Akron, Incorporated, owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patentedtechnology resulted from the original acquisition. For 2024, the companies had the following account balances:ItemsSalesCost of goods soldOperating expensesInvestment incomeDividends declaredAkron$ 1,100,000500,000400,000Not given80,000Toledo$ 600,000400,000220,000030,000Intra-entity sales of $320,000 occurred during 2023 and again in 2024. This merchandise cost $240,000 each year. Of the totaltransfers, $70,000 was still held on December 31, 2023, with $50,000 unsold on December 31, 2024.Required:b. Prepare a consolidated income statement for the year ending December 31, 2024.a. For consolidation purposes, does the direction of the transfers (upstream or downstream) affect the balances to be reported herComplete this question by entering your answers in the tabs below.Required ARequired BPrepare a consolidated income statement for the year ending December 31, 2024.AKRON, INCORPORATED AND CONSOLIDATED SUBSIDIARYIncothe StatementYear Ending December 31, 2024

For the consolidation of Akron, Incorporated, and Toledo Corporation for the year ending December…

Answered: Akron, Incorporated, owns all…

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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On January 1, 200X, Cale Corp. paid $1,020,000 to acquire Kaltop Co. Kaltop maintained separate incorporation. Cale used the equity method to account for the investment. The following information is available: Fair Value Current assets Land Building (20 year life) Equipment (10 year life) Current liabilities Long term liabilities Book Value $120,000 $72.000 $240.000 $540,000 $24,000 $120.000 $228.000 $384.000 $216,000 $120,000 $192.000 $268.000 $516.000 $24.000 $120,000 Common stock Paid in capital Retained earnings Kaltop earned net income for 200X of $126,000 and paid dividends of $48,000 during the year. 2 The 200X total amortization of allocations (this is the additional expense caused by the increases/decreases in market value) is calculated to be
The DeBlois Family Co. acquired 40% of Orange Beach Co. with a $500,000 payment on January 1, 2023. The equivalent net book value (40% share) of Orange Beach on the date of acquisition was $425,000. $50,000 of the excess payment was attributable to equipment with a 10-year remaining life. The remainder of the excess payment was not attributable to any identifiable item. Orange Beach Co. Reported net income of $40,000 in 2023. No dividends were paid out. On January 1, 2024, DeBlois Family Co. Acquired an additional 50% ownership share in Orange Beach Co. With a cash payment of $700,000. The fair value of the noncontrolling interest was determined to be $140,000 on the date of acquisition. The total fair value of Orange Beach's identifiable assets and liabilities on January 1, 2024, was $1,000,000. The trading value of stock shares remained the same as acquisition date prices for several months after January 1, 2024. What amount should be reported as consolidated goodwill on January 1,…
Adams, Incorporated, acquires Clay Corporation on January 1, 2023, in exchange for $550,400 cash. Immediately after the acquisition, the two companies have the following account balances. Clay’s equipment (with a five-year remaining life) is actually worth $537,600. Credit balances are indicated by parentheses. Items Adams Clay Current assets $ 480,000 $ 236,000 Investment in Clay 550,400 0 Equipment 713,600 462,000 Liabilities (261,000) (232,000) Common stock (350,000) (150,000) Retained earnings, 1/1/23 (1,133,000) (316,000) In 2023, Clay earns a net income of $50,400 and declares and pays a $5,000 cash dividend. In 2023, Adams reports net income from its own operations (exclusive of any income from Clay) of $201,000 and declares no dividends. At the end of 2024, selected account balances for the two companies are as follows: Items Adams Clay Revenues $ (508,000) $ (360,000) Expenses 368,300 270,000 Investment income Not given 0 Retained earnings,…
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.
A-5
