Module One Practice Problems and Solutions

Carla Vista Company is considering the acquisition of Kingbird, Inc. To assess the amount it might be willing to pay, Carla Vista makes the following computations and assumptions. A. B. C. Kingbird, Inc. has identifiable assets with a total fair value of $6,016,000 and liabilities of $3,719,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 25% higher than book value, and land with a fair value 50% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Kingbird, Inc. Kingbird, Inc.'s pretax incomes for the years 2020 through 2022 were $472,100, $573,300, and $372,700, respectively. Carla Vista believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments for the following items included in pretax earnings: Depreciation on Buildings (each year) Depreciation on Equipment…

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Sunland Homes Company is considering the acquisition of Cheyenne, Inc. early in 2025. To assess the amount, it might be willing to pay, Sunland Homes makes the following computations and assumptions. A. Cheyenne, Inc. has identifiable assets with a total fair value of $15,008,000 and liabilities of $8,813,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 30% higher than book value, and land with a fair value 75% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Cheyenne, Inc. B. Cheyenne, Inc.'s pretax incomes for the years 2022 through 2024 were $1, 202, 200, $ 1,503,000, and $951, 800, respectively. Sunland Homes believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments to the following items included in pretax earnings: Depreciation on buildings (each year)…

Sunland Homes Company is considering the acquisition of Oriole, Inc. early in 2025. To assess the amount, it might be willing to pay. Sunland Homes makes the following computations and assumptions. A B Oriole, Inc. has identifiable assets with a total fair value of $15,030,000 and liabilities of $8,815,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 30% higher than book value, and land with a fair value 75% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Oridle, Inc. Oriole, Inc's pretax incomes for the years 2022 through 2024 were $1,200,900, $1,500,800, and $955,000, respectively. Sunland Homes believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments to the following items included in pretax eamings: Depreciation on buildings (each year) C 962,900…

Current Attempt in Progress Tamarisk SpA has the following amounts reported in its general ledger at December 31, 2022. Organization costs Trademarks Bonds payable Deposits with advertising agency for ads to promote goodwill of company Excess of cost over fair value of net identifiable assets of acquired subsidiary Cost of equipment acquired for research and development projects; the equipment has an alternative future use Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years (all research phase) €22,800 13,700 35,800 10,800 75,800 Total amount reported for intangible assets 85,800 80,600 (a) On the basis of this information, compute the total amount to be reported by Tamarisk for intangible assets on its statement of financial position at December 31, 2022. As noted, the equipment has alternative future use.

Identify intangible assets in the given problem

P Company is considering the acquisition of S Inc. To assess the amount it might be willing to pay, P makes the following computations and assumptions: A. S Inc. has identifiable assets with a total fair value of $8,000,000 and liabilities of $5,300,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 30% higher than book value, and land with a fair value 60% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Barkley, Inc. B. S Inc.'s pretax incomes for the years 2010 through 2012 were $700,000, $900,000, and $550,000, respectively. P believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments for the following items included in pretax earnings: Depreciation on Buildings (each year) 580,000 Depreciation on Equipment (each year) 30,000 Extraordinary Loss (year 2012)…

Core Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Core purchased goodwill as part of the acquisition of Shipley Wireless Enterprises, which had the following figures: (Click the icon to view the data.) Requirements Journalize the entry to record Core's purchase of Shipley Wireless for $480,000 cash plus a $720,000 note payable. 1. 2. What special asset does Core's acquisition of Shipley Wireless identify? How should Core Telecom account for this asset after acquiring Shipley Wireless? Explain in detail. Requirement 1. Journalize the entry to record Core's purchase of Shipley Wireless for $480,000 cash plus a $720,000 note payable. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Accounts and Explanation Date Debit Credit Requireme Assets Equity Cash What specialus Gain on Disposal Goodwill Liabilities Loss on Disposal Notes Payable y? How should Core Telecom account for this asset after…

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Investment Property Determine the cost of the following items of investment acquired by Sasha Corporation during 2022; Land site for capital appreciation was acquired for P8,600,000. The company paid P430,000 commission to a real estate agent. Costs of P 135,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P 65,000. The cost of investment property is _____________ Land and building were acquired to be held for under operating leases. The company made a de payment of P4,000,000, issued 20,000 P200 par ordinary shares with a market price of P240 per share, and issued a three-year non-interest-bearing note for P6,000.000 note is payable in equal annual installments of P2,000,000 at the end of each year from the date of purchase. The prevailing interest rate for similar notes is 10%. 30% of the purchase price is allocated to the land. Investment property is recorded at __________

