Homework Answers
Note:
- Computation of difference in purchase price and assets acquired:
| Current Assets | 96000 |
| Plant and Equipment | 224000 |
| Land | 120000 |
| Current Liabilities | -44000 |
| Notes payable | -36000 |
| Net assets | 360000 |
| % acquired | 80% |
| equivalent value | 360000*80% = 288000 |
- Investment in S Co. = 380000
- Value of net assets = 288000
- So, difference = 92000 which goes into value of the land
2. No-controlling interest: Net Assets = 360000*20% = 72000.
Consolidated Balance Sheet
Please Note: It can be also assumed that the Non-controlling interest should have their share of the increase in the value of the land (92000*20/80 = 23000). However, since question does not mention about this, this is not assumed.
Please comment in case of any query regarding the solution
Add Answer to:
TUDIN #2 2016 for company purchased 80% of the outstanding common stock of S Company on January 2, 2016, for $380,0...
P Inc. acquired 100% of S Inc.’s outstanding common stock for $ 1,500,000 cash. Divide the...
P Inc. acquired 100% of S Inc.’s outstanding common stock for $ 1,500,000 cash. Divide the cost into its major elements and prepare the consolidation entices as of the acquisition date. Prepare basic elimination entry and excess value reclassification entry from the following information Book Value Current Value Cash 50,000 50,000 Account Receivable 150,000 150,000 Notes Receivable 120,000 60,000 Land 410,000 540,000 Building & Equipment 500,000 610,000 Patent 40,000 130,000 Goodwill 100,000 -- Total Assets 1370,000 1540,000 Payables & Accruals...
On January 1, 2018, Strait Corp. purchased 100% of the outstanding common stock of Amarillo Company....
On January 1, 2018, Strait Corp. purchased 100% of the outstanding common stock of Amarillo Company. On the date of the acquisition, Amarillo’ identifiable net assets had fair values that approximated their recorded book values. The acquisition resulted in no goodwill. Strait Corp. uses the cost method to account for its investment in Amarillo Company. The following financial statement information is for Amarillo Company for the year ended December 31, 2019: 2019 2018 Revenues $100,000 $120,000 Expenses 47,000 65,000 Net...
On January 1, 2018, Strait Corp. purchased 100% of the outstanding common stock of Amarillo Company....
On January 1, 2018, Strait Corp. purchased 100% of the outstanding common stock of Amarillo Company. On the date of the acquisition, Amarillo’ identifiable net assets had fair values that approximated their recorded book values. The acquisition resulted in no goodwill. Strait Corp. uses the cost method to account for its investment in Amarillo Company. The following financial statement information is for Amarillo Company for the year ended December 31, 2019: 2019 2018 Revenues $100,000 $120,000 Expenses 47,000 65,000 Net...
Exercise 3-3 On January 2, 2014, Prunce Company acquired 90% of the outstanding common stock of...
Exercise 3-3
On January 2, 2014, Prunce Company acquired 90% of the outstanding
common stock of Sun Company for $178,050 cash. Just before the
acquisition, the balance sheets of the two companies were as
follows:
Prunce
Sun
Cash
$263,470
$ 60,730
Accounts receivable (net)
143,210
22,500
Inventory
110,480
56,650
Plant and equipment (net)
414,170
101,680
Land
59,220
29,600
Total asset
$990,550
$271,160
Accounts payable
$111,630
$ 50,670
Mortgage payable
67,840
40,000
Common stock, $2 par value
416,700
69,670
Other contributed...
On January 1, 2018, Marshall Company acquired 100 percent of the outstanding common stock of Tucker...
On January 1, 2018, Marshall Company acquired 100 percent of the outstanding common stock of Tucker Company. To acquire these shares, Marshall issued $318,000 in long-term liabilities and 20,000 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Marshall paid $25,000 to accountants, lawyers, and brokers for assistance in the acquisition and another $10,000 in connection with stock issuance costs. Prior to these transactions, the balance sheets for the...
5. On January 1, 2019, P acquired all of the outstanding common stock of S for $1,000,000. On the...
need the answer to Part B only
5. On January 1, 2019, P acquired all of the outstanding common stock of S for $1,000,000. On the date of acquisition, the book value and fair market value of S's assets and liabilities were as follows: Book Value 200,000 300,000 160,000 340,000 Fair Market Value 300,000 500,000 Land Patent (10 yrs) Common Stock Retained Earnings a) Assuming that S uses push-down accounting, prepare the elimination entries as of 1/1/19. b) If P...
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 & inventaries $150,000 $75,000 Land 300,000 150,000 Property & equipment 337,500 150,000 Total assets $787,500 $375,000 Liabilities $225,000 $120,000 Common stock ($2 par) 30,000 15,000 Additional paid-in capital 420,000 225,000 Retained...
On January 1, 2019, Perry Company purchased 8,000 shares of Soho Company's common stock for $120,000....
On January 1, 2019, Perry Company purchased 8,000 shares of Soho
Company's common stock for $120,000. Immediately after the stock
acquisition, the statements of financial position of Perry and Soho
appeared as follows:
Question: Suppose instead that Perry acquired the 8,000 shares
for $20 per share including a $5 per share control premium. Prepare
a computation and allocation of difference schedule.
Assets Perry Soho Cash $ 39,000 $ 19,000 Accounts receivable 53,000 31,000 Inventory 42,000 25,000 Investment in Soho Company...
2. On January 1, 2012, Mace Co. acquired 75% of Lance Co.'s outstanding common stock. On...
2. On January 1, 2012, Mace Co. acquired 75% of Lance Co.'s outstanding common stock. On the same date, Lance acquired an 80% interest in Curle Co. Both of these investments were acquired when book value was equal to fair value of identifiable net assets acquired. Both of these investments were accounted using the initial value method. No dividends were distributed by either Lance or Curle during 2012 or 2013. Mace paid cash dividends each year equal to 40% of...
