please Provide correct answer general accounting question Alpha Corporation acquired all of Beta Company's stock on January 1, 2022, for$3,200,000, which was $980,000 in excess of book value. At that time, Beta'sinventory (FIFO) was undervalued by $180,000 and its equipment (8-year life) wasundervalued by $400,000. The remaining excess of cost over book value is attributedto an unrecorded patent being amortized over 16 years. Beta depreciates equipmentand amortizes intangibles using the straight-line method. During the next two years,Beta reported a total net income of $560,000 and paid out 40% in dividends.Alpha carries its investment in Beta using the complete equity method. Beta'sinventory increased each year since it was acquired by Alpha, and Beta's reportednet income for 2023 was $240,000.Compute Alpha's 2023 equity in the net income of Beta.

Step 1: Define Equity MethodThe Equity Method is an accounting approach where a parent company…

Answered: Alpha Corporation acquired all of Beta…

Principles of Accounting Volume 1

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Chapter11: Long-term Assets

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Problem 11PB: On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received...

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At the beginning of 2016, Metatec Inc. acquired Ellison Technology Corporation for $600 million. In addition tocash, receivables, and inventory, the following assets and their fair values were also acquired:Plant and equipment (depreciable assets) $150 millionPatent 40 millionGoodwill 100 millionThe plant and equipment are depreciated over a 10-year useful life on a straight-line basis. There is no estimated residual value. The patent is estimated to have a 5-year useful life, no residual value, and is amortizedusing the straight-line method.At the end of 2018, a change in business climate indicated to management that the assets of Ellison might beimpaired. The following amounts have been determined:Plant and equipment:Undiscounted sum of future cash flows $ 80 millionFair value 60 millionPatent:Undiscounted sum of future cash flows $ 20 millionFair value 13 millionGoodwill:Fair value of Ellison Technology Corporation $450 millionFair value of Ellison’s net assets (excluding goodwill)…
On January 1, 2023, Bertrand Incorporated paid $70,800 for a 40% interest in Chestnut Corporation's common stock. This investee had assets with a book value of $235,000 and liabilities of $95000. A patent held by Chestnut having a book value of $8900 was actually worth $25,400. This patent had a six year remaining life. Any further excess cost associated with this acquisition was attributed to an indefinite-lived asset. During 2023, Chestnut earned income of $45,700 and declared and paid dividends of $20,000. During 2024, the fair value of Bertrand's investment in Chestnut had risen from $84,080 to $88,960. Assuming Bertrand uses the quity method, what balnace should appear in the investment in Chestnut account as of December 31, 2024? Assuming Bertrand uses fair-value accounting, what income from the investment in Chestnut should be reported for 2024?
On July 15, 2024, Cottonwood Industries sold a patent and equipment to Roquemore Corporation for $810,000 and $355,000, respectively. On the date of the sale, the book value of the patent was $150,000, and the book value of the equipment was $436,000 (cost of $616,000 less accumulated depreciation of $180,000). Prepare the journal entries to record the sales of the patent and equipment. ote: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
On January 1, 2022, Matsui Co. purchased 42% of the outstanding voting common stock of Yankee, Inc. for $300,500. The book value of the acquired shares was $275,500. The excess of cost over book value is attributable to an intangible asset on Yankee's books that was undervalued and had a remaining useful life of five years. For the year ended December 31, 2022, Yankee reported net income of $125,750 and paid cash dividends of $25,700. What is the carrying value of Matsui's investment in Yankee at December 31, 2022? Multiple Choice $342,521. $337,521. $289,706. $300,500.
On July 15, 2024, Cottonwood Industries sold a patent and equipment to Roquemore Corporation for $770,000 and $335,000, respectively. On the date of the sale, the book value of the patent was $130,000, and the book value of the equipment was $412,000 (cost of $572,000 less accumulated depreciation of $160,000). Prepