parent | NCI | ||
Fair value of subsidiary | 730000 | 511000 | 219000 |
Less: Book value of interest acquired | |||
Common stock | 100000 | ||
Paid in access | 160000 | ||
Retained earnings | 350000 | ||
Total equity | 610000 | ||
Interest acquires | 70% | 30% | |
Book value | 610000 | 427000 | 183000 |
Excess of fair value over book value | 120000 | 84000 | 36000 |
Adjustment of identifiable accounts | ||
Account | Adjustment | Woksheet key |
Cash equivalents | 0 | debit d1 |
Inventory | 20000 | debit d2 |
Land | 40000 | debit d3 |
Building | 80000 | debit d4 |
Equipment | -20000 | debit d5 |
Total | 120000 |
Elimination entries | ||
Debit | Credit | |
Common Stock | 100000 | |
Paid in capital excess of par | 160000 | |
Retained earnings | 350000 | |
Difference (cost & book) | 309000 | |
To investment in Starnes | 700000 | |
To non-controliing interest | 219000 | |
Inventory | 20000 | |
Land | 40000 | |
Building | 80000 | |
Goodwill | 189000 | |
To equipment | 20000 | |
To Difference (cost and book) | 309000 |
The first page is the balance sheet and questions. The second page we are supposed to...
Venus Corporation purchases 70% of the common stock of Starnes Company for $700,000. At the time of purchase, Starnes has the following balance sheet: Starnes Company Balance Sheet December 31, 2019 90,000 300,000 Assets Cash equivalents Inventory Land Building (net) Equipment (net) Total Assets Liabilities and Equity 110,000 Accounts Payable 200,000 Bonds Payable 80,000 Stockholder's Equity 400,000 Common Stock ($5 par) 210,000 Paid-in Capital in excess of par Retained Earnings 1,000,000 Total Liabilities and Equity 100,000 160,000 350,000 1,000,000 The...
Venus Corporation purchases 70% of the common stock of Starnes Company for $700,000. At the time of purchase, Starnes has the following balance sheet: Starnes Company Balance Sheet December 31, 2019 90,000 300,000 Assets Cash equivalents Inventory Land Building (net) Equipment (net) Total Assets Liabilities and Equity 110,000 Accounts Payable 200,000 Bonds Payable 80,000 Stockholder's Equity 400,000 Common Stock ($5 par) 210,000 Paid-in Capital in excess of par Retained Earnings 1,000,000 Total Liabilities and Equity 100,000 160,000 350,000 1,000,000 The...
A B D E Venus Corporation purchases 70% of the common stock of Starnes Company for $700,000. At the time of purchase, Starnes has the following balance sheet: Starnes Company Balance Sheet December 31, 2019 90,000 300,000 Assets Cash equivalents Inventory Land Building (net) Equipment (net) $ $ $ $ $ Liabilities and Equity 110,000 Accounts Payable $ 200,000 Bonds Payable $ 80,000 Stockholder's Equity 400,000 Common Stock ($5 par) $ 210,000 Paid-in Capital in excess of par $ Retained...
On December 31, 20X1, Parent Company purchased 80% of the common stock of Subsidiary Company for $280,000. On this date, Subsidiary had total owners' equity of $250,000 (common stock $20,000; other paid-in capital, $80,000; and retained earnings, $150,000). Any excess of cost over book value is due to the under or overvaluation of certain assets and liabilities. Inventory is undervalued $5,000. Land is undervalued $20,000. Buildings and equipment have a fair value which exceeds book value by $30,000. Bonds payable...
Nineteen Company had the following summarized balance sheet on December 31 of the current year: Assets Cash $250,000 Accounts receivable 300,000 Inventory 350,000 Property and plant (net) 500,000 Total $1,400,000 Liabilities and Equity Bonds payable $ 600,000 Common stock, $5 par 300,000 Paid-in capital in excess of par 400,000 Retained earnings 100,000 Total $1,400,000 The fair value of the inventory and property and plant is $500,000 and $750,000, respectively. Bonds payable has a fair...
Consolidation on date of acquisition - Equity method with noncontrolling interest and AAP Assume that a parent company acquires an 80% interest in its subsidiary for a purchase price of $620,800. The excess of the total fair value of the controlling and noncontrolling interests over the book value of the subsidiary's Stockholders' Equity is assigned to a building (in PPE, net) that the parent believes is worth $50,000 more than its book value, an: unrecorded Patent that the parent valued...
Determining ending balances of accounts on the consolidated balance sheet Assume that the parent company acquires its subsidiary by exchanging 55,000 shares of its Common Stock, with a market value on the acquisition date of $40 per share, for all of the outstanding voting shares of the investee. In its analysis of the investee company, the parent values all of the subsidiary's assets and liabilities at an amount equaling their book values except for a building that it feels is...
On January 1, 20X9, Parker acquired 90% of Sanders for $200,000 plus $15,000 in acquisition costs. On the date of acquisition, Sanders had the following balance sheet Sanders Company Balance Sheet January 1, 20x9 Assets Liabilities and Equity Accounts Receivable $40,000 Current Liabilities $110,000 100,000 100,000 Inventory 160,000 Bonds Payable 60,000 Common Stock, $1 par 150,000 Paid-in Capital (20,000) Retained Earnings 50,000 (10,000) 30,000 $460,000 Total Liabilities and Equity Land Buildings Accumulated Depreciation Equipment Accumulated Depreciation Goodwill Total Assets 50,000...
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 retalned 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: Book Value Falr Value Marketable securities $20,200 $45,100 Equipment (net) 119,900 140,000 v (a) 2 Your answer is partially correct. Try again. Prepare...
47. Determining ending balances of accounts on the consolidated balance sheet Common Assume that the parent company acquires its subsidiary by exchanging 75,400 shares of its Snock, with a fair value on the acquisition date of 530 per share, for all of the outstanding voking shares of the investee. In its analysis of the investee and liabilities at an amount equaling their book values except for a building that is undervalued by $4so,000, an unrecorded License Agreement with a fair...