Homework Answers
| Journal entries | |||
| a | Debit | Credit | |
| Equity investment | 400000 | ||
| To cash | 400000 | ||
| initial investments | |||
| Equity investments | 41500 | ||
| To income from subsidiary | 41500 | ||
| (to record net income) | |||
| Cash | 13650 | ||
| To equity investment | 13650 | ||
| (dividends received) |
| b | Equity investment | |||
| Particulars | Amount | Particulars | Amount | |
| Beg balance | 0 | dividend | 13650 | |
| Cash | 400000 | Balance | 427850 | |
| Income from subsidiary | 41500 | |||
| 441500 | 441500 |
| C | consolidation entries | ||
| Income from subsidiary | 41500 | ||
| To dividends | 13650 | ||
| To equity investment | 27850 | ||
| Common stock | 21900 | ||
| Retained earnings at 1/1 | 38500 | ||
| Additional paid in capital | 219600 | ||
| Difference (cost & book) | 120000 | ||
| To equity investment | 400000 | ||
| Goodwill | 120000 | ||
| To difference (cost & book) | 120000 |
| Income statement | |||||
| Morningside co | Glacier industries | Debit | Credit | Consolidated | |
| Sales revenue | 850000 | 400000 | 1250000 | ||
| Cost of goods sold | -635000 | -268000 | -903000 | ||
| Gross profit | 215000 | 132000 | 347000 | ||
| operating expense | -156400 | -90500 | -246900 | ||
| Equity income | 41500 | 41500 | 0 | ||
| Net income | 100100 | 41500 | 100100 | ||
| Retained earnings | Morningside co | Glacier industries | Debit | Credit | Consolidated |
| Reatined earnings 1/1 | 550000 | 219600 | 219600 | 550000 | |
| Net income | 100100 | 41500 | 41500 | 100100 | |
| Dividends | -41000 | -13650 | -13650 | -41000 | |
| Retained earnings 31/12 | 609100 | 247450 | 609100 | ||
| Balancesheet | |||||
| Morningside co | Glacier industries | Debit | Credit | Consolidated | |
| Cash and receivables | 450000 | 25000 | 475000 | ||
| inventory | 355000 | 12570 | 367570 | ||
| Equity investment | 427850 | 427850 | 0 | ||
| propoerty plant and equipment | 751950 | 412390 | 1164340 | ||
| Goodwill | 120000 | 120000 | |||
| total assets | 1984800 | 449960 | 2126910 | ||
| Accounts payable | 371200 | 54000 | 425200 | ||
| Accrued liabilities | 487500 | 68110 | 555610 | ||
| Notes payable | 20000 | 20000 | |||
| Common stock | 30000 | 21900 | 21900 | 30000 | |
| additional paid in capital | 487000 | 38500 | 38500 | 487000 | |
| retained earnings | 609100 | 247450 | 247450 | 609100 | |
| total liabilities | 1984800 | 449960 | 2126910 |
Add Answer to:
8-Morningside Co. acquires, at book value, Glacier Industries on January 2, 2019, by issuing 40,000 common...
1) The balance of common stock of S Co. at acquisition date was: * a) $1,625,000...
1) The balance of common stock of S Co. at acquisition
date was: *
a) $1,625,000
b) $1,850,000
c) $2,000,000
d) $1,960,000
2) The eliminating entries for a consolidated statements workpaper
on December 31, 2019, will include: *
a) Debit Investment in S Co. $2,080,000
b) Credit Retained Earnings $600,000
c) Credit Dividends Declared $160,000
d) Debit Dividend Income $128,000
3) The difference between implied and book value at acquisition
date was: *
a) $120,000
b) $175,000
c) $125,000
d)...
Haynes, Inc. obtained 100% of Turner Company's common stock on January 1, 2018, by issuing 50,000...
Haynes, Inc. obtained 100% of Turner Company's common stock on January 1, 2018, by issuing 50,000 shares of common stock that was trading at $35 per share. The acquisition agreement also contained a contingent consideration clause to which Haynes assigned a fair value of $100,000. On January 1, 2018, Turner reported a net book value of $1,500,000. However, Equipment (5-year life) was undervalued by $150,000. Also, Turner had research and development in process with an assessed value of $100,000, although...
