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Vader Company purchased 100 percent of the common shares of Skywalker Company by issuing shares of common stock valued at $900,000. Selected accounts from Vader's balance sheet at the date of combination are as follows: Inventory Building and Equipment (net) Common Stock $700,000 1,400,000 840,000 Retained Earnings Selected accounts from the balance sheet of Skywalker at acquisition are as follows: Inventory Building and Equipment (net) Common Stock Additional Paid-In Capital Retained Earnings (60,000) On the date of purchase, Skywalker's inventory and buildings and equipment had fair values of $255,000 and $870,000, respectively. 2,000,000 $200,000 900,000 450,000 450,000 Based on the information given above, the amount to be reported for inventory in the consolidated balance sheet immediately after the combination is: O 1. $1,000,000 O 2. $955,000 O 3. $900,000 4. $700,000 5. None of the above

Vader Company purchased 100 percent of the common shares of Skywalker Company by issuing shares of common stock valued at $900,000. Selected accounts from Vader's balance sheet at the date of combination are as follows: $700,000 1,400,000 Inventory Building and Equipment (net) Common Stock Retained Earnings Selected accounts from the balance sheet of Skywalker at acquisition are as follows: Inventory Building and Equipment (net) Common Stock Additional Paid-In Capital 450,000 Retained Earnings (60,000) On the date of purchase, Skywalker's inventory and buildings and equipment had fair values of $255,000 and $870,000, respectively. Based on the information given above, the amount to be reported for goodwill in the consolidated balance sheet immediately after the combination is: 1.$0 O 2. $35,000 3. $60,000 ○ 4. $25,000 O 5. None of the above 840,000 2,000,000 $200,000 900,000 450,000

Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2. Balance sheet datafor the two companies immediately following acquisition follow: 1. What amount of inventory will be reported?A. P 179,000 C. P 210,500B. P 200,000 D. P 215,0002. What amount of goodwill will be reportedA. P 0 C. P 40,000B. P 28,000 D. P 52,0003. What amount of total assets will be reported?A. P 1,081,000 C. P 1,196,500B. P 1,121,000 D. P 1,231,50

Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $216,000. At that date, the fair value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common stock for $97,000. Summarized balance sheets for Split on the dates indicated are as follows: Assets Cash Accounts Receivable Inventory Buildings & Equipment (net) Total Assets Liabilities & Equities Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities & Equities 20X7 $ 49,000 51,000 72,000 370,000 $542,000 December 31 20X8 Balance in investment account $ 79,000 91,000 102,000 350,000 $622,000 20X9 $ 99,000 121,000 162,000 330,000 $712,000 $ 77,000 $127,000 $167,000 105,000 105,000 105,000 155,000 155,000 155,000 205,000 235,000 285,000 $542,000 $622,000 $712,000 Split paid dividends of $22,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and…

On December 31, 20X8, Paragraph Corporation acquired 80 percent of Sentence Company's common stock for $136,000. At the acquisition date, the book values and fair values of all of Sentence's assets and liabilities were equal. Paragraph uses the equity method in accounting for its investment. Balance sheet information provided by the companies at December 31, 20X8, immediately following the acquisition is as follows: Cash Accounts Receivable Inventory Fixed Assets (net) Investment in Sentence Co. Total Debits Accounts Payable Notes Payable Common Stock Retained Earnings Total Credits Assets Paragraph Corporation $ 74,000 120,000 180,000 Total Assets Liabilities and Stockholders' Equity 350,000 136,000 $860,000 Total Liabilities and Stockholders' Equity $ 65,000 350,000 150,000 295,000 $860,000 PARAGRAPH CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X8 Required: Prepare a consolidated balance sheet for Paragraph at December 31, 20X8. Sentence Company $ 20,000…

