AB Inc. acquired 100% of the voting common stock of CD Inc. on January 1, 2013. On that date, AB had total liabilities with a book value $650,000 and a fair value of $680,000. CD had total liabilities with a book value of $430,000 and a fair value of $420,000. Assuming both companies continue to operate separately, how much total liabilities that would appear on the consolidated Balance Sheet at January 1, 2013? Select one: O a. $1,070,000 O b. $1,100,000 O c. $1,110,000 O d. $1,080,000

AB Inc. acquired 100% of the voting common stock of CD Inc. on January 1, 2013. On that date, AB had total liabilities with a book value $650,000 and a fair value of $680,000. CD had total liabilities with a book value of $430,000 and a fair value of $420,000. Assuming both companies continue to operate separately, how much total liabilities that would appear on the consolidated Balance Sheet at January 1, 2013? Select one: O a. $1,070,000 O b. $1,100,000 O c. $1,110,000 O d. $1,080,000

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter8: Consolidated Tax Returns

Section: Chapter Questions

Problem 36P

See similar textbooks

Similar questions

Company S is a 100%-owned subsidiary of Company P. On January 1, 2016, Company S had $100,000 of 8% rate bonds outstanding. The bonds had 5 years to maturity on January 1, 2016, and had an unamortized discount of $5,000. On that date, Company P purchased the bonds for $99,000. The net adjustment needed to consolidated retained earnings of the two companies in the consolidation process for 2016 is: a. 800 decrease b. 0 c. 3,200 decrease d. 4,000 decrease
Arther Corporation acquired all of the outstanding $10 par voting common stock of Trent Inc., on January 1, 2016, in exchange for 50,000 shares of its $10 par voting common stock. On December 31, 2015, the common stock of Arther had a closing market price of $15 per share on a national stock exchange. The retained earnings balance of Trent Inc., was $156,000 on the date of the acquisition. Both companies continued to operate as separate business entities maintaining separate accounting records with years ending December 31.On December 31, 2018, after year-end adjustments but before the nominal accounts were closed, the companies had the following condensed statements: (see attachment)Additional information is as follows: a. There have been no changes in the common stock and additional paid-in capital in excess of par accounts since the one necessitated in 2016 by Arther’s acquisition of Trent, Inc. b. At the acquisition date, the market value of Trent’s machinery exceeded book value by…
On July 1, 2022, when Christ Company's total stockholders' equity was $360,000, Dina Corporation purchased 14,000 shares of Christ's common stock at $30 per share. Christ had 20,000 shares of common stock outstanding both before and after the purchase by Dina, and the book value of Christ's net assets on July 1, 2022 was equal to the fair value. On a consolidated balance sheet prepared at July 1, 2022, goodwill would be:- A) $360,000 B) $420,000 C)$240,000 D) $600,000
Liala Ltd acquired all the issued shares of Jordan Ltd on 1 January 2015. The following transactionsoccurred between the two entities: On 1 June 2016, Liala Ltd sold inventory to Jordan Ltd for $12,000, this inventory previouslycosted Liala Ltd $10,000. By 30 June 2016, Jordan Ltd had sold 20% of this inventory to otherentities for $3,000. The other 80% was all sold to external entities by 30 June 2017 for $13,000. During the 2016–17 period, Jordan Ltd sold inventory to Liala Ltd for $6,000, this being at costplus 20% mark-up. Of this inventory, 20 % remained on hand in Liala Ltd at 30 June 2017. Thetax rate is 30%.Required:(i) Prepare the consolidation worksheet entries for Liala Ltd at 30 June 2017 in relation to the intragroup transfers of inventory. (ii) Compute the amount of cost of goods sold to be reported in the consolidated incomestatement for 2017 relating to the relevant intra-group sales. b) On 1 July 2016, Liala ltd sold an item of plant to Jordan Ltd Ltd for $150,000…
Liala Ltd acquired all the issued shares of Jordan Ltd on 1 January 2015. The following transactionsoccurred between the two entities: On 1 June 2016, Liala Ltd sold inventory to Jordan Ltd for $12,000, this inventory previouslycosted Liala Ltd $10,000. By 30 June 2016, Jordan Ltd had sold 20% of this inventory to otherentities for $3,000. The other 80% was all sold to external entities by 30 June 2017 for $13,000. During the 2016–17 period, Jordan Ltd sold inventory to Liala Ltd for $6,000, this being at costplus 20% mark-up. Of this inventory, 20 % remained on hand in Liala Ltd on 30 June 2017. Thetax rate is 30%.Required:(i) Prepare the consolidation worksheet entries for Liala Ltd on 30 June 2017 in relation to the intragroup transfers of inventory. (ii) Compute the amount of cost of goods sold to be reported in the consolidated income statement for 2017 relating to the relevant intra-group sales. b) On 1 July 2016, Liala Ltd sold an item of plant to Jordan Ltd Ltd for $150,000…
LGM Motors acquired 80% of NS Service Center outstanding shares on January 1, 2022 by payingcash. The consolidated statement of financial position showed the following balances at thedate of acquisition.Consolidated Balances AmountTotal Assets 15,670,000Total Liabilities 4,575,000Total Shareholder’s Equity ?The book value of the net assets of NS Services Center is P4,500,000. The assets of NS ServiceCenter are fairly valued except for the following:• Patent on the product that is deemed worthless, P50,000.• Goodwill of P150,000.• Unrecognized identifiable R&D of P75,000.The fair value of the non-controlling interest is 705,000 and the book value of LGM’s equitybalance is P9,500,000.On December 31, 2022 the following information were provided by NS Services Center:• Net income of 400,000 was recognized.• Patents remaining useful life is 4 years.• Pre-existing goodwill presented above was impaired with a current value of 120,000.• Dividends were declared amounting to P100,000.LGM…
) Liala Ltd acquired all the issued shares of Jordan Ltd on 1 January 2015. The following transactions occurred between the two entities: 1. On 1 June 2016, Liala Ltd sold inventory to Jordan Ltd for $12000, this inventory previously costed Liala Ltd $10000. By 30 June 2016, Jordan Ltd had sold 20% of this inventory to other entities for $3000. The other 80% was all sold to external entities by 30 June 2017 for $13000. 2. During the 2016–17 period, Jordan Ltd sold inventory to Liala Ltd for $6000, this being at cost plus 20% mark-up. Of this inventory, 20 % remained on hand in Liala Ltd at 30 June 2017. The tax rate is 30% Required:(i) Prepare the consolidation worksheet entries for Liala Ltd at 30 June 2017 in relation to the intragroup transfers of inventory. (ii) Compute the amount of cost of goods sold to be reported in the consolidated income statement for 2017 relating to the relevant intra-group sales. (b) On 1 July 2016 Liala ltd sold an item of plant to Jordan Ltd for $150000…
On January 1, 2017, Greenly Corporation acquired all of Lindy Company's common stock for $935,000. At the date of combination, Lindy had common stock outstanding with a par value of $100,000, additional paid- in capital of $400,000, and retained earnings of $175,000. The fair values and book values of all Lindy's assets and liabilities were equal at the date of combination, except for the following: Book Value Fair Value Land Buildings Equipment 75,000 400,000 500,000 160,000 500,000 570,000 The buildings had a remaining life of 20 years, and the equipment was expected to last another 10 years. In accounting for the business combination, Greenly decided to use push-down accounting on Lindy's books. During 2017, Lindy earned net income of $88,000 and paid a dividend of $50,000. Required: REOR 1. Record the acquisition of Lindy's stock on Greenly's books on December 31, 20X6. 2. Record any entries that would be made during 2017, on Lindy's books related to the business combination if…
Nascent, Inc., acquires 60 percent of Sea-Breeze Corporation for $414,000 cash on January 1, 2015. The remaining 40 percent of the Sea-Breeze shares traded near a total value of $276,000 both before and after the acquisition date. On January 1, 2015, Sea-Breeze had the following assets and liabilities:The companies’ financial statements for the year ending December 31, 2018, follow:Answer the following questions:a. How can the accountant determine that the parent has applied the initial value method?b. What is the annual excess amortization initially recognized in connection with this acquisition?c. If the parent had applied the equity method, what investment income would the parent have recorded in 2018?d. What amount should the parent report as retained earnings in its January 1, 2018, consolidated balance sheet?e. What is consolidated net income for 2018 and what amounts are attributable to the controlling and noncontrolling interests?f. Within consolidated statements at January 1,…
LGM Motors acquired 80% of NS Service Center outstanding shares on January 1, 2022 by paying cash. The consolidated statement of financial position showed the following balances at the date of acquisition. Consolidated Balances Amount Total Assets 15,670,000 Total Liabilities 4,575,000 Total Shareholder’s Equity ? The book value of the net assets of NS Services Center is P4,500,000. The assets of NS Service Center are fairly valued except for the following: Patent on the product that is deemed worthless, P50,000. Goodwill of P150,000. Unrecognized identifiable R&D of P75,000. The fair value of the non-controlling interest is 705,000 and the book value of LGM’s equity balance is P9,500,000. On December 31, 2022 the following information were provided by NS Services Center: Net income of 400,000 was Patents remaining useful life is 4 Pre-existing goodwill presented above was impaired with a current value of 120,000. Dividends were declared…
On January 1, 2020, Pail Corporation acquired 75 percent of Sand Company's common stock for $525,000 cash. The fair value of the noncontrolling interest at that date was determined to be $175,000. At December 31, 2020, Pail reported on its general ledger Investment in Sand at $616000. What amount of Investment in Sand would be reported on the 12/31/20 consolidated Balance Sheet? BE SURE TO TYPE A SIMPLE NUMBER WITH NO COMMAS OR DOLLAR SIGNS. FOR EXAMPLE, TYPE 1000 INSTEAD OF $1,000.
a) Liala Ltd acquired all the issued shares of Jordan Ltd on 1 January 2015. The following transactions occurred between the two entities: On 1 June 2016, Liala Ltd sold inventory to Jordan Ltd for $12,000, this inventory previously costed Liala Ltd $10,000. By 30 June 2016, Jordan Ltd had sold 20% of this inventory to other entities for $3,000. The other 80% was all sold to external entities by 30 June 2017 for $13,000. During the 2016–17 period, Jordan Ltd sold inventory to Liala Ltd for $6,000, this being at cost plus 20% mark-up. Of this inventory, 20 % remained on hand in Liala Ltd at 30 June 2017. The tax rate is 30%. Required:(i) Prepare the consolidation worksheet entries for Liala Ltd at 30 June 2017 in relation to the intragroup transfers of inventory.(ii) Compute the amount of cost of goods sold to be reported in the consolidated income statement for 2017 relating to the relevant intra-group sales. b) On 1 July 2016, Liala ltd sold an item of plant to Jordan Ltd Ltd for…