1 Nutty Company made the following individuni cashpurchases:Land and buildingMachinery and office equipmentDelivery equipment6,000,0001,800,000500,000An appraisal disclosed the following fair value:Land1,000,0003,000,000BuildingMachineryOffice equipmentDelivery equipment800,000400,000350,0002. Nutty Company nequired the assets of another entity withthe following fair value:LandBuildingMachinery1,000,0005,000,0002,000,000The entity inaued 60,000 ahares with P100 par value inexchange. The share had a quoted price of P150 on the dateof purchase of the property.3. Received a parcel of land located in Davao City from aphilanthropist as an inducement to locate a plant in thecity. The land has a fair value of P1,500,000.4. The entity paid cash for machinery, P900,000 subject to 2%cash discount, and freight on machinery, P35,000.5. The entity acquired furniture and fixtures by issuing aP400,000 two-year noninterest-bearing note. In similartransactions, the entity has paid 12% interest.The present value of 1 at 12% for 2 years is .797, and thepresent value of an annuity of 1 at 12% for 2 years is 1.69.Required:Prepare journal entries to record the transactions.

Generally accepted accounting principles, or GAAP, require a business to record an exchange of stock…

Answered: 1 Nutty Company made the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sensitive Company paid P500,000 and gave a plot of undeveloped land with a carrying amount of P3,200,000 and a fair value of P4,500,000 to another entity in exchange for a plot of undeveloped land with a fair value of P5,000,000. The land was carried on the other entity's books at P3,500,000. The configuration of cash flows from the land acquired is expected to be significantly different from the configuration of cash flows of the land exchanged. What amount should be recognized as carrying amount of land received in exchange by Sensitive Company?
ACME Co. paid $110,000 for the net assets of Comb Corp. At the time of the acquisition the following information was available related to Comb's balance sheet: Book Value Fair Value Current Assets $50,000 $ 50,000 Building 80,000 100,000 Equipment 40,000 50,000 Liabilities 30,000 30,000 What is the amount recorded by ACME for the Building? a. $110,000 b. $20,000 c. $80,000 d. $100,000
One of the companies purchased a set of fixed assets for an amount of 12 million dinars in cash. The fair market value of these assets was as follows: lands 6 million dinars buildings 5 million dinars machines 3 million dinars the cars 4 million dinars Required/recorded purchase for these assets
Show the solution in good accounting form
TBB Corp. has the following information regarding three of its assets: Estimated Book Value Cash Flows Fair Value Equipment $ 100,000 $ 106,000 $ 90,000 Building $ 200,000 $ 250,000 $ 195,000 Patent $ 50,000 $ 58,000 $ 36,000 What amount of loss should be recorded by TBB due to asset impairment?
Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce Corporation for $30,000,000 in cash. The book values and fair values of Iceberg's assets and liabilities were as follows: Current assets Property, plant, and equipment Other assets Current liabilities Long-term liabilities Required: 1. Calculate the amount paid for goodwill. 2. Determine the financial statement effects of the acquisition. Required 1 Required 2 Complete this question by entering your answers in the tabs below. Book Value $ 11,400,000 20,200,000 3,400,000 7,800,000 13,200,000 Assets Determine the financial statement effects of the acquisition. Note: Amounts to be deducted should be indicated with a minus sign. Enter your answer in millions rounded to 1 decimal place. (i.e. 5,500,000 should be entered as 5.5). Accounts Payable Accounts Receivable Accumulated Depreciation Advertising Expense Fair Value $ 14,400,000 26,200,000 4,400,000 7,800,000 12,200,000 Balance Sheet Liabilities…
Painted Desert has acquired several companies. Assume that Painted Desert purchased Oak Tree Unlimited for $14,000,000 cash. The book value of Oak Tree Unlimited's assets is $14,000,000 (fair value, $15,000,000), and it has liabilities of $13,000,000 (fair value, $13,000,000). Requirements 1. Compute the cost of goodwill purchased by Painted Desert. 2. Record the purchase of Oak Tree Unlimited by Painted Desert. Requirement 1. Compute the cost of goodwill purchased by Painted Desert. Purchase price to acquire Oak Tree Unlimited Fair value of Oak Tree Unlimited's assets Less: Fair value of Oak Tree Unlimited's liabilities Less: Fair value of Oak Tree Unlimited's net assets Goodwill Requirement 2. Record the purchase of Oak Tree Unlimited by Painted Desert. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit…
Carver Incorporated purchased a building and the land on which the building is situated for a total cost of $972,500 cash. The land was appraised at $257, 226 and the building at $861, 149. Required a. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. b. Would the company recognize a gain on the purchase? c. Record the purchase in a horizontal statements model. d. Record the purchase in general journal format.
305. Subject : - Accounting
auisitions Problem 23-5 (IAA) 1. Nutty Company made the following individual cash purchases: 000,000 taken. Land and building Machinery and office Delivery equipment 6,000,000 1,800,000 500,000 equipment the old lachine An appraisal disclosed the following fair value: 1,000,000 3,000,000 800,000 400,000 350,000 Land entity onthly chine Building Machinery Office equipment Delivery equipment 2. Nutty Company acquired the assets of another entity with the following fair value: sed a rest The 1,000,000 5,000,000 2,000,000 Land Building Machinery The entity issued 60,000 shares with P100 par value in exchange. The share had a quoted price of P150 on the date of purchase of the property. of ary 3. Received a parcel of land located in Davao City from a philanthropist as an inducement to locate a plant in the city. The land has a fair value of P1,500,000. is- 4. The entity paid cash for machinery, P900,000 subject to 2% cash discount, and freight on machinery, P35,000. 5. The entity acquired…
ACME Co. paid $110,000 for the net assets of Comb Corp. At the time of the acquisition the following information was available related to Comb's balance sheet: Book Value Fair Value Current Assets $50,000 $ 50,000 Building 80,000 100,000 Equipment 40,000 50,000 Liabilities 30,000 30,000 What is the amount recorded by ACME for the Building? a. $110,000 b. $20,000 c. $80,000 d. $100,000
Coronado Industries purchased the following assets and constructed a building as well. All this was done during the current year. Assets 1 and 2: These assets were purchased as a lump sum for $300,000 cash. The following information was gathered. Description Machinery Equipment Initial Cost on Seller's Books $300,000 180,000 Depreciation to Date on Seller's Books Cost of machinery traded Accumulated depreciation to date of sale Fair value of machinery traded Cash received Fair value of machinery acquired Date 2/1 6/1 9/1 11/1 $150,000 30,000 Asset 3: This machine was acquired by making a $30,000 down payment and issuing a $90,000, 2-year, zero-interest-bearing note. The note is to be paid off in two $45,000 installments made at the end of the first and second years. It was estimated that the asset could have been purchased outright for $107,700. Payment Book Value on Seller's Books Asset 4: This machinery was acquired by trading in used machinery. (The exchange lacks commercial…

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