Exercise 3-3 On January 2, 2014, Prunce Company acquired 90% of the outstanding common stock of...
Exercise 3-3
On January 2, 2014, Prunce Company acquired 90% of the outstanding
common stock of Sun Company for $180,700 cash. Just before the
acquisition, the balance sheets of the two companies were as
follows:
Prunce
Sun
Cash
$282,130
$ 59,040
Accounts receivable (net)
142,020
24,810
Inventory
118,670
53,230
Plant and equipment (net)
395,640
92,960
Land
62,550
29,220
Total asset
$1,001,010
$259,260
Accounts payable
$106,440
$ 50,420
Mortgage payable
67,320
37,660
Common stock, $2 par value
421,400
76,960
Other contributed...
Exercise 3-3
On January 2, 2014, Prunce Company acquired 90% of the outstanding
common stock of Sun Company for $178,050 cash. Just before the
acquisition, the balance sheets of the two companies were as
follows:
Prunce
Sun
Cash
$263,470
$ 60,730
Accounts receivable (net)
143,210
22,500
Inventory
110,480
56,650
Plant and equipment (net)
414,170
101,680
Land
59,220
29,600
Total asset
$990,550
$271,160
Accounts payable
$111,630
$ 50,670
Mortgage payable
67,840
40,000
Common stock, $2 par value
416,700
69,670
Other contributed...
On January 1, 2018, Marshall Company acquired 100 percent of the outstanding common stock of Tucker Company. To acquire these shares, Marshall issued $318,000 in long-term liabilities and 20,000 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Marshall paid $25,000 to accountants, lawyers, and brokers for assistance in the acquisition and another $10,000 in connection with stock issuance costs. Prior to these transactions, the balance sheets for the...
need the answer to Part B only
5. On January 1, 2019, P acquired all of the outstanding common stock of S for $1,000,000. On the date of acquisition, the book value and fair market value of S's assets and liabilities were as follows: Book Value 200,000 300,000 160,000 340,000 Fair Market Value 300,000 500,000 Land Patent (10 yrs) Common Stock Retained Earnings a) Assuming that S uses push-down accounting, prepare the elimination entries as of 1/1/19. b) If P...
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 & inventaries $150,000 $75,000 Land 300,000 150,000 Property & equipment 337,500 150,000 Total assets $787,500 $375,000 Liabilities $225,000 $120,000 Common stock ($2 par) 30,000 15,000 Additional paid-in capital 420,000 225,000 Retained...
On January 1, 2019, Perry Company purchased 8,000 shares of Soho
Company's common stock for $120,000. Immediately after the stock
acquisition, the statements of financial position of Perry and Soho
appeared as follows:
Question: Suppose instead that Perry acquired the 8,000 shares
for $20 per share including a $5 per share control premium. Prepare
a computation and allocation of difference schedule.
Assets Perry Soho Cash $ 39,000 $ 19,000 Accounts receivable 53,000 31,000 Inventory 42,000 25,000 Investment in Soho Company...
2. On January 1, 2012, Mace Co. acquired 75% of Lance Co.'s outstanding common stock. On the same date, Lance acquired an 80% interest in Curle Co. Both of these investments were acquired when book value was equal to fair value of identifiable net assets acquired. Both of these investments were accounted using the initial value method. No dividends were distributed by either Lance or Curle during 2012 or 2013. Mace paid cash dividends each year equal to 40% of...
Exercise 3-3
On January 2, 2014, Prunce Company acquired 90% of the outstanding
common stock of Sun Company for $180,700 cash. Just before the
acquisition, the balance sheets of the two companies were as
follows:
Prunce
Sun
Cash
$282,130
$ 59,040
Accounts receivable (net)
142,020
24,810
Inventory
118,670
53,230
Plant and equipment (net)
395,640
92,960
Land
62,550
29,220
Total asset
$1,001,010
$259,260
Accounts payable
$106,440
$ 50,420
Mortgage payable
67,320
37,660
Common stock, $2 par value
421,400
76,960
Other contributed...
Most questions answered within 3 hours.
-
A 4.45 percent coupon municipal bond has 12 years left to
maturity and has a price...
asked 3 minutes ago -
13. In the book, “The Goal” to what country does Alex convince
Johnny the company should...
asked 5 minutes ago -
Write a simple Python program to find the day for the given
date. The procedure to...
asked 10 minutes ago -
5) A semi-permeable membrane is used to separate pyruvic acid
from an aqueous solution of 0.1...
asked 13 minutes ago -
The resistance of the body varies from approximately 500 kΩ
(when it is very dry) to...
asked 17 minutes ago -
Please explain how participation income and expenses are
allocated to each partner. Where is this defined?
asked 26 minutes ago -
The tires of a car make 61 revolutions as the car reduces its
speed uniformly from...
asked 42 minutes ago -
Peabody, Inc., sells fireworks. The company’s marketing director
developed the following cost of goods sold budget...
asked 46 minutes ago -
A signal transduction pathway includes the steps listed
below.
1. An inactive signal transduction molecule is...
asked 45 minutes ago -
1. The correlation coefficient determined for two variables has
a value of 0.89. Describe, in words,...
asked 51 minutes ago -
The following data relate to direct materials costs for
November:
Actual costs
4,700 pounds at $5.35...
asked 50 minutes ago -
Kyle, a 95.0 kg football player, leaps straight up into the air
(with no horizontal velocity)...
asked 1 hour ago