On 1 July 2019, Besar Ltd acquired all of the shares (cum div.) of Kecil Ltd. The statement of financial position provided by the two companies at 1 July 2019 is as follows: Besar Ltd Kecil Ltd Shares in Kecil Ltd 367,000 - Plant 230,000 320,000 Accumulated depreciation (120,000) (40,000) Land - 12,000 Goodwill 10,200 2,000 Inventory 30,000 51,000 Receivables 40,000 42,000 557,200 387,000 Share capital 280,000 200,000 General reserve 44,000 33,000 Retained earnings 131,200 134,000 Liabilities 102,000 20,000 557,200 387,000 At the date of the business combination, all the identifiable assets and liabilities of Kecil Ltd had carrying amounts equal to their fair values except for: Fair value Plant $300,000 Inventory 31,000 Receivables 43,000 The plant had a further useful life of 5 years. It…
On May 1, Burns Corporation acquired 100 percent of the outstanding ownership shares of Quigley Corporation in exchange for $728,000 cash. At the acquisition date, Quigley's book and fair values were as follows: Cash Receivables Inventory Land Building and equipment (net) Patented technology Total assets Accounts payable Long-term liabilities Common stock ($5 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders equity Total assets Assets Book Value $ 112,000 $ 218,000 232,000 $ 177,000 323,000 0 $1,062,000 $ 162,500 $ 638,000 210,000 90,000 (38,500) $1,062,000 Burns directs Quigley to seek additional financing for expansion through a new long-term debt issue. Consequently, Quigley will issue a set of financial statements separate from that of its new parent to support its request for debt and accompanying regulatory filings. Quigley elects to apply pushdown accounting in order to show recent fair valuations for its assets. Prepare a separate…
SFFN Corp. purchased the entire business of AZC, Inc. including all its assets and liabilities for $1,800,000. Below is information related to the two companies: SFFN AZC Fair value of assets $ 3,050,000 $ 1,600,000 Fair value of liabilities 2,575,000 800,000 Reported assets 2,800,000 1,400,000 Reported liabilities 2,500,000 750,000 Net Income for the year 460,000 250,000 How much goodwill will SFFN recognize as a result of its acquisition of AZC? Select one: a. $-0- b. $1,225,000 c. $1,150,000 d. $200,000 e. $1,000,000
Write the complete solutions legibly.
How much is the consolidated profit? On January 2, 2021, ABC Co. acquired 60% interest in DDD Corp. for P360,000. Information on DDD Corp's financial position on acquisition date follows: > The identifiable assets and liabilities approximated their fair values except for inventories with carrying amount of P144,000 and fair value of P96,000 and building with carrying value amount of P240,000 and fair value of P250,000. The building has a remaining useful life of 8 years. > DDD Corp's retained earnings was P48,000 > Non-controlling interest is measured at a fair value of P240,000 A summary of the individual financial information of the entities on December 31, 2021 is shown below: DDD Corp. 550,000 АВС Со. Total Assets 1,550,000 Total Liabilities 132,000 34,000 Share Capital Retained Earnings 300,000 1,200,000 118,000 316,000 Sales Cost of Sales 350,000 700,000 80,000 200,000 Other Operating expenses 200,000 400,000
Huey Company acquires 100% of the stock of Solar Corporation on January 1, 2019, for $2,400,000 cash. As of that date Solar had the following account balances: Book Value Fair value Cash $630,000 $630,000 Accounts receivable 775,000 775,000 Inventory 350,000 400,000 Building-net (10 year life) 1,000,000 900,000 Equipment-net (5 year life) 300,000 400,000 Land 600,000 900,000 Accounts Payable 125,000 125,000 Bonds Payable (Face amount $1,000,000, due 12/31/2023) 2,000,000 2,050,000 Common stock 500,000 Additional paid-in capital 250,000 Retained earnings 780,000 In 2019 and 2020, Solar had net income of $250,000 and $240,000, respectively. In addition, Solar paid dividends of $16,000 in both years. Inventory is assumed to be sold in 2019. Assume straight line amortization/ depreciation for assets and bonds payable. What amount of Solar's Bonds Payable would appear on the consolidated balance sheet at December 31, 2019? Select one: A. $2,050,000 B.$2,040,000 C. $2,000,000 D. $2,010,000

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