Just need help with part C

Use Newell Brands, Inc.'s financial statements to answer to the following questions.   According to the footnotes, what was the initial total acquisition cost of the Property, Plant, and Equipment that Newell Brands owns as of December 31, 2020?  $  _________________     According to the footnotes, what is the total acquisition cost of Land that Newell Brands owns as of December 31, 2020? $  _________________     According to the footnotes, which of the following methods does Newell Brands use to depreciate its Property, Plant, and Equipment? (Circle one)    Straight-Line   Double-Declining-Balance   Units-of-Activity     Provide the 2020 adjusting journal entry (both accounts and amounts) that Newell Brands made to record depreciation on its Property and Equipment. Assume that Newell Brands makes one adjusting journal entry for depreciation expense at the end of each fiscal year as part of its adjusting entries.                      Does…

Use Newell Brands, Inc.'s financial statements to answer to the following questions.   According to the footnotes, what was the initial total acquisition cost of the Property, Plant, and Equipment that Newell Brands owns as of December 31, 2020? $ _________________     According to the footnotes, what is the total acquisition cost of Land that Newell Brands owns as of December 31, 2020? $  _________________     According to the footnotes, which of the following methods does Newell Brands use to depreciate its Property, Plant, and Equipment? (Circle one)   Straight-Line   Double-Declining-Balance   Units-of-Activity     Provide the 2020 adjusting journal entry (both accounts and amounts) that Newell Brands made to record depreciation on its Property and Equipment. Assume that Newell Brands makes one adjusting journal entry for depreciation expense at the end of each fiscal year as part of its adjusting entries)                   Does Newell…

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Mateen Oil and Gas Company provides the following data: 2019 2020 2021 Unproved property acquisition Proved property acquisition 35,000 55,000 81,000 60,000 50,000 70,000 G&G 450,000 430,000 475,000 Exploratory drilling (including dry hole) 318,000 473,000 535,000 Development drilling 155,000 95,000 190,000 Extensions and discoveries 83,000 78,000 85,600 Equipments 60,000 55,000 85,000 Use formula 1 without revision to find the Finding costs per BOE for 2019 9.2530 O 9.2035 O 9.2005 5.2930

Problem 1: Joan Company provided the following data for 2019: Value of biological asset at acquisition cost on January 1, 2019 600,000 Fair valuation surplus on initial recognition at fair value on January 1, 2019 700,000 Change in fair value to December 31, 2019 due to growth and price fluctuation 100,000 Decrease in fair value due to harvest 90,000 Decrease due to sale of biological asset 400,000 Required: Prepare all indicated entries for 2019 necessary to record the transactions relating to the biological asset. Determine the carrying amount of the biological asset on December 31, 2019.   Problem 2: Honey Company has a herd of 10 2-year old animals on January 1, 2019. One animal aged 2.5 years was purchased on July 1, 2019 for P108, and one animal was born on July 1, 2019. No animals were sold or disposed during the year. The active market provided the following fair value less cost to sell: 2 – year old animal on January 1                                   100 2.5 – year old…

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V6.  A company purchases land, building and equipment for $1,500,000. An independent appraisal shows that the best available indications of fair value at the time of purchase are: land: $760,000; building: $540,000; and equipment: $320,000. The purchase is financed through long-term debt. Required: Prepare the journal entry to record the purchase Prepare the journal entry to record the purchase:

2. What amount of unrealized holding gain should be PROBLEMS Problem 23-1 (IAA) Simple Company reported the following information in relation to land: * The entity purchased land on January 1, 2021 for P500,000 cash. On December 31, 2021, the land has a current replacement cost of P600.000. * On December 31, 2022, the land has a current replacement cost of P750,000. The entity sold the land for P1,000,000 cash on December 31, 2023. On this date, the current replacement cost of the land is P800,000. - What amount of unrealized holding gain should be reported in 2021? a. 600,000 b. 500,000 C. 100,000 d. 0. reported in 2022? a. 250,000 150,000 c. 100,000 d. 0. reported in 2023? a. 300,000 b. 250,000 50,000 d. C. in 2023? a. 500,000 b. 250,000 C. 200,000 d. 150,000 711

12 The following costs were incurred by ABCDEFGH, Inc.. during 2020:     July 1  Organization fees  P120,000  July 2  Land site and old building  1,890,000  July 3  Option payments  250,000  July 20  Broker’s fees on property acquired  110,400  July 30  Cost of remodeling the building  60,000  August 30  Salaries of executives  360,000  December 21  Real property taxes  240,000     Additional information:  The building acquired had a fair value of P450,000 while the land was currently appraised at P1,800,000  P50,000 of the option money paid were for properties not acquired.  The executives had no participation on the remodeling of the building  The property taxes were for the 2020 calendar year.     How much is the cost of land?  Group of answer choices  1,856,320  1,992,320  1,512,000  2,288,000

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