5. Fortune paid $570,000 cash to acquire 100 percent of SordenCompany's net assets onJanuary 1, 2021. On that date, the following balance sheet data werereported by Sorden:HistoricalFairBalance Sheet ItemCostValueCash and Receivables$55,000 $50,000Inventory105,000190,000Land60,000100,000Plant & Equipment400,000320,000Less: Accumulated Depreciation(150,000)Goodwill10,000Total Assets480,000660,000Accounts PayableS50,000 $65,000Common Stock100,000Additional Pain-in-Capital60,000Retained Earnings270,000Total Liabilities & Equity480,000Required:Prepare the journal entry Fortune would record at the time of theexchange.

Net Assets of Fair Value = Total Asset - Total LiabilitiesNet Assets of Fair Value = $660,000 -…

Answered: 5. Fortune paid $570,000 cash to…

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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am.106.
On January 1, 2022, Kenya Company, an 80% owned subsidiary of Oliver, Inc., transferred equipment with a 10-year life (six of which remain with no salvage value) to Oliver in exchange for $78,000 cash. At the date of transfer, Kenya's records carried the equipment at a cost of $100,000 less accumulated depreciation of $40,000. Straight-line depreciation is used. Kenya reported net income of $48,000 for 2022. In preparing financial statements for 2022, how does this transfer affect the computation of consolidated net income?
Togo’s Sandwich Shop had the following long-term asset balances as of January 1, 2021: Cost Accumulated Depreciation Book ValueLand $ 85,000 – $ 85,000Building 560,000 $ (201,600) 358,400Equipment 145,000 (30,000) 115,000Patent 125,000 (50,000) 75,000Togo’s purchased all the assets at the beginning of 2019 (3 years ago). The building is depreciated over a 10-year service life using the double-declining-balance method and estimating no residual value. The equipment is depreciated over a nine-year useful life using the straight-line method with an estimated residual value of $10,000. The patent is estimated to have a five-year service life with no residual value and is amortized using the straight-line method. Depreciation and…
Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for $13,160,000 in cash. The book value of Smith's net assets (assets minus liabilities) was $9,600,000. The fair values of all of Smith's assets and liabilities were equal to their book values with the following exceptions: Receivables Property, plant, and equipment Intangible assets Required: Calculate the amount paid for goodwill. Goodwill Book Value $3,100,000 9,800,000 380,000 Fair Value $2,720,000 11,380,000 1,560,000
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On January 2, 2030, Esko Corp. acquired all the net assets of Tolits Inc. Esko Corp. paid P6,000,000 for the net assets of Tolits Inc. On this date, the following accounts of Tolits, Inc. are as follows: Cash – P150,000; Accounts Receivable – P1,600,000; Inventories – P600,000; Property, plant, and equipment – P2,600,000; Accounts Payable – P1,400,000. On the date of acquisition, it was determined that the fair values of inventories and property, plant, and equipment were P660,000 and P3,400,000, respectively. Esko Corp. has estimated a restructuring provision of P500,000 representing costs of exiting the activity of Tolits Inc., cost of terminating the employees of Tolits Inc. Compute the goodwill or gain from acquisition. * a. P 2,950,000 b. P 1,590,000 c. P 2,090,000 d. P 2,450,000 pls. answer it asap thank you:)
The T-accounts for Equipment and the related Accumulated Depreciation—Equipment for Luo Company at the end of 2020 are shown here. Equipment Beg. bal. 80,600 Disposals 23,800 Acquisitions 40,000 End. bal. 96,800 Accumulated Depreciation—Equipment Disposals 8,700 Beg. bal. 47,800 Depr. exp. 13,300 End. bal. 52,400 In addition, Luo’s income statement reported a loss on the disposal of plant assets of $6,100. What amount was reported on the statement of cash flows as “cash flow from sale of equipment”? (Show amount that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Cash flow from sale of equipment $
Assume a company’s beginning and ending balances in the Accumulated Depreciation account are $30,000 and $44,000, respectively. During the period the company sold one noncurrent asset that had an original cost of $8,000. The cash proceeds from the sale were $3,000 and the gain on the sale was $1,000. What is the amount of the depreciation charges that the company would include in the operating activities section of its statement of cash flows? Multiple Choice $18,000 $20,000 $24,000 $8,000
At December 31, 2022, Swifty Company reported the following as plant assets. Land $ 4,080,000 Buildings $28,360,000 Less: Accumulated depreciation—buildings 12,210,000 16,150,000 Equipment 48,670,000 Less: Accumulated depreciation—equipment 5,160,000 43,510,000 Total plant assets $63,740,000 During 2023, the following selected cash transactions occurred. April 1 Purchased land for $2,000,000. May 1 Sold equipment that cost $780,000 when purchased on January 1, 2019. The equipment was sold for $468,000. June 1 Sold land purchased on June 1, 2013 for $1,410,000. The land cost $392,000. July 1 Purchased equipment for $2,430,000. Dec. 31 Retired equipment that cost $502,000 when purchased on December 31, 2013. Journalize the above transactions. The company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year life and no salvage value. The equipment is…
Action, Inc. acquired the following assets and assumed the related liabilities of Slacker Corp. in a transaction completed on February 16, 2023: Accounts receivable, net Inventories Property, plant & equipment Non-amortizable intangible assets Carrying value for Slacker Current liabilities Noncurrent liabilities $ 11,000 $ 50,000 $ 100,000 $ 200,000 Fair Value $ 10,000 $ 50,000 $ 150,000 $ 225,000 $ (40,000) $(200,000) $ (40,000) $(200,000) Action paid $205,000 in cash for all of the above from Slacker. a) Determine if Action must record any goodwill. Show any calculations. b) Record the acquisition in Action's general journal on Feb. 16, 2023. Show: any calculations. c) Prepare any adjusting entry for amortization required as of the fiscal year end, December 31, 2023. If no amortization is required, explain why.
305. Subject : - Accounting
At December 31, 2017, Arnold Corporation reported the following plant assets. Land $3,000,000 14,575,000 Buildings Less: Accumulated depreciation-buildings Equipment Less: Accumulated depreciation equipment Total plant assets $26,500,000 11,925,000 June 1 July 1 Dec. 31 40,000,000 5,000,000 During 2018, the following selected cash transactions occurred. Apr. 1 Purchased land for $2,200,000. May 1 35,000,000 $52,575,000 Sold equipment that cost $600,000 when purchased on January 1, 2011. The equipment was sold for $170,000. Sold land for $1,600,000. The land cost $1,000,000. Purchased equipment for $1,100,000. Retired equipment that cost $700,000 when purchased on December 31, 2008. No salvage value was received. Instructions (a) Journalize the transactions. (Hint: You may wish to set up T-accounts, post beginning balances, and then post 2018 transactions.) Arnold uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 40-year useful life and…

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