Homework Answers
Journal entries in the book of Orange company on aquisition is as follows:-
| Date | Particulars | Debit $ | Credit $ |
| Jan 01,2019 | Investment in Shell Company | 350000 | |
| Cash/Bank | 350000 | ||
| (Being 100%shares acquired of shell company and consideration paid ) |
A) Journal entries required under equity method on Orange's company books at 31 Dec,2019.
| Date | Particulars | Debit $ | Credit $ |
| Dec 31,2019 | Dividend Receivable account | 20000 | |
| Investment in Shell Company | 20000 | ||
| (Being dividend receivable from shell company) |
| Date | Particulars | Debit $ | Credit $ |
| Dec 31,2019 | Investment in Shell Company | 55000 | |
| Income from Shell company | 55000 | ||
| (Being income receivable from shell company) |
B)Computation of Book value
| Partculars | Amount | Amount $ |
| Assets taken over | ||
| Assets | 750000 | 750000 |
| Less:- Liabilitoes taken over | ||
| Accounts payable | 100000 | |
| Notes payable | 300000 | 400000 |
| Purchase Consideration | 350000 |
C) Consolidated journal entry as on Dec,3,2019 in the books of orange company is as follows:-
| Date | Particulars | Debit $ | Credit $ |
| Dec 31,2019 | Assets | 750000 | |
| Accounts Payable | 100000 | ||
| Notes payable | 300000 | ||
| Investment in shell company | 350000 | ||
| (Being books of shell company consolidated) | |||
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For
the equity method i dont know, this was all that was given to me in
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please
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For
the equity method i dont know, this was all that was given to me in
the problem - i need help figuring out how to answer it
please
needed. 1. On Jan 2, 2019, Acquirer Co acquired 10% of T Inc's common stock for $850,000. On the date of acquisition, Acquirer determined that any excess of the fair market value of the net assets of T over its book value was attributable to goodwill.. During 2019, T reported the...
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