2. Parent Company buys Sub Company. Sub Company has the following book and fairmarket values for their accounts as of the purchase.Balance Sheet of Sub CompanyBook Values Fair ValuesAssetsCurrent assets$150$150Property, plant, and equipment (net)Copyright (net)20030050600Sales contracts350Total Assets$400$1,400LiabilitiesAccounts payable$100$100Stockholders' EquityCommon stock-$5 par valueAdditional paid-in capitalRetained earningsTotal Liabilities and Stockholders' Equity5050200$400(1) Parent Company pays $400 cash and 50 shares of $10 par common stock, selling for$20 per share as of the business combination. Prepares a journal entry for thistakeover for Parent Company. Sub Company dissolves after this event.

Consolidation: It can be defined as the combination or merging of various small businesses into a…

Answered: 2. Parent Company buys Sub Company. Sub…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 17P

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2. Parent Company buys Sub Company. Sub Company has the following book market values for their accounts as of the purchase. Balance Sheet of Sub Company Book Values Fair Values Assets Current assets $150 $150 Property, plant, and equipment (net) Copyright (net) Sales contracts 200 300 50 600 350 Total Assets $400 $1,400 Liabilities Accounts payable $100 $100 Stockholders' Equity Common stock-$5 par value 50 Additional paid-in capital 50 Retained earnings 200 Total Liabilities and Stockholders' Equity $400 (1) Parent Company pays $400 cash and 50 shares of $10 par common stock $20 per share as of the business combination. Prepares a journal entry for takeover for Parent Company. Sub Company dissolves after this event. (5
Parent Company buys Sub Company. Sub Company has the following book and fair market values for their accounts as of the purchasc. Balance Sheet of Sub Company Book Values Falr Values Assets Current assets $150 $150 Property, plant, and equipment (net) Copyright (net) Sales contracts 200 300 50 600 350 Total Assets $400 $1,400 Liabilities Accounts payable $100 $100 Stockholders' Equity Common stock-$5 par value Additional paid-in capital 50 50 Retained earnings 200 Total Liabilities and Stockholders' Equity $400 (1) Parent Company pays $400 cash and 50 shares of S10 par common stock, selling for $20 per share as of the business combination. Prepares a journal entry for this takeover for Parent Company. Sub Company dissolves after this event.
Accounting for Asset and Stock Purchases Assume an investor purchases an investee's net assets with a cash payment of $800 and issuance to the investee's shareholders of 160 shares of $1 par value common stock with a current fair value of $19.00 per share. In addition, we assume the purchaser paid an additional $40 of transaction costs to a third party (e.g., appraiser or broker) and provided the seller with contingent consideration with a fair value of $160 at the date of acquisition. The investee has the following net assets at current appraised fair value and historical book value: Plant and equipment Land Patent Total Required Investee Fair Value Investee Book Value $320 $600 840 600 960 80 $2,400 $1,000 a. Provide the journal entry on the investor's books for the purchase of the individual net assets of the investee. Assume the acquired net assets do not qualify as a business. b. Provide the journal entry on the investor's books for the purchase of the individual net assets of the…
1. Assume the following data apply shortly after Python Co. acquires Snakes Co.: P Co. (000s) 450 S Co. (000s) Assets 200 Liabilities 250 125 CS 75 35 APIC/OCC 75 30 RE 50 10 P asset s have a fair value = 435k; S' identifiable assets have a P acquires 80% of S's outstanding voting S' assets include pre-acquisition fair value = 300k. stock for $160k cash. Goodwill of 20k, and P's assets (and S' liabilities) reflect a Loan P has made to S for 10k. The DOA consolidated Balance Sheet should show (hint:: your B/S should balance: a+b-c=d+e+f+g) : a, identifiable assets b. Goodwill (algebraic) liabilities C. d. Common Stock e. APIC/OCC f. RE g. Noncontrolling interest h. Differential
