Homework Answers
The balance in the investment account on april 1 2019 just beforethe sale of shares and The correct answer would be option b) 558000
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On January 1, 2017, Mehan, Incorporated purchased 15,000 shares of Cook Company for $150,000 giving Mehan...
On January 1, 2017, Mehan, Incorporated purchased 15,000 shares of Cook Company for $150,000 giving Mehan...
On January 1, 2017, Mehan, Incorporated purchased 15,000 shares of Cook Company for $150,000 giving Mehan a 15% ownership of Cook. The fair value of the 15% investment is the same value as indicated from the transaction when, on January 1, 2018, Mehan purchased an additional 25,000 shares (25%) of Cook for $300,000. This last purchase gave Mehan the ability to apply significant influence over Cook. The book value of Cook on January 1, 2017 was $1,000,000. The book value...
1. On January 1, 2019, Monroe, Inc., purchased 12,000 shares of Brown Company for $250,000, giving...
1. On January 1, 2019, Monroe, Inc., purchased 12,000 shares of Brown Company for $250,000, giving Monroe 10 percent ownership of Brown. On January 1, 2020, Monroe purchased an additional 18,000 shares for $590,000. This latest purchase gave Monroe the ability to apply significant influence over Brown. The original 10 percent investment was categorized as an available for sale security. Any excess of cost over book value acquired for either investment was attributed solely to goodwill. These amounts are assumed...
Mighty Company purchased a 60 percent interest in Lowly Company on January 1, 2017, for $510,900...
Mighty Company purchased a 60 percent interest in Lowly Company on January 1, 2017, for $510,900 in cash. Lowly's book value at that date was reported as $692,500 and the fair value of the noncontrolling interest was assessed at $340,600. Any excess acquisition-date fair value over Lowly's book value is assigned to trademarks to be amortized over 20 years. Subsequently, on January 1, 2018, Lowly acquired a 20 percent interest in Mighty. The price of $344,000 was equivalent to 20...
On January 1, 2016, Halstead, Inc., purchased 79,000 shares of Sedgwick Company common stock for $1,402.000.giving...
On January 1, 2016, Halstead, Inc., purchased 79,000 shares of Sedgwick Company common stock for $1,402.000.giving Halstead 25 percent ownership and the ability to apply significant influence over Sedgwick. Any excess of cost over book value acquired was attributed solely to goodwill. Sedgwick reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout these years. Dividends are declared and paid in the same period. 2016 2017 2018 Net Income $400,000 425,000 594,000 Annual Cash...
Red purchased 10% of blue on January 1, 2019 for $320,000 in cash and did not...
Red purchased 10% of blue on January 1, 2019 for $320,000 in cash and did not have the ability to exercise significant influence. During 2019 blue paid $125,000 in dividends and reported income of $600,000. On December 31, 2019 the market value of red investment in blue climbed to $375,000. a. journalize all necessary entries on the book of read assuming available for sale securities using the fair value method in 2019. b. Assume instead that red purchase 25% of...
On January 1, 2019, Monroe, Inc., purchased 15,600 shares of Brown Company for $270,000, giving Monroe...
On January 1, 2019, Monroe, Inc., purchased 15,600 shares of Brown Company for $270,000, giving Monroe 13 percent ownership of Brown. On January 1, 2020, Monroe purchased an additional 19,200 shares for $590,210. This latest purchase gave Monroe the ability to apply significant influence over Brown. The original 13 percent investment was categorized as an available for-sale security. Any excess of cost over book value acquired for either investment was attributed solely to goodwill. Brown reports net income and dividends...
Boardman, Inc. acquires 40% of the outstanding voting shares of Simon, Inc. on January 1, 2017,...
Boardman, Inc. acquires 40% of the outstanding voting shares of Simon, Inc. on January 1, 2017, for $380,000, which gives Boardman the ability to significantly influence Simon. Simon has a net book value of $900,000 on January 1, 2017. Simon’s asset and liability accounts showed carrying amounts considered equal to fair values except for a copyright whose value accounted for Boardman’s excess cost over book value in its 40% purchase. The copyright had a remaining life of 10 years on...
Francisco Inc. acquired 100 percent of the voting shares of Beltran Company on January 1, 2017....
