Chapter 5 practice problems

Mini-Exercise 6-7 (Algo) Goodwill LO 6-9 Backstreets Company recently acquired all of Jungleland Incorporated's net assets in a business acquisition. The cash purchase price was $9.1 million. Jungleland's assets and liabilities had the following appraised values immediately prior to the acquisition: land, $2.5 million; buildings, $4.2 million; inventory, $3.0 million; long-term notes payable, for which Backstreets Company assumes payment responsibilities, $2.3 million. Required: How much goodwill will result from this transaction? Note: Enter your answer in whole dollars. Goodwill

Poblem 17-22 and 17-23 answer?

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assets turnover

General accounting question

ces The following book and fair values were available for Westmont Company as of March 1. Book Value Fair Value $ 439,750 401,250 776,250 1,019,250 2,346,750 873,750 (114,500) Inventory Land Buildings Customer relationships. Accounts payable Connon stock Additional paid-in capital Retained earnings, 1/1 Revenues Expenses View transaction list Arturo pays cash of $4,403,500 to acquire Westmont. No stock is issued and Arturo pays $50,600 for legal fees to complete the transaction. 2,025,000 Prepare Arturo's journal entries to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No Journal entry required" in the first account field.) 1 0 (114,500) (2,000,000) 2 (500,000) (445,000) (506,500) 325,000 Journal entry worksheet Note: Enter debits before credits, Transaction Record the acquisition of Westmont Company. General Journal Debit Credit

Dynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items: Patent with 4 remaining years of legal life Goodwill $40,000 35,000 Dynamo's financial condition just prior to the acquisition of these assets is shown in the following statements model: Assets Rev. Cash Flow Cash 90,000 + Patent NA Goodwill NA Liab. + Equity NA + 90,000 Exp. W Net Inc. NA NA NA NA Required a. Compute the annual amortization expense for these items. b. Show the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model like the one shown earlier Complete this question by entering your answers in the tabs below. Required A Required t Show the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model like the one shown earlier. (In the Cash Flo initials OA to designate operating activity, IA for investing activity, FA for…

PROBLEM VI A condensed Statement of Financial Position at December 31, 2017 for Acquiree Company follows: Carrying Value P1,368,000 1,592,500 585,000 P3,545,500 Fair Value P1,300,000 1,500,000 Current Assets, including cash of P250,000 Plant Assets Goodwill Total Assets 607,500 780,000 1,000,000 500,000 657,500 P3,545,500 Current Liabilities 607,600 797,500 Long-term debt Ordinary shares, par P20 Share premium Retained earnings Total Liabilities and Equity On January 2, 2018, Acquirer Company paid P1,500,000 cash for the net assets of the Acquiree Company (excluding cash), after which the acquiree was dissolved. This amount includes a reimbursement of the acquisition related cost paid by the Acquiree Company. A total of P147,500 out of the pocket cost was paid on this date, P57,500 of which were paid by the Acquirer Company and the reminder pertains to legal fees directly related to the business combination which was paid by the Acquiree Company. 1. What amount of goodwill is…

Vertical Analysis of Balance Sheet Balance sheet data for Kwan Company on December 31, the end of two recent fiscal years, follow: Current Year Previous Year Current assets $300,300 $186,760 Property, plant, and equipment 446,160 392,840 Intangible assets 111,540 64,400 Current liabilities 163,020 90,160 Long-term liabilities 368,940 270,480 Common stock 68,640 77,280 Retained earnings 257,400 206,080 Prepare a comparative balance sheet for both years, stating each asset as a percent of total assets and each liability and stockholders' equity item as a percent of the total liabilities and stockholders' equity. If required, round percentages to one decimal place.

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QUESTION 26 Pace Corporation acquired 100 percent of Spin Company's common stock on January 1, 20X9. Balance sheet data for the two companies immediately following the acquisition follows: Item PaceCorporation SpinCompany Cash   $ 30,000       $ 25,000     Accounts Receivable     80,000         40,000     Inventory     150,000         55,000     Land     65,000         40,000     Buildings and Equipment     260,000         160,000     Less: Accumulated Depreciation     (120,000 )       (50,000 )   Investment in Spin Company Stock     150,000               Total Assets   $ 615,000       $ 270,000     Accounts Payable     $45,000         $33,000     Taxes Payable     20,000         8,000     Bonds Payable     200,000         100,000     Common Stock     50,000         20,000     Retained Earnings     300,000         109,000     Total Liabilities and Stockholders' Equity   $ 615,000       $ 270,000     At the date of the business combination, the book…

AssetsCurrent Assets:   Cash                       $20,000   Accounts Receivable               18,500   Raw Materials Inventory           9,000   Finished Goods Inventory           16,000   Total Current Assets                       $63,500Property Plant and Equipment               130,000Less: Accumulated Depreciation               (70,000)   60,000Total Assets                               $123,500LiabilitiesCurrent Liabilities:   Accounts Payable                       $11,600Stockholders’ EquityCommon Stock                       $90,000Retained Earnings                   21,900   Total Stockholders’’ Equity                   111,900Total Liabilities and Stockholders’ Equity               $123,500Additional Information for the first quarter of 2021 is as follows:1.   Forecasted Sales are 1,400 youth bats and 3,300 adult bats2.   Finished Goods Inventory on 12/31/20 includes 700 youth bats at $15 each and 550 adult bats at $10 each3.   Desired ending Finished Goods Inventory is 220…