Linden Corporations is negotiating for the purchase of Hill Company. The following is an abbreviated balance sheet of Hill. Assets Cash Land Equipment, net Trademark Total assets Additional Information: Hill Company Balance Sheet As of December 31, 2025 $100,000 230,000 200,000 40,000 $570.000 Liabilities and Stockholders' Equity Accounts payable Notes payable (long-term) Common stock Retained earnings Total liabilities and stockholders' equity 1. Land is undervalued by $20,000. 2. Equipment is overvalued by $3,000. Hill agrees to sell the business to Linden for $370,000. $150,000 250,000 140,000 30,000 $570,000 Instructions Prepare the entry to record the purchase of Hill Company on Linden's books.
You're given the following details of an acquisition of Target Co. by Acquirer Ltd.. What is the transaction value for this acquisition of Target Co.? Acquisition of Target Co. by Acquirer Ltd. Target Share Price ($/sh.) $85.40 Acquisition Premium 15% Diluted Shares Outstanding (MM) 670 Target Total Debt Target Cash and Cash Equivalents % Debt Financing % Equity Financing Equity Financing Fees Debt Financing Fees Other Transaction Costs $3,562 $5,147 40% 60% 4.0% 1.5% $800
If CARDO Co purchases the net assets of SYANO Co by issuing 5,000 shares of their P20 par valueshares with a fair value of P40 per share, incurs a mortgage loan for P90,000, pays P150,000 cash andpaying direct, indirect and stock issue costs of P75,000, P50,000 and P40,000 respective. REQUIREMENTS:A. GoodwillB. Consolidated Total Assets at the date of acquisition
Question:The following is the extract from trial balance of G Limited, subsidiary of Y Limited for the year ended 31 December 2021. Dr CrInventory on hand: 31/12/2020 50 000 Sales 1025000Purchases 350 000 Depreciation 25 000 Rent income 40 000Dividend paid 11 000 Other expenses 300 000 Income tax expense 145 000 Additional information: 1. Y Limited acquired its interest in G limited on the 1 st May 2021. 2.The average monthly sales of G Limited accrued evenly throughout the year.…
Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $146,000. On that date, the fair value of the noncontrolling interest was $36,500, and Slice reported retained earnings of $44,000 and had $92,000 of common stock outstanding. Pizza has used the equity method in accounting for its investment in Slice. Trial balance data for the two companies on December 31, 20X5, are as follows: Pizza Slice Corporation Debit $ Products Company Debit $ 82,000 109,000 82,000 164,000 Item Credit Credit 88,000 277,000 82,000 507,000 176, 200 119,000 20,000 10,000 44,000 Cash & Receivables Inventory Land Buildings & Equipment Investment in Slice Products Company Cost of Goods Sold Depreciation Expense Inventory Losses Dividends Declared 44,000 10,000 6,000 22,000 $ 193,000 Accumulated Depreciation Accounts Payable Notes Payable Common Stock 40,000 266,920 285,000 299,000 207,000 32,280 $ 70,000 15,000 155,000 92,000 82,000 105,000 Retained Earnings Sales Income…
Armadillo Enterprises acquired the following equity investmentsat the beginning of year 1 as trading investments. Description Number of shares Market price per share Total price Finestra Company 15,000 x $25 $387,500 BVD Company 20,000 X$18 $360,000 Market values at theend of Years 1 &2 are presented below: Market/Fair Value End of year 1 End of year 2 Finestra Company $19 $23 BVD Company |$22 $28 REQUIREMENTS: Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises sells 15,000 shares of BVD Company for $16at the beginning of year 2. Prepare the journal entry to record thesale. Prepare the adjusting journal entry required at the end of year2. Assume that ArmadilloEnterprises now holds these investments asavailable-for-sale. Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises…
Company PriceBest established a wholly-owned Company Sugar on 1 January 2019. Sugar has a functional currency in USD but PriceBest requires Sugar to use SGD as its presentation currency. Company Sugar Statement of Financial Position As at 31 December 2019 USD Property 20,000 Cash 130,000 Inventory 200,000 Accounts receivable 100,000 450,000 Share capital 150,000 Retained earnings 270,000 Accounts payable 30,000 450,000 USD/SGD spot rates 1 January 2019 1.24 31 December 2019 1.36 Average for the year of 2019 1.30 Required: Translate Sugar’s statement of financial position as at 31 December 2019 from USD to SGD using the closing rate method.
At the time of acquisition X & Y Co., stock issue expected cost expenses OMR 48,000. Finally, acquisition cost was OMR 64,000. How much will record in the income statement. Select one: a. OMR 48,000 b. OMR 64,000 c. OMR 16,000 d. OMR 112,000

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