Francisco Inc. acquired 100 percent of the voting shares of Beltran Company on January 1, 2017. In exchange, Francisco paid $450,000 in cash and issued 104,000 shares of its own $1 par value common stock. On this date, Francisco's stock had a fair value of $12 per share. The combination is a statutory merger with Beltran subsequently dissolved as a legal corporation. Beltran's assets and liabilities are assigned to a new reporting unit. The following reports the fair values for...
On January 1, 2017, Shamrock Co. purchased 26,000 shares (a 10% interest) in Elton John Corp....
On January 1, 2017, Shamrock Co. purchased 26,000 shares (a 10%
interest) in Elton John Corp. for $1,380,000. At the time, the book
value and the fair value of John’s net assets were
$14,200,000.
On July 1, 2018, Shamrock paid $3,000,000 for 52,000 additional
shares of John common stock, which represented a 20% investment in
John. The fair value of John’s identifiable assets net of
liabilities was equal to their carrying amount of $15,500,000. As a
result of this transaction,...
On January 1, 2017, Bonita Co. purchased 24,000 shares (a 10% interest) in Elton John Corp....
On January 1, 2017, Bonita Co. purchased 24,000 shares (a 10% interest) in Elton John Corp. for $1.450.000. At the time, the book value and the fair value of John's net assets were $12,000,000. On July 1, 2018, Bonita paid $2,740,000 for 48,000 additional shares of John common stock, which represented a 20% investment in John. The fair value of John's identifiable assets net of liabilities was equal to their carrying amount of $13,200,000. As a result of this transaction,...
On January 1, 2017, Mehan, Incorporated purchased 15,000 shares of Cook Company for $150,000 giving Mehan a 15% ownership of Cook. The fair value of the 15% investment is the same value as indicated from the transaction when, on January 1, 2018, Mehan purchased an additional 25,000 shares (25%) of Cook for $300,000. This last purchase gave Mehan the ability to apply significant influence over Cook. The book value of Cook on January 1, 2017 was $1,000,000. The book value...
1. On January 1, 2019, Monroe, Inc., purchased 12,000 shares of Brown Company for $250,000, giving Monroe 10 percent ownership of Brown. On January 1, 2020, Monroe purchased an additional 18,000 shares for $590,000. This latest purchase gave Monroe the ability to apply significant influence over Brown. The original 10 percent investment was categorized as an available for sale security. Any excess of cost over book value acquired for either investment was attributed solely to goodwill. These amounts are assumed...
On January 1, 2016, Halstead, Inc., purchased 79,000 shares of Sedgwick Company common stock for $1,402.000.giving Halstead 25 percent ownership and the ability to apply significant influence over Sedgwick. Any excess of cost over book value acquired was attributed solely to goodwill. Sedgwick reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout these years. Dividends are declared and paid in the same period. 2016 2017 2018 Net Income $400,000 425,000 594,000 Annual Cash...
Francisco Inc. acquired 100 percent of the voting shares of Beltran Company on January 1, 2017. In exchange, Francisco paid $450,000 in cash and issued 104,000 shares of its own $1 par value common stock. On this date, Francisco's stock had a fair value of $12 per share. The combination is a statutory merger with Beltran subsequently dissolved as a legal corporation. Beltran's assets and liabilities are assigned to a new reporting unit. The following reports the fair values for...
On January 1, 2017, Shamrock Co. purchased 26,000 shares (a 10%
interest) in Elton John Corp. for $1,380,000. At the time, the book
value and the fair value of John’s net assets were
$14,200,000.
On July 1, 2018, Shamrock paid $3,000,000 for 52,000 additional
shares of John common stock, which represented a 20% investment in
John. The fair value of John’s identifiable assets net of
liabilities was equal to their carrying amount of $15,500,000. As a
result of this transaction,...
On January 1, 2017, Bonita Co. purchased 24,000 shares (a 10% interest) in Elton John Corp. for $1.450.000. At the time, the book value and the fair value of John's net assets were $12,000,000. On July 1, 2018, Bonita paid $2,740,000 for 48,000 additional shares of John common stock, which represented a 20% investment in John. The fair value of John's identifiable assets net of liabilities was equal to their carrying amount of $13,200,000. As a result of this transaction,...
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