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.
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CVS is selling inventory and a building to an unrelated company
Riteaid for $100,000. 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.
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.
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...
On January 1, 2018, Pen Corporation acquired 75% of the outstanding common stock of Sen Company...
On January 1, 2018, Pen Corporation acquired 75% of the outstanding common stock of Sen Company for $450,000. There was no control premium. Sen’s stockholders’ equity on January 1, 2018, was as follows: Common Stock, $20 par $200,000 Additional Paid-In Capital $110,000 Retained Earnings $100,000 Differences between book value and fair value of the net identifiable assets of Sen Company on January 1, 2018, were limited to the following: Book Value Fair Value Inventories (FIFO) $40,000 $39,400 Building (Net) [Remaining...
only need part b worksheet Illustration #3 Pepper Company, which is a calendar-year-reporting company, purchased 100%...
only need part b worksheet
Illustration #3 Pepper Company, which is a calendar-year-reporting company, purchased 100% of the common stock of Salt Inc. for $325,000 on 12/31/17. On the acquisition date, the following net assets of Salt had fair values different than book value: Cost FMV Inventory 80,000 75,000 Turnover 6 times per year Land 70,000 100,000 Building and equipment 220,000 210,000 10 year life Accumulated depreciation (60,000) Covenant-not-to-complete 40,000 4 year life Bonds payable 150,000 175,000 10 years to...
On January 1, 2018, Peter Corporation acquired 75% of the outstanding common stock of Sandy Company...
On January 1, 2018, Peter Corporation acquired 75% of the outstanding common stock of Sandy Company for $450,000. There was no control premium. The following information about Sandy Company on January 1, 2018 was available: Book value Fair value Cash 193,000 193,000 Inventory 40,000 39,400 Building 180,000 200,000 Total 413,000 432,400 Accounts Payable 3,000 3,000 Common Stock 200,000 Add. Paid-in Capital 110,000 Retained Earnings 100,000 Total 413,000 Peter uses the complete equity method to account...
On July 1, 2008, Rose Company exchanged 18,000 of its $35 fair value ($10 par value)...
On July 1, 2008, Rose Company exchanged 18,000 of its $35 fair value ($10 par value) shares for 16,000 of the outstanding shares of Daisy Company. Rose paid direct acqusition costs of $20,000 and $50,000 in stock issuance costs. Two companies had the following balance sheets on July 1, 2008: Rose Co. Book Value Daisy Co. Book Value Cash $ 150,000 $ 70,000 Inventory 120,000 60,000 Land 100,000 40,000 Buildings (net) 300,000 120,000 Equipment (net) 330,000 110,000 TOTAL 1,000,000 400,000...
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...
Tatum Company has four products in its inventory. Information about the December 31, 2021, inventory is...
Tatum Company has four products in its inventory. Information about the December 31, 2021, inventory is as follows: Product 101 102 103 104 Total Cost $120,000 90,000 60,000 30,000 Total Replacement Cost $100,000 85,000 40,000 28, 000 Total Net Realizable Value $100,000 110,000 50,000 50,000 The normal profit is 25% of total cost. Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products. 2....
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...
only need part b worksheet
Illustration #3 Pepper Company, which is a calendar-year-reporting company, purchased 100% of the common stock of Salt Inc. for $325,000 on 12/31/17. On the acquisition date, the following net assets of Salt had fair values different than book value: Cost FMV Inventory 80,000 75,000 Turnover 6 times per year Land 70,000 100,000 Building and equipment 220,000 210,000 10 year life Accumulated depreciation (60,000) Covenant-not-to-complete 40,000 4 year life Bonds payable 150,000 175,000 10 years to...
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...
Tatum Company has four products in its inventory. Information about the December 31, 2021, inventory is as follows: Product 101 102 103 104 Total Cost $120,000 90,000 60,000 30,000 Total Replacement Cost $100,000 85,000 40,000 28, 000 Total Net Realizable Value $100,000 110,000 50,000 50,000 The normal profit is 25% of total cost. Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products. 2....
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