AssetsCurrent Assets:   Cash                       $20,000   Accounts Receivable               18,500   Raw Materials Inventory           9,000   Finished Goods Inventory           16,000   Total Current Assets                       $63,500Property Plant and Equipment               130,000Less: Accumulated Depreciation               (70,000)   60,000Total Assets                               $123,500LiabilitiesCurrent Liabilities:   Accounts Payable                       $11,600Stockholders’ EquityCommon Stock                       $90,000Retained Earnings                   21,900   Total Stockholders’’ Equity                   111,900Total Liabilities and Stockholders’ Equity               $123,500Additional Information for the first quarter of 2021 is as follows:1.   Forecasted Sales are 1,400 youth bats and 3,300 adult bats2.   Finished Goods Inventory on 12/31/20 includes 700 youth bats at $15 each and 550 adult bats at $10 each3.   Desired ending Finished Goods Inventory is 220…

AssetsCurrent Assets:   Cash                       $20,000   Accounts Receivable               18,500   Raw Materials Inventory           9,000   Finished Goods Inventory           16,000   Total Current Assets                       $63,500Property Plant and Equipment               130,000Less: Accumulated Depreciation               (70,000)   60,000Total Assets                               $123,500LiabilitiesCurrent Liabilities:   Accounts Payable                       $11,600Stockholders’ EquityCommon Stock                       $90,000Retained Earnings                   21,900   Total Stockholders’’ Equity                   111,900Total Liabilities and Stockholders’ Equity               $123,500Additional Information for the first quarter of 2021 is as follows:1.   Forecasted Sales are 1,400 youth bats and 3,300 adult bats2.   Finished Goods Inventory on 12/31/20 includes 700 youth bats at $15 each and 550 adult bats at $10 each3.   Desired ending Finished Goods Inventory is 220…

Question 6 Week 12 On 1 July 2014 Padma Ltd acquires 25 per cent of the issued capital of Jamuna Ltd for a cash consideration of $360 000.At the date of acquisition, the shareholders’ equity of Jamuna Ltd is:Share capital $450 000Retained earnings $300 000Total shareholders’ equity 750 000Additional information• On the date of acquisition, buildings have a carrying amount in the accounts of Jamuna Ltd of $240 000 and amarket value of $300 000. The buildings have an estimated useful life of 10 years after 1 July 2014.• For the year ending 30 June 2015 Jamuna Ltd records an after-tax profit of $90 000, from which it pays adividend of $30 000.• For the year ending 30 June 2016 Jamuna Ltd records an after-tax profit of $300 000, from which it pays adividend of $150 000.• Assume a tax rate of 30% is assumedRequiredApply equity method of accounting to:(a) Calculate the amount of goodwill at the date of acquisition (b) Prepare the journal entries for the year ending 30 June 2015 (c) Prepare…

A-5

ation in ear: During uilding Pl,160,000 800,000 000,000 been 1,220,000 1,200,000 1,180,000 d. 1,160,000 b. units. C. goods to be arged Grey Company acquired a machine with a cash price of abor. P2,000,000. 400,000 1,200,000 800,000 Down payment n 000 shares of Grey Company at fair value Prior to use, installation cost of P50,000 was incurred. The achine has a residual value of P100,000. What is the initial measurement of the new machine? ring 8. 2,000,000 b. 2,400,000 C. 2,050,000 d. 2,450,000 ry Problem 23-14 (IAA) ost. Çorner Company puchased a van with a list price of P3,000,000. The dealer granted a 15% reduction in list price nd and an additional 10% cash discount on the net price if payment is made in 30 days. at Irrecoverable taxes amounted to P40,000 and the entity paid an extra P30,000 to have a special horn installed. ad What amount should be recorded as initial cost of the van? 2 2,550,000 0. 2,335,500 at 2,365,000 d. 2,325,000 payment plan but a have P120,000 was and…

ull touch 1:27 PM 50% Expert Q&A Done P Company purchased 80% of the outstanding common stock of S Company on January 2, 2011, for $350,000. And any difference between the value implied by the purchase price of the investment and the book value of net assets acquired relates to subsidiary land. The book values of S Company's other assets and liabilities are equal to their fair values. Balance sheets for P Company and S Company immediately after the stock acquisition were as follows: P Company $ 166,000 S Company $ 80,000 Current assets Investment in S Company Plant and equipment (net) 350,000 560,000 -0- 224,000 Land 40,000 $1,116,000 120,000 Total $424,000 Current liabilities Long-term notes payable Common stock $ 90,000 $ 28,000 -0- 46,000 480,000 150,000 Other contributed capita Retained earnings 244,000 64,000 302.000 $1,116,000 136.000 Total $424,000 The consolidated balance sheet for P and S Companies on the date of acquisition will include: * O Total Assets of $1,255,500 O Total…

Problem 15-5 (IAA) Aborigine Company reported the following accounts in the statement of financial position on January 1, 2020: Noncurrent assets Financial asset - FVOCI Market adjustment for unrealized loss 4,000,000 ( 500,000) Market value 3,500,000 Other comprehensive income Unrealized loss ( 500,000) An analysis of the investment portfolio revealed the following on December 31, 2020. Cost Market XYZ ordinary share ABC ordinary share RST preference share 1,000,000 2,500,000 500,000 1,200,000 2,000,000 200,000 4,000,000 3,400,000 On July 1, 2021, the ABC ordinary share was sold for P2,100,000. On December 31, 2021, the remaining investments have the following market value: XYZ ordinary share RST preference share 1,000,000 150,000 Required: 1. Prepare journal entry to recognize the decrease in value on December 31, 2020. 2. Prepare journal entry to record the sale of ABC ordinary share on July 1, 2021. 3. Prepare journal entry on December 31, 2021 to recognize the change in fair…