2. Apple Company purchases 80 percent of Mango. At the date of acquisition, Mango has revenue of P250,000 and expenses of P170,000. What amount of pre-acquisition earnings will be created on the consolidated income statement at the acquisition date?
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- Question: ClipRite sold ProForm inventory costing $72,000 during the last six months of 2020 for $120,000. At year-end, 30 percent remained ClipRite sold ProForm inventory costing $200,000 during 2021. At yearend, 1 percent is left. What are the consolidated balances? Proform acquired 70 percent of ClipRite on June 30, 2020, for $910,00 in cash. Based on ClipRites acquistion-date fair value, an unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $10,000 per year. No goodwill was recognized in the acuisition. The noncontrolling interest fair value was assessed at $390,000 at the acquisition date. The 2021 financial statements are as follows: Proform ClipRite Sales -800,000 -600,000 Costs of goods sold 535,000 400,000 Operating expenses 100,000 100,000 Dividend Income -35,000 Net Income -200,000 -100,000 Retained earning, 1/1/21 -1,300,000 -850,000 Net Income -200,000 -100,000 Dividend declared 100,000…On January 1, 2021, P Corporation purchases from an unrelated person all the outstanding stock of S Corporation for $90,000. S's balance sheet on the purchase date is as follows: Basis Fair Market Value Assets Cash $ 5,000 $ 5,000 Accounts Receivable 20,000 20,000 Inventory (LIFO) 20,000 40,000 Equipment (accumulated depreciation of $10,000) 30,000 45,000 Total Assets $75,000 $110,000 Liabilities Accounts payable $20,000 $ 20,000 Equity 55,000 90,000 Total liabilities and equity $75,000 $110,000 P properly elects § 338. S's tax rate is 21 percent. a. What is the aggregate basis of S's assets after this transaction? b. What is the basis for each individual asset?The following are several figures reported for Poyer and Sutter as of December 31, 2024: Sutter $ 250,000 700,000 Items Inventory Sales Investment income Cost of goods sold Operating expenses Poyer $ 450,000 900,000 450,000 205,000 350,000 275,000 Poyer acquired 90 percent of Sutter in January 2023. In allocating the newly acquired subsidiary's fair value at the acquisition date, Poyer noted that Sutter had developed a unpatented technology worth $68,000 that was unrecorded on its accounting records and had a five-year remaining life. Any remaining excess fair value over Sutter's book value was attributed to an indefinite-lived trademark. During 2024, Sutter sells inventory costing $125,000 to Poyer for $170,000. Of this amount, 15 percent remains unsold in Poyer's warehouse at year-end. Required: Determine balances for the following items that would appear on Poyer's consolidated financial statements for 2024: Note: Input all amounts as positive values. a. Inventory b. Sales c. Cost…
- Following are several figures reported for Allister and Barone as of December 31, 2021: Allister Barone Inventory $ 500,000 $300,000 Sales 1,000,000 800,000 Investment income not given Cost of goods sold 500,000 400,000 Operating expenses 230,000 300,000 Allister acquired 90 percent of Barone in January 2020. In allocating the newly acquired subsidiary’s fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $78,000 that was unrecorded on its accounting records and had a 4-year remaining life. Any remaining excess fair value over Barone’s book value was attributed to goodwill. During 2021, Barone sells inventory costing $130,000 to Allister for $180,000. Of this amount, 10 percent remains unsold in Allister’s warehouse at year-end. Required: Determine balances for the following items that would appear on Allister’s consolidated financial statements for 2021: Inventory Sales…The following are several figures reported for Allister and Barone as of December 31, 2021: Inventory Sales Investment income Cost of goods sold Operating expenses Allister Barone $ 530,000 $ 330,000 860,000 1,060,000 not given 530,000 245,000 430,000 315,000 Allister acquired 90 percent of Barone in January 2020. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $62,000 that was unrecorded on its accounting records and had a four-year remaining life. Any remaining excess fair value over Barone's book value was attributed to goodwill. During 2021, Barone sells inventory costing $133,000 to Allister for $186,000. Of this amount, 10 percent remains unsold in Allister's warehouse at year-end. Determine balances for the following items that would appear on Allister's consolidated financial statements for 2021:The following are several figures reported for Allister and Barone as of December 31, 2021: Allister Inventory Sales Investment income Cost of goods sold Operating expenses $ 620,000 $ Barone 420,000 1,240,000 1,040,000 not given 620,000 290,000 520,000 360,000 Allister acquired 90 percent of Barone in January 2020. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $80,000 that was unrecorded on its accounting records and had a four-year remaining life. Any remaining excess fair value over Barone's book value was attributed to goodwill. During 2021, Barone sells inventory costing $142,000 to Allister for $204,000. Of this amount, 10 percent remains unsold in Allister's warehouse at year- end. Determine balances for the following items that would appear on Allister's consolidated financial statements for 2021: Inventory Sales Cost of goods sold Operating expenses Net income attributable to…
- Anderson Company, a 90% owned subsidiary of Philbin Corporation, transfers inventory to Philbin at a 25% gross profit rate. The following data are available pertaining specifically to Philbin's intra-entity purchases from Anderson. Anderson was acquired on january 1, 2020. 2020 2021 2022 Purchases by Philbin Ending inventory on Philbin's books 1,200 4,000 $ ৪,000 5 12,000 $15.000 3,000 Assume the equity method is used. The following data are available pertaining to Anderson's income and dividends. 2020 2021 2022 $ 70,000 $ 85,000 $ 94,000 Dividends paid by Anderson 10,000 10,000 15,000 Anderson's net income Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers, compute the net income attributable to the noncontrolling interest of Anderson for 2022. O $9,400. $9,375. $9,425. $8,485. $9,325.McCoy has the following account balances as of December 31, 2020 before an acquisition transaction takes place. Inventory $125,000 Land 450,000 Buildings (net) 575,000 Common stock ($10 par) 600,000 Additional paid-in capital 300,000 Retained earnings 250,000 The fair value of McCoy’s Land and Buildings are $650,000 and $600,000, respectively. On December 31, 2020, Ferguson Company issues 30,000 shares of its $10 par value ($30 fair value) common stock in exchange for all of the shares of McCoy’s common stock. Ferguson paid $12,000 for costs to issue the new shares of stock. Before the acquisition, Ferguson has $800,000 in its common stock account and $350,000 in its additional paid-in capital account. What will the consolidated common stock account be as a result of this acquisition?On March 31, 2018, Elf Hotels purchased Reindeers and Riders Company for $6,000,000. Reindeers reported the following balance sheet on the date of the acquisition:
- P Co acquired an 80% interest in S Co on 1/1/2023 when the book values of S assets and liabilities were equal to their fair values. The cost of the 80% interest was equal to 80% of the book value of S net assets. During 2023,P sold merchandise that cost $86,000 to S for $70,000. On 31/12/2014, three-fourths of the merchandise acquired from P remained in S inventory. Separate incomes (investment income not included) of the two companies are as follows: P S Sales Revenue 160,000 Cost of Goods Sold 90,000 Operating Expenses 21,000 Select one: O Separate incomes 49,000 What is P income from S for 2023? a. $29,600 b. $39,200 180,000 c. $49,000 d. $ 51,200 120,000 17,000 43,000Calendar Company purchases 80 percent of Daily Planner. At the date of acquisition, Daily Planner has revenue of P250,000 and expenses of P170,000. What amount of pre-acquisition earnings will be created on the consolidated income statement at the acquisition date?Pizza Factory Company owns 100% controlling interest in its long held subsidiary; The Sugar Company and they use the Equity Method. Pizza Factor sells inventory to Sugar Company for a 25% Gross Profit. During 2019 and 2020, intercompany sales amounted to: Intercompany Sales: 2019 840,000 2020 930,000 At the end of 2019, Sugar Company had one-fifth of the goods purchased that year from Pizza Factory in its ending inventory. At the end of 2020, Sugar Company's 2020 ending inventory contained one-fourth of that year’s purchases from Pizza Factory. There were no intercompany sales prior to 2019. Prepare in general journal form all entries necessary on the consolidated statements…