Homework Answers
The correct answer is "$200" calculated as below:
Goodwill = Excess of cost of acquiring investment over investor's share of fair value of identifiable assets and liabilities of the business acquired
Cost of acquiring investment = $2,400
Fair value of assets and liabilities = $8,000 - ($400 + $1,000) + ($500 + $1,300 + $400) = $8,800
Investor's share of fair value of assets and liabilities = $8,800 * 25% = $2,200
Therefore, goodwill = $2,400 - $2,200 = $200
Add Answer to:
QUESTION 23 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...
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...
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...
37 On January 2, 2021, Barley Corp. purchased 40% of the voting common stock of Wheat...
37 On January 2, 2021, Barley Corp. purchased 40% of the voting common stock of Wheat Co., paying $3,000,000. Barley properly accounts for this investment using the equity method. At the time of the investment, Wheat's total stockholders' equity was $5,000,000. Barley gathered the following information about Wheat's assets and liabilities whose book values and fair values differed: Book Value Fair Value Buildings (20-year life) $1,000,000 $1,800,000 Equipment (5-year life) 1,500,000 2,000,000 Franchises (10-year life) 0 700,000 Any excess of...
On January 1, 2018, Jackie Corp. purchased 30% of the voting common stock of Rob Co.,...
On January 1, 2018, Jackie Corp. purchased 30% of the voting common stock of Rob Co., paying $2,000,000. Jackie properly accounts for this investment using the equity method. At the time of the investment, Rob's total stockholders' equity was $3,000,000. Jackie gathered the following information about Rob's assets and liabilities whose book values and fair values differed: Buildings (15-year life) $1,000,000- BV $1,500,000 - FV Equipment (5-year life) $2,500,000 - BV $3,000,000 - FV Franchises (10-year life) $0 - BV...
On January 3, 2015, McDonald Inc. purchased 40% of the outstanding common stock of Old Farms...
On January 3, 2015, McDonald Inc. purchased 40% of the outstanding common stock of Old Farms Co., paying $128,000 when the book value of the net assets of Old Farms equaled $250,000 . The difference was attributed to equipment, which had a book value of $60,000 and a fair value of $100,000, and to buildings, with a book value of $50,000 and a fair value of $80,000. The remaining useful life of the equipment and buildings was 4 years and...
Park Corporation acquired the voting stock of Sequoia Company on January 1, 2020 for $25 million...
Park Corporation acquired the voting stock of Sequoia Company on January 1, 2020 for $25 million in cash and stock. At the date of acquisition, Sequoia's book value totaled $3 million, consisting of $1.6 million in capital stock, $1.8 million in retained earnings, and $400,000 in accumulated other comprehensive losses. Sequoia's reported net assets at the date of acquisition were carried at amounts approximating fair value, except its inventory was overvalued by $500,000 (sold in 2020), its plant assets (10-year...
Park Corporation acquired the voting stock of Sequoia Company on January 1, 2020 for $25 million...
Park Corporation acquired the voting stock of Sequoia Company on January 1, 2020 for $25 million in cash and stock. At the date of acquisition, Sequoia's book value totaled $3 million, consisting of $1.6 million in capital stock, $1.8 million in retained earnings, and $400,000 in accumulated other comprehensive losses. Sequoia's reported net assets at the date of acquisition were carried at amounts approximating fair value, except its inventory was overvalued by $500,000 (sold in 2020), its plant assets (10-year...
Potash Corporation acquired the voting stock of Safestyle Company on January 1, 2019 for $50 million....
Potash Corporation acquired the voting stock of Safestyle Company on January 1, 2019 for $50 million. Safestyle's book value at the time was $10 million, consisting of $2 million of capital stock and $8 million of retained earnings. The $40 million difference between fair and book value was attributed to goodwill. It is now December 31, 2020, the end of the accounting year and two years after the acquisition. Safestyle's January 1, 2020 retained earnings balance is $11 million, and...
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 & inventories $100,000 $50,000 Land 200,000 100.000 Property & equipment 225.000 100.000 Total assets $525,000 $250,000 Liabilities $150,000 $80,000 Common stock ($2 par) 20,000 10,000 Additional paid-in capital 280.000 150.000 Retained...
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...
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...
37 On January 2, 2021, Barley Corp. purchased 40% of the voting common stock of Wheat Co., paying $3,000,000. Barley properly accounts for this investment using the equity method. At the time of the investment, Wheat's total stockholders' equity was $5,000,000. Barley gathered the following information about Wheat's assets and liabilities whose book values and fair values differed: Book Value Fair Value Buildings (20-year life) $1,000,000 $1,800,000 Equipment (5-year life) 1,500,000 2,000,000 Franchises (10-year life) 0 700,000 Any excess of...
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 & inventories $100,000 $50,000 Land 200,000 100.000 Property & equipment 225.000 100.000 Total assets $525,000 $250,000 Liabilities $150,000 $80,000 Common stock ($2 par) 20,000 10,000 Additional paid-in capital 280.000 150.000 Retained...
Most questions answered within 3 hours.
-
Do not neglect the old for the new. The existing business must
not lose priority simply...
asked 2 hours ago -
Kylie is a single mom with two dependent children,
Tanner, age 7 and Olivia, age 11....
asked 3 hours ago -
Phosphorous + bromine = phosphorous tribromide. If 35.0 g of
bromine are reacted and 27.9 grams...
asked 4 hours ago -
Derive the long wavelength limit of the Planck energy density
distribution
asked 4 hours ago -
Calculate the pH of each of the following solutions.
0.50 M HBr
3.1×10−4 M KOH
4.2×10−5...
asked 8 hours ago -
For the year ended December 31, Depot Max’s cost of merchandise
sold was $85,600. Inventory at the...
asked 8 hours ago -
Week 10 - Professional Memo Assignment
Professional Memo Assignment
Your mission for this week, should you...
asked 8 hours ago -
Write a Python program that stores the data for each
player on the team, and it...
asked 8 hours ago -
In
the last 3 months, mike never knows when he is going to get his
allowance...
asked 8 hours ago -
Is Ca(OH)2 a Bronsted base, Lewis base, or both? Why?
asked 8 hours ago -
1A- Why don’t voters complain about U.S. tariffs on imported
sugar?
Because sugar is only a...
asked 8 hours ago -
Cash Payback Period
Primera Banco is evaluating two capital investment proposals for
a drive-up ATM kiosk,...
asked 8 hours ago