Assume that on January 1, 2017, Company P acquires 70% of the common stock of Company...
Assume that on January 1, 2017, Company P acquires 70% of the
common stock of Company S by paying $7,000 in cash to the
shareholders of Company S. The preacquisition balance sheets and
income statements of Company P and Company S are shown below.
Prepare Company P's post-acquisition B/S right afer the acquisition
(Jan. 1) and at the end of the year of 2017 by the equity and
acquisition method s. Also, prepare Company P's post-acquisition
I/S for the year...
On January 1, 2018, Brooks Corporation exchanged $1,177,000 fair-value consideration for all of the outstanding voting...
On January 1, 2018, Brooks Corporation exchanged $1,177,000 fair-value consideration for all of the outstanding voting stock of Chandler, Inc. At the acquisition date, Chandler had a book value equal to $1,100,000. 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 $252,000 with an estimated remaining life of six years. The Chandler acquisition was Brooks’s only business combination for the year. In case expected synergies...
28. Plaza, Inc., acquires 80 percent of the outstanding common stock of Stanford Corporation on January...
28. Plaza, Inc., acquires 80 percent of the outstanding common stock of Stanford Corporation on January 1, 2018, in exchange for $900,000 cash. At the acquisition date, Stanford’s total fair value, including the noncontrolling interest, was assessed at $1,125,000. Also at the acquisition date, Stanford’s book value was $690,000. Several individual items on Stanford’s financial records had fair values that differed from their book values as follows: BOOK VALUE FAIR VALUE Tradenames (indefinite life) . . . . ....
ouléntries that A would make during 2019 to account for its and b. stment in T...
ouléntries that A would make during 2019 to account for its and b. stment in T (ii) determine A's retained earnings on its 12/31/19 balance sheet. As (O) prepare all the journal entries that A would make during 2019 to account for its investment in T suming INSTEAD that A can exercise significant influence over T: and (i) determine A's retained earnings on its 12/31/19 balance sheet. 3, on January 2, 2019, P acquires 80% of the outstanding common stock...
On January 1, 2018, Strait Corp. purchased 100% of the outstanding common stock of Amarillo Company....
On January 1, 2018, Strait Corp. purchased 100% of the outstanding common stock of Amarillo Company. On the date of the acquisition, Amarillo’ identifiable net assets had fair values that approximated their recorded book values. The acquisition resulted in no goodwill. Strait Corp. uses the cost method to account for its investment in Amarillo Company. The following financial statement information is for Amarillo Company for the year ended December 31, 2019: 2019 2018 Revenues $100,000 $120,000 Expenses 47,000 65,000 Net...
On January 1, 2018, Strait Corp. purchased 100% of the outstanding common stock of Amarillo Company....
On January 1, 2018, Strait Corp. purchased 100% of the outstanding common stock of Amarillo Company. On the date of the acquisition, Amarillo’ identifiable net assets had fair values that approximated their recorded book values. The acquisition resulted in no goodwill. Strait Corp. uses the cost method to account for its investment in Amarillo Company. The following financial statement information is for Amarillo Company for the year ended December 31, 2019: 2019 2018 Revenues $100,000 $120,000 Expenses 47,000 65,000 Net...
Branson paid $607,500 cash for all of the outstanding common stock of Wolfpack, Inc., on January...
Branson paid $607,500 cash for all of the outstanding common stock of Wolfpack, Inc., on January 1, 2017. On that date, the subsidiary had a book value of $373,000 (common stock of $200,000 and retained earnings of $173,000), although various unrecorded royalty agreements (10-year remaining life) were assessed at a $199,000 fair value. Any remaining excess fair value was considered goodwill. In negotiating the acquisition price, Branson also promised to pay Wolfpack’s former owners an additional $45,000 if Wolfpack’s income...
Plaza, Inc., acquires 80 percent of the outstanding common stock of Stanford Corporation on January 1,...
