Homework Answers
| Debit | credit | |
| Equity investment(84,000*42) | $3,528,000 | |
| Common stock (84000*2) | $168,000 | |
| APIC (84,000*40) | $3,360,000 |
B. Consolidation journal
| Debit | credit | |
| Common stock | $332,000 | |
| APIC | $377500 | |
| Retained earnings | $1,560,500 | |
| Equity investment | $2,270,000 | |
| Trade mark | $240,000 | |
| Video library | $600,000 | |
| Patented technology | $125,000 | |
| Goodwill (bf) | $293,000 | |
| Equity investment ($3,528,000-$2,270,000) | $1,258,000 |
C. Consolidation spreadsheet
| Parent | subsidiary | Debit | Credit | Consolidated | |||
| Assets | |||||||
| Cash | 514,020 | 265,160 | 779,180 | ||||
| AR | 450,300 | 633,360 | 1,083,660 | ||||
| Inventory | 650,000 | 813,540 | 1,463,540 | ||||
| Equity investment | 3,528,000 | - | (E) | 2,270,000 | 1,258,000 | ||
| (A) | 1,258,000 | (1258,000) | |||||
| PPE (net) | 10,600,000 | 1,955,140 | 12,555,140 | ||||
| Trademark | (A) | 240000 | 240,000 | ||||
| Video library | (A) | 600,000 | 600,000 | ||||
| Patented technology | (A) | 125,000 | 125,000 | ||||
| Goodwill | (A) | 293,000 | 293,000 | ||||
| 15,742,320 | 3,667,200 | 17,139,520 | |||||
| Liabilities and equity | |||||||
| AP | 150,480 | 177,800 | 328,280 | ||||
| Accrued liabilities | 176,640 | 309,400 | 486,040 | ||||
| LTL | 3,840,000 | 910,000 | 4,750,000 | ||||
| Common stock | 428,400 | 332,000 | (E) | 332,000 | 428,400 | ||
| APIC | 3,612,000 | 377,500 | (E) | 377,500 | 3,612,000 | ||
| Retained earnings | 7,534,800 | 1,560,500 | (E) | 1,560,500 | 7,534,800 | ||
| Total liabilities | 15,742,320 | 3,667,200 | 3,528,000 | 3,528,000 | 17,139,520 | ||
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Consolidation at date of acquisition (purchase price greater than book value, acquisition journal entries Assume that...
Consolidation at date of acquisition (purchase price greater than book value, acquisition journal entries Assume that...
Consolidation at date of acquisition (purchase price greater than book value, acquisition journal entries Assume that the parent company acquires its subsidiary by exchanging 84,000 shares of its $2 par value Common Stock, with a fair value on the acquisition date of $42 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...
Consolidation at date of acquisition (purchase price greater than book value, acquisition journal entries Assume that...
Consolidation at date of acquisition (purchase price
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exchanging 84,000 shares of its $2 par value Common Stock, with a
fair value on the acquisition date of $45 per share, for all of the
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investee company, the parent values all of the subsidiary’s assets
and liabilities at an amount equaling their book values except...
Consolidation at date of acquisition (purchase price greater than book value, acquisition journal entries Assume that...
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Consolidation at date of acquisition (purchase price greater than book value, acquisition journal entries Assume that...
Consolidation at date of acquisition (purchase price
greater than book value, acquisition journal entries
Assume that the parent company acquires its subsidiary by
exchanging 84,000 shares of its $2 par value Common Stock, with a
fair value on the acquisition date of $44 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
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Consolidation at date of acquisition (purchase price greater than book value, acquisition journal entries Assume that the parent company acquires its subsidiary by exchanging 84,000 shares of its $2 par value Common Stock, with a fair value on the acquisition date of $42 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...
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