2. M acquires H Company on 01/01/15. To obtain the net assets, M pays $200.000 in cashand issues 10.000 shares of its own $10 par value common stock. On this date, M's stockhas a fair market value of $18 per share. The book values for both M and H as of31/12/14, follow. The fair market value of each of H's accounts is also included. Inaddition H holds fully amortized patent that still retains a $30.000 value.H CompanyM IncFair MarketBook ValueBook ValueValueCash$ 300.000$ 40.000$ 40.000Receivables160.000220.000100.00090.00080.000Inventory130.000130.000Land60.00060.000Buildings (net)Equipment (net)Accounts PayableLong-Term Liabilities400.000110.000140.000120.00050.00050.000160.00030.00030.000380.000170.000150.000Common Stock400.00040.000Retained Earnings360.000240.000Required:Assume that this combination is a statutory merger so that H's accountstransferred to the records of M with H subsequently being dissolvedcorporation. Prepare the journal entries for M that are required to record this merger.aretobeasalegal

What is meant by a Merger? When two or more companies unite to expand their business together as one…

2. M acquires H Company on 01/01/15. To obtain the net assets, M pays $200.000 in cash and issues 10.000 shares of its own $10 par value common stock. On this date, M's stock has a fair market value of $18 per share. The book values for both M and H as 31/12/14, follow. The fair market value of each of H's accounts is also included. In addition H holds fully amortized patent that still retains a $30.000 value. of H Company M Inc Fair Market Book Value $ 300.000 Book Value Value Cash $ 40.000 $ 40.000 Receivables 160.000 220.000 90.000 130.000 80.000 130.000 Inventory Land 100.000 400.000 60.000 60.000 Buildings (net) Equipment (net) Accounts Payable Long-Term Liabilities Common Stock 110.000 140.000 120.000 50.000 50.000 160.000 30.000 30.000 380.000 170.000 150.000 400.000 40.000 Retained Earnings 360.000 240.000

2. M acquires H Company on 01/01/15. To obtain the net assets, M pays $200.000 in cash and issues 10.000 shares of its own $10 par value common stock. On this date, M's stock has a fair market value of $18 per share. The book values for both M and H as 31/12/14, follow. The fair market value of each of H's accounts is also included. In addition H holds fully amortized patent that still retains a $30.000 value. of H Company M Inc Fair Market Book Value $ 300.000 Book Value Value Cash $ 40.000 $ 40.000 Receivables 160.000 220.000 90.000 130.000 80.000 130.000 Inventory Land 100.000 400.000 60.000 60.000 Buildings (net) Equipment (net) Accounts Payable Long-Term Liabilities Common Stock 110.000 140.000 120.000 50.000 50.000 160.000 30.000 30.000 380.000 170.000 150.000 400.000 40.000 Retained Earnings 360.000 240.000

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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D1. Account
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AA, a domestic corporation, invested Pl.000.000 in 10,000 common shares of stock of BB, another domestic corporation. The investment represents 20% of the outstanding shares of BB. During the year, BB declared property dividends of 20,000 common shares of investment in common stock of CC Corporation. The par value of CC's share is P10 per share. At time of declaration, the fair market value of the share was P15 per share but when AA received the property dividend, the fair market value was P16. How much is the taxable dividend income of AA?
On January 1 Criquet Co. acquired an interest in the Tamlee Co. for $500,000. At December 31, Tamlee Co. declared and paid a cash dividend of $50,000 and reported a net income of $160,000. REQUIRED: Prepare the journal entries for the Criquet Co. under each of the independent circumstances: 1. Criquet Co. acquires a 10% interest in the Tamlee Co. 2. Criquet Co. acquires a 25% interest in the Tamlee Co.
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Novak Limited owns a 26% interest in the shares of Marigold Corporation. During the year, Marigold pays $10600 in dividends to Novak and reports $104000 net income. Novak's investment in Marigold will increase Novak's net income by $10600. $27040. $2756. $29796. Please give correct option or incorrect all sub part
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Oriole Inc. owns shares of Waterway Corporation stock. At December 31, 2025, the securities were carried in Oriole's accounting records at their cost of $997,000, which equals their fair value. On September 21, 2026, when the fair value of the securities was $1,401,000, Oriole declared a property dividend whereby the Waterway securities are to be distributed on October 23, 2026, to stockholders of record on October 8, 2026. Prepare all journal entries necessary on those three dates. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record entries in the order displayed in the problem statement.) Date Account Titles and Explanation Sep. 21 Sep. 21 (To record gain or loss) Oct. 8 (To record property dividend) Oct. 23 Debit Credit
Allen transfers marketable securities with an adjusted basis of $120,000, fair market value of $300,000, for 85% of the stock of Heron Corporation. In addition, he receives cash of $40,000. Allen recognizes a capital gain of $40,000 on the transfer. True O False