ParCorp is selling inventory and a building to an unrelated company SmaCorp for $90,000. The cost,...
ParCorp is selling inventory and a building to an unrelated company SmaCorp for $90,000. The cost, book value, and fair value of the building are $80,000, 60,000, and 100,000. The cost, book value, and fair value of the inventory are $10,000, 10,000, and 10,000. Provide SmaCorp's journal entry.
Homework Answers
Journal Entry in the books of SmaCorp:
| Account title and explanation | Debit | Credit |
| Inventory | $8,182 | |
| Building | $81,818 | |
| Cash | $90,000 | |
| [To record purchase of inventory and building] |
Calculations:
Purchase price of building and inventory is $90,000. It should be apportioned on the basis of Fair value. Threfore,
Cost of inventory = $90,000 x ($10,000/$110,000) = $8,182
Cost of building = $90,000 x ($100,000/$110,000) = $81,818
Add Answer to:
ParCorp is selling inventory and a building to an unrelated
company SmaCorp for $90,000. The cost,...
ParCorp is selling inventory and a building to an unrelated company SmaCorp for $90,000. The cost,...
ParCorp is selling inventory and a building to an unrelated company SmaCorp for $90,000. The cost, book value, and fair value of the building are $80,000, 60,000, and 100,000. The cost, book value, and fair value of the inventory are $10,000, 10,000, and 10,000. Provide ParCorp's journal entry.
CVS is selling inventory and a building to an unrelated company Riteaid for $100,000. The cost,...
CVS is selling inventory and a building to an unrelated company Riteaid for $100,000. The cost, book value, and fair value of the building are $90,000, 70,000, and 110,000. The cost, book value, and fair value of the inventory are $20,000, 20,000, and 20,000. Provide CVS's journal entry. Using fair value method and equity method.
Question 3 1 pts Information from ABC Company during the year: Beginning Inventory = $120,000 Purchases...
Question 3 1 pts Information from ABC Company during the year: Beginning Inventory = $120,000 Purchases = 6 widgets at $10,000 each Sales = 8 widgets that cost $10,000 each Ending Inventory = $100,000 Using the Periodic Inventory Method, determine the adjusting journal entry ABC should book at the end of the period. Select the multiple choice question that best fits your answer Debit to Purchases for $60,000 Debit COGS for $80,000 Debit Beginning Inventory for $120,000 Credit Ending Inventory...
Pepper Company, which is a calendar-year-reporting company, purchased 100% of the common stock of Salt Inc....
Pepper Company, which is a calendar-year-reporting company, purchased 100% of the common stock of Salt Inc. for $325,000 on 12/31/15. Pepper declared dividends of $80,000 and Salt declared dividends of $10,000 during 2015. Each company's financial statements for the year ended 12/31/15 immediately after the acquisition are as follows: Income Statement (2015) Sales Cost of sales Expenses Net Income Pepper Co. (900,000) 500,000 260,000 (140,000) Salt Co. (500,000) 250,000 202,000 (48,000) 20,000 70,000 80,000 Balance Sheet (as of 12/31/15) Cash...
2. The inventory of Hendrix Company consists of five products as summarized below: Product Cost $...
2. The inventory of Hendrix Company consists of five products as summarized below: Product Cost $ 50,000 100,000 80,000 90,000 95,000 Estimated Selling Costs $ 15,000 30,000 15,000 15,000 14,000 Replacement Cost $ 55,000 97.000 70,000 95,000 92,000 Selling Price $ 100,000 120,000 90,000 100,000 110,000 The normal gross profit percentage is 20% of selling price. What value should Hendrix Company report for each of its products when applying the lower-of-cost-or-market (LCM) method?
3. Acquisition Method Prance Company acquired all the assets and liabilities of Seaver Company and properly...
3. Acquisition Method Prance Company acquired all the assets and liabilities of Seaver Company and properly recorded the transaction under the acquisition method. Seaver's balance sheet prior to the transaction was as follows: Book Value Fair Value A/R $ 175,000 $175,000 Inventory 465,000 500,000 20,000 20,000 Equipment Building 90,000 85,000 Land 30,000 60,000 Total Assets $ 780,000 $840.000 Accounts Payable $ 120,000 $130,000 Common Stock ($5 par) 100,000 100,000 Pald in Capital 320,000 310,000 Retained Earnings 240,000 300,000 Total Liab...
A company preparing for a Chapter 7 liquidation has the following liabilities: Note payable A of...
A company preparing for a Chapter 7 liquidation has the following liabilities: Note payable A of $130,000 secured by land having a book value of $70,000 and a fair value of $90,000. Note payable B of $160,000 secured by a building having a $80,000 book value and a $60,000 fair value. Note payable C of $80,000, unsecured. Administrative expenses payable of $40,000. Accounts payable of $140,000. Income taxes payable of $50,000. The company also has these other assets: Cash of...
Pab Corporation decided to establish Sollon Company as a wholly-owned subsidiary
Pab Corporation decided to establish Sollon Company as a wholly-owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 30,000 shares of $6 par value common stock. The following information is provided on the assets and accounts payable transferred CostBook ValueFair ValueCash$25,000$25.000$25,000Inventory70,00070,00070,000Land60.00060,00090,000Buildings170,000130,000240,000Equipment90,00080,000105.000Accounts Payable45,00045.00045.000Required a. Give the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon. b. Give the journal entry that Sollon recorded for the receipt of assets...
Southern Company owns a building that it leases to others. The building's fair value is $1,950,000...
Southern Company owns a building that it leases to others. The building's fair value is $1,950,000 and its book value is $1,240,000 (original cost of $2,550,000 less accumulated depreciation of $1,310,000). Southern exchanges this for a building owned by the Eastern Company. The building's book value on Eastern's books is $1,390,000 (original cost of $2,150,000 less accumulated depreciation of $760,000). Eastern also gives Southern $195,000 to complete the exchange. The exchange has commercial substance for both companies. Required: Prepare the...
On January 1, 2017. Pal Products Corporation issues 12,000 shares of its P10 pax value stock...
On January 1, 2017. Pal Products Corporation issues 12,000 shares of its P10 pax value stock to acquire the net assets of Tan Company. Underlying book value and fair Required: Record the journal enti Corporation Problem 134 value information for the statement of financial position items of Tan Company at the time of acquisition are as follows: Book Value Fair Value Cash P60,000 P 60,000 100,000 100,000 Accounts Receivable 60,000 115,000 Inventory (lifo basis) Land 50,000 70.000 Buildings and Equipment...
Question 3 1 pts Information from ABC Company during the year: Beginning Inventory = $120,000 Purchases = 6 widgets at $10,000 each Sales = 8 widgets that cost $10,000 each Ending Inventory = $100,000 Using the Periodic Inventory Method, determine the adjusting journal entry ABC should book at the end of the period. Select the multiple choice question that best fits your answer Debit to Purchases for $60,000 Debit COGS for $80,000 Debit Beginning Inventory for $120,000 Credit Ending Inventory...
Pepper Company, which is a calendar-year-reporting company, purchased 100% of the common stock of Salt Inc. for $325,000 on 12/31/15. Pepper declared dividends of $80,000 and Salt declared dividends of $10,000 during 2015. Each company's financial statements for the year ended 12/31/15 immediately after the acquisition are as follows: Income Statement (2015) Sales Cost of sales Expenses Net Income Pepper Co. (900,000) 500,000 260,000 (140,000) Salt Co. (500,000) 250,000 202,000 (48,000) 20,000 70,000 80,000 Balance Sheet (as of 12/31/15) Cash...
2. The inventory of Hendrix Company consists of five products as summarized below: Product Cost $ 50,000 100,000 80,000 90,000 95,000 Estimated Selling Costs $ 15,000 30,000 15,000 15,000 14,000 Replacement Cost $ 55,000 97.000 70,000 95,000 92,000 Selling Price $ 100,000 120,000 90,000 100,000 110,000 The normal gross profit percentage is 20% of selling price. What value should Hendrix Company report for each of its products when applying the lower-of-cost-or-market (LCM) method?
3. Acquisition Method Prance Company acquired all the assets and liabilities of Seaver Company and properly recorded the transaction under the acquisition method. Seaver's balance sheet prior to the transaction was as follows: Book Value Fair Value A/R $ 175,000 $175,000 Inventory 465,000 500,000 20,000 20,000 Equipment Building 90,000 85,000 Land 30,000 60,000 Total Assets $ 780,000 $840.000 Accounts Payable $ 120,000 $130,000 Common Stock ($5 par) 100,000 100,000 Pald in Capital 320,000 310,000 Retained Earnings 240,000 300,000 Total Liab...
Southern Company owns a building that it leases to others. The building's fair value is $1,950,000 and its book value is $1,240,000 (original cost of $2,550,000 less accumulated depreciation of $1,310,000). Southern exchanges this for a building owned by the Eastern Company. The building's book value on Eastern's books is $1,390,000 (original cost of $2,150,000 less accumulated depreciation of $760,000). Eastern also gives Southern $195,000 to complete the exchange. The exchange has commercial substance for both companies. Required: Prepare the...
On January 1, 2017. Pal Products Corporation issues 12,000 shares of its P10 pax value stock to acquire the net assets of Tan Company. Underlying book value and fair Required: Record the journal enti Corporation Problem 134 value information for the statement of financial position items of Tan Company at the time of acquisition are as follows: Book Value Fair Value Cash P60,000 P 60,000 100,000 100,000 Accounts Receivable 60,000 115,000 Inventory (lifo basis) Land 50,000 70.000 Buildings and Equipment...
Most questions answered within 3 hours.
-
what is employee/ employer relations ?
why is Employee/ Employer relation is important in the context...
asked 10 minutes ago -
Explain the relationship between tests of acquisition and
payment cycle and tests of accounts payable. Give...
asked 8 minutes ago -
A hot-air balloon is descending with a velocity of (−2.00m/s)y^.
A champagne bottle is opened to...
asked 27 minutes ago -
1. When a nearsighted person looks at an object that is in the
distance with their...
asked 1 hour ago -
QUESTION 8
Both of these statements will store the same value in the
variable $number
$number...
asked 2 hours ago -
The price of 1 lb of potatoes is $1.75. If all the potatoes sold
today at...
asked 3 hours ago -
Garcia Company issues 20.00%, 15-year bonds with a par value of
$470,000 and semiannual interest payments....
asked 3 hours ago -
In C++ Programming, Try using loops only.
This lab demonstrates the use of the While Loop...
asked 3 hours ago -
Effect of DCMU and sodium azide on Chlamydomonas? We did an
experiment where we had Chlamydomonas...
asked 4 hours ago -
1a) According to the ideal gas law, _______________.
a. a gas has infinite volume at absolute...
asked 6 hours ago -
Oakdale Fashions, Inc. had $245,000 in 2018 taxable income.
Using the tax schedule in Table 2.3...
asked 6 hours ago -
The marketing class at CSUS had an average score of 150. An
educational analyst determined that...
asked 7 hours ago