Plaza, Inc., acquires 80 percent of the outstanding common stock of Stanford Corporation on January 1, 2018, in exchange for $1,007100 cash. At the acquisition date, Stanford's total fair value, including the noncontrolling interest, was assessed at $1,258,875 Also at the acquisition date, Stanford's book value was $533,800. Several individual items on Stanford's financial records had fair values that differed from their book values as follows: Book Value Fair Value Tradenames (indefinite life) Property and equipment (net, 8-year remaining life)...
1) The balance of common stock of S Co. at acquisition
date was: *
a) $1,625,000
b) $1,850,000
c) $2,000,000
d) $1,960,000
2) The eliminating entries for a consolidated statements workpaper
on December 31, 2019, will include: *
a) Debit Investment in S Co. $2,080,000
b) Credit Retained Earnings $600,000
c) Credit Dividends Declared $160,000
d) Debit Dividend Income $128,000
3) The difference between implied and book value at acquisition
date was: *
a) $120,000
b) $175,000
c) $125,000
d)...
Haynes, Inc. obtained 100% of Turner Company's common stock on January 1, 2018, by issuing 50,000 shares of common stock that was trading at $35 per share. The acquisition agreement also contained a contingent consideration clause to which Haynes assigned a fair value of $100,000. On January 1, 2018, Turner reported a net book value of $1,500,000. However, Equipment (5-year life) was undervalued by $150,000. Also, Turner had research and development in process with an assessed value of $100,000, although...
Assume that on January 1, 2017, Company P acquires 70% of the
common stock of Company S by paying $7,000 in cash to the
shareholders of Company S. The preacquisition balance sheets and
income statements of Company P and Company S are shown below.
Prepare Company P's post-acquisition B/S right afer the acquisition
(Jan. 1) and at the end of the year of 2017 by the equity and
acquisition method s. Also, prepare Company P's post-acquisition
I/S for the year...
ouléntries that A would make during 2019 to account for its and b. stment in T (ii) determine A's retained earnings on its 12/31/19 balance sheet. As (O) prepare all the journal entries that A would make during 2019 to account for its investment in T suming INSTEAD that A can exercise significant influence over T: and (i) determine A's retained earnings on its 12/31/19 balance sheet. 3, on January 2, 2019, P acquires 80% of the outstanding common stock...
Plaza, Inc., acquires 80 percent of the outstanding common stock of Stanford Corporation on January 1, 2018, in exchange for $1,007100 cash. At the acquisition date, Stanford's total fair value, including the noncontrolling interest, was assessed at $1,258,875 Also at the acquisition date, Stanford's book value was $533,800. Several individual items on Stanford's financial records had fair values that differed from their book values as follows: Book Value Fair Value Tradenames (indefinite life) Property and equipment (net, 8-year remaining life)...
Most questions answered within 3 hours.
-
Which is a possible value for the principal quantum number
n?
7, 3.14 , 2.5, None...
asked 1 minute ago -
Everyone loves a helium filled balloon for a party. Do some
basic Internet research and answer...
asked 26 seconds ago -
Here is a pair of aromatic compounds that each have a complicated
set of aromatic peaks....
asked 19 minutes ago -
As with many public goods, determining the appropriate level of
government support for the production of...
asked 22 minutes ago -
Write a balanced chemical equation for the oxidation reaction
between Caro’s acid (H2SO5) and CN– ion...
asked 25 minutes ago -
Calculate the number of valence electrons for
[Mo(C6H6)(CO)3]
asked 35 minutes ago -
Which of the following are true about the strength of the
association between two variables?
1-...
asked 32 minutes ago -
You are a monopolist and know that your consumers have a linear
demand curve. At what...
asked 31 minutes ago -
Raising a heavy load requires work. Raising it in half the time
requires:
asked 37 minutes ago -
MGT-201: Marketing Management
Before deciding on the structure of the channel marketers must
take several factors...
asked 37 minutes ago -
1. ACLs allow a router to control traffic within a network. The
concept is very similar...
asked 39 minutes ago -
35. When the electron in a hydrogen atom falls from its first
excited energy level to...
asked 40 minutes ago