On May 1, Burns Corporation acquired 100 percent of the outstanding ownership shares of Quigley Corporation in exchange for $728,000 cash. At the acquisition date, Quigley's book and fair values were as follows: Cash Receivables Inventory Land Building and equipment (net) Patented technology Total assets Accounts payable Long-term liabilities Common stock ($5 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders equity Total assets Assets Book Value $ 112,000 $ 218,000 232,000 $ 177,000 323,000 0 $1,062,000 $ 162,500 $ 638,000 210,000 90,000 (38,500) $1,062,000 Burns directs Quigley to seek additional financing for expansion through a new long-term debt issue. Consequently, Quigley will issue a set of financial statements separate from that of its new parent to support its request for debt and accompanying regulatory filings. Quigley elects to apply pushdown accounting in order to show recent fair valuations for its assets. Prepare a separate…

On May 1, Burns Corporation acquired 100 percent of the outstanding ownership shares of Quigley Corporation in exchange for $733,000 cash. At the acquisition date, Quigley's book and fair values were as follows: Cash Receivables Inventory Land Building and equipment (net) Patented technology Total assets Accounts payable Long-term liabilities Common stock ($5 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders equity Total assets Book Value Fair Value $ 101,000 $ 101,000 229,000 229,000 254,000 323,000 157,500 118,500 330,000 409,000 0 220,000 Assets $1,071,500 $ 1,400,500 $ 146,000 $ 666,000 210,000 90,000 (40,500) $1,071,500 Burns directs Quigley to seek additional financing for expansion through a new long-term debt issue. Consequently, Quigley will issue a set of financial statements separate from that of its new parent to support its request for debt and accompanying regulatory filings. Quigley elects to apply pushdown accounting in order to…

Problem Company owns 90 percent of Solution Dairy's stock. The balance sheets of the two companies immediately after the Solution acquisition showed the following amounts: Assets Cash & Receivables. Inventory Land Buildings & Equipment (net) Investment in Solution Dairy Total Assets Liabilities & Stockholders' Equity Current Payables Long-Term Liabilities Common Stock Retained Earnings Total Liabilities & Stockholders' Equity Problem Company $ 132,000 211,000 74,000 409,000 259,200 $ 1,085,200 Solution Dairy $ 88,000 108,000 54,000 228,000 $ 478,000 $ 77,000 254,200 382,000 372,000 $ 30,000 180,000 66,000 202,000 $ 1,085,200 $ 478,000 The fair value of the noncontrolling interest at the date of acquisition was determined to be $28,800. The full amount of the increase over book value is assigned to land held by Solution. At the date of acquisition, Solution owed Problem $9,000 plus $1,100 accrued interest. Solution had recorded the accrued interest, but Problem had not Required: Prepare…

Parent Company acquired 90% of Son Incorporate on January 31, 20X2 in exchange for cash. The book value of Son's individual assets and liabilities approximated their acquisition- date fair values. On the date of acquisition, Son reported the following: Cash Inventory Plant Assets (net) Property Total Assets $ 350,000 100,000 Current Liabilities $ 120,000 320,000 Common Stock 500,000 $ 1,270,000 Retained Earnings Total Liabilities and Equity 100,000 1,050,000 $ 1,270,000 During the year Son Incorporate reported $310,000 in net income and declared $15,000 in dividends. Parent Company reported $520,000 in net income and declared $25,000 in dividends. Parent accounts for their investment using the equity method. Required: 1) What journal entry will Parent make on the date of acquisition to record the Investment in Son Incorporate? 2) If Parent were to prepare a consolidated balance sheet on the acquisition date (January 31, 20X2), what is the basic consolidation entry Parent would use in…

Puzzle Corporation acquired 100 percent of the common stock of Solver Company by issuing 10,000 shares of $10 par common stock with a market value of $60 per share. Summarized balance sheet data for the two companies immediately preceding the acquisition are as follows:   Puzzle Corporation Solver Corporation Book Value Fair Value Book Value Fair Value Total Assets $ 1,200,000 $ 1,500,000 $ 900,000 $ 1,300,000 Total Liabilities $ 800,000 $ 700,000 $ 600,000 $ 750,000 Total Stockholders Equity 400,000   300,000     $ 1,200,000   $ 900,000   Required: Determine the dollar amounts to be presented in the consolidated balance sheet for (1) total assets, (2) total liabilities, and (3) total stockholders' equity.

Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $98,000. At that date, the fair value of the noncontrolling interest was $42,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Phone Corporation Smart Corporation Cash $ 52,300 $ 39,000 Accounts Receivable 99,000 59,000 Inventory 136,000 92,000 Land 66,000 49,000 Buildings & Equipment 417,000 268,000 Less: Accumulated Depreciation (151,000) (73,000) Investment in Smart Corporation 98,000   Total Assets $ 717,300 $ 434,000 Accounts Payable $ 141,500 $ 27,000 Mortgage Payable 300,800 288,000 Common Stock 72,000 40,000 Retained Earnings 203,000 79,000 Total Liabilities & Stockholders’ Equity $ 717,300 $ 434,000 At the date of the business combination, the book values of Smart’s assets and liabilities approximated fair value except for inventory, which had a fair value of…

Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $98,000. At that date, the fair value of the noncontrolling interest was $42,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Phone Corporation Smart Corporation Cash $ 52,300 $ 39,000 Accounts Receivable 99,000 59,000 Inventory 136,000 92,000 Land 66,000 49,000 Buildings & Equipment 417,000 268,000 Less: Accumulated Depreciation (151,000) (73,000) Investment in Smart Corporation 98,000   Total Assets $ 717,300 $ 434,000 Accounts Payable $ 141,500 $ 27,000 Mortgage Payable 300,800 288,000 Common Stock 72,000 40,000 Retained Earnings 203,000 79,000 Total Liabilities & Stockholders’ Equity $ 717,300 $ 434,000 At the date of the business combination, the book values of Smart’s assets and liabilities approximated fair value except for inventory, which had a fair value of…

Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $98,000. At that date, the fair value of the noncontrolling interest was $42,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Phone Corporation Smart Corporation Cash $ 52,300 $ 39,000 Accounts Receivable 99,000 59,000 Inventory 136,000 92,000 Land 66,000 49,000 Buildings & Equipment 417,000 268,000 Less: Accumulated Depreciation (151,000) (73,000) Investment in Smart Corporation 98,000   Total Assets $ 717,300 $ 434,000 Accounts Payable $ 141,500 $ 27,000 Mortgage Payable 300,800 288,000 Common Stock 72,000 40,000 Retained Earnings 203,000 79,000 Total Liabilities & Stockholders’ Equity $ 717,300 $ 434,000 At the date of the business combination, the book values of Smart’s assets and liabilities approximated fair value except for inventory, which had a fair value of…

Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $97,300. At that date, the fair value of the noncontrolling interest was $41,700. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Phone Corporation Smart Corporation Cash $ 58,300 $ 22,000 Accounts Receivable 109,000 49,000 Inventory 144,000 79,000 Land 73,000 36,000 Buildings & Equipment 426,000 266,000 Less: Accumulated Depreciation (166,000) (75,000) Investment in Smart Corporation 97,300   Total Assets $ 741,600 $ 377,000 Accounts Payable $ 142,500 $ 26,000 Mortgage Payable 331,100 233,000 Common Stock 68,000 39,000 Retained Earnings 200,000 79,000 Total Liabilities & Stockholders’ Equity $ 741,600 $ 377,000 At the date of the business combination, the book values of Smart’s assets and liabilities approximated fair value except for inventory, which had a fair value of…

Johannes Inc. acquired 80 percent of Corner Brook Ltd. common shares on January 1, Year 4, for $744,000. At that date, the fair value of the non-controlling Interest was $186,000. Corner Brook's balance sheet contained the following amounts at the time of the combination: Cash Accounts Receivable Inventory Construction Work in Progress Other Assets (net) Total Assets 66,000 140,000 40,000 Accounts Payable $ 106,000 Bonds Payable 610,000 950,000 Common Shares ($10 par value) Retained Earnings 400,000 530,000 450,000 $1,646,000 $ 1,646,000 Total Liabilities & Equities During each of the next three years, Corner Brook reported net income of $120,000 and paid dividends of $60,000. On January 1, Year 6, Johannes sold 8,800 of the Corner Brook shares for $260,000 in cash. Johannes used the equity method in accounting for its ownership of Corner Brook. Required: (a) Compute the balance in the Investment account reported by Johannes on January 1, Year 6, before its sale of shares. (Omit $ sign…

Wooden Reed Inc. (WRI) issued 30,000 voting common shares to acquire all of the assets and liabilities of Creative Instrument Ltd. (CIL). On the acquisition date, WRI's shares were trading at $22 per share. After the transaction, CIL owned 20% of WRI's outstanding shares. The following information relates to CIL on the acquisition date: Cash Accounts receivable Inventory Property, plant, and equipment (net) Current liabilities Long-term debt Common shares Retained earnings WRI S $ S 75,000 180,000 220,000 880,000 1,355,000 75,000 235,000 100,000 945,000 $ 1,355,000 carrying value CIL $ 35,000 67,500 carrying value 125,000 350,000 $ 577,500 $ 25,000 125,000 165,000 262,500 $ 577,500 CIL fair value $ 35,000 69,500 147,000 388,000 25,000 125,000 Based on the information provided, which of the amounts below correctly reflect amounts that would appear on WRI's statement of financial position?

On January 1, 2024, Windsor Company purchased 8,896 shares of Sheridan Company's common stock for $131,000. Immediately after the stock acquisition, the statements of financial position of Windsor and Sheridan appeared as follows: Assets Windsor Sheridan Cash $40,850 $20,370 Accounts receivable 50,180 32,780 Inventory 44,020 26,230 Investment in Sheridan Company 131,000 Plant assets 160,360 101,030 Accumulated depreciation-plant assets (55,790) (18,940) Total $370,620 $161,470 Liabilities and Owners' Equity Current liabilities $16,910 $23,570 Mortgage notes payable 40,080 Common stock, $10 par value 112,700 111,200 Other contributed capital 125,210 15,650 Retained earnings 75,720 11,050 Total $370,620 $161,470 (a1) (a2) Prepare a schedule to compute the difference between book value of equity and the value implied by the purchase price. Any difference between the book value of equity and the value implied by the purchase price relates to subsidiary plant assets. $ Parent Share $ Non-…

On January 1, 2024, Windsor Company purchased 8,896 shares of Sheridan Company's common stock for $131,000. Immediately after the stock acquisition, the statements of financial position of Windsor and Sheridan appeared as follows: Assets Windsor Sheridan Cash $40,850 $20,370 Accounts receivable 50,180 32,780 Inventory 44,020 26,230 Investment in Sheridan Company 131,000 Plant assets 160,360 101,030 Accumulated depreciation-plant assets (55,790) (18,940) Total $370,620 $161,470 Liabilities and Owners' Equity Current liabilities $16,910 $23,570 Mortgage notes payable 40,080 Common stock, $10 par value 112,700 111,200 Other contributed capital 125,210 15,650 Retained earnings 75,720 11,050 Total $370,620 $161,470 Prepare a consolidated balance sheet workpaper as of January 1, 2024. Cash WINDSOR COMPANY AND SUBSIDIARY SHERIDAN Consolidated Balance Sheet Workpaper January 1, 2024 Windsor Sheridan Eliminations Noncontrolling Consolidated Company Company Debit Credit Interest Balance 40.850…

On December 31, 20X8, Parkway Corporation acquired 80 percent of Street Company's common stock for $104,000 cash. The fair value of the noncontrolling interest at that date was determined to be $26,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:   Parkway Corporation Street Company Cash $ 90,000 $ 20,000 Accounts Receivable 80,000 35,000 Inventory 100,000 40,000 Land 40,000 60,000 Buildings and Equipment 300,000 100,000 Less: Accumulated Depreciation (100,000) (40,000) Investment in Street Company 104,000   Total Assets $ 614,000 $ 215,000 Accounts Payable 120,000 30,000 Mortgage Payable 200,000 100,000 Common Stock 50,000 25,000 Retained Earnings 244,000 60,000 Total Liabilities and Equity $ 614,000 $ 215,000 On that date, the book values of Street's assets and liabilities approximated fair value except for inventory, which had a fair value of $45,000, and buildings and equipment,…

Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2. Balance sheet datafor the two companies immediately following acquisition follow 4. What amount of investment in Silk will be reported?A. P 0 C. P 150,500B. P 140,000 D. P 215,0005. What amount of liabilities will be reported?A. P265,000 C. P 622,000B. P 436,500 D. P 701,5006. What amount will be reported as non-controlling interest?A. P 42,000 C. P 60,900B. P 52,500 D. P 64,500

POPCORN Corporation acquired a 90% interest in the outstanding stock of SALT Corporation for $540,000 on 1/1/X1. At this time, the stockholders’ equity of SALT consisted of $400,000 of capital stock and $50,000 of retained earnings. The following table represents only those assets and liabilities of Salt which had book values different than their fair values at the date of acquisition:     Book Value Fair Value   Inventory $ 20,000 $ 15,000 Sold X1 Land 30,000 40,000 Still owned Buildings 10,000 50,000 Remaining life 8 years Notes Payable (50,000) (40,000) Matures on 12/31/X5   Comparative Balance Sheets for POPCORN and SALT AT 12/31/X3 are presented here:   Popcorn Corporation & Subsidiary Consolidated Balance Sheet Workpaper For the Year Ended 12/31/X3 Assets: POPCORN SALT Debits Credits Consolidated Other Assets $355,000 $100,000       Inventory 100,000 50,000       Land…

On 1 January 20X9, JB Enterprises acquired 70 per cent of the shares of Good Company. The separate condensed statements of financial position of JB Enterprises and of Good Company immediately after the acquisition appeared as shown below: (all amounts in €)                                    JB   Good Company Assets Property, plant and equipment (net)   18.750.000     2.600.000 Investment in Good Company 3.600.000   - Inventories 1.000.000   740.000 Cash 13.550.000   560.000 Trade and other receivables      4.400.000         660.000      41.300.000      4.560.000 Equity and Liabilities Share capital   10.000.000     2.000.000 Reserves 16.200.000   1.600.000 Profit for the year 20X4 1.600.000   240.000 Provisions 100.000   250.000 Current liabilities     13.400.000         470.000      41.300.000      4.560.000 Additional information (at acquisition…

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 values of…

Peace Computer Corporation acquired 75 percent of Symbol Software Company’s stock on January 2, 20X3, by issuing bonds with a par value of $85,250 and a fair value of $102,750 in exchange for the shares. Summarized balance sheet data presented for the companies just before the acquisition follow:   Peace Computer Corporation Symbol Software Company Book Value Fair Value Book Value Fair Value Cash $ 216,000 $ 216,000 $ 62,000 $ 62,000 Other Assets 406,000 406,000 137,000 137,000 Total Debits $ 622,000   $ 199,000   Current Liabilities $ 82,000 82,000 $ 62,000 62,000 Common Stock 290,000   62,000   Retained Earnings 250,000   75,000   Total Credits $ 622,000   $ 199,000   Required: Prepare a consolidated balance sheet immediately following the acquisition.

On January 1, 20X6, Pumpkin Corporation acquired 70 percent of Spice Company's common stock for $210,000 cash. The fair value of the noncontrolling interest at that date was determined to be $90,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Cash Accounts Receivable Pumpkin $ 50,000 70,000 Spice $ 15,000 25,000 Inventory 30,000 20,000 Land 150,000 80,000 Buildings and Equipment 250,000 200,000 Less: Accumulated Depreciation (70,000) (20,000) Investment in Spice Co. 210,000 Total Assets $690,000 $320,000 Accounts Payable $ 40,000 $ 10,000 Bonds Payable 150,000 40,000 Common Stock 300,000 90,000 200,000 $690,000 180,000 $320,000 Retained Earnings Total Liabilities and Equity At the date of the business combination, the book values of Spice's assets and liabilities approximated fair value except for inventory, which had a fair value of $30,000, and land, which had a fair value of $95,000. Based on the preceding…

B Co acquired 100% of the voting common shares of SCo, by issuing bonds with a par value and fair value of $75,000. Immediately prior to the acquisition, B reported total assets of $250,000, liabilities of $140,000, and stockholders' equity of $110,000. At that date, S reported total assets of $200,000, liabilities of $125,000, and stockholders' equity of $75,000 Based on the preceding information, what amount of total assets did � report in its balance sheet immediately after the acquisition? Select one: a. 325,000 b. 450,000 c. 375,000 d. 250,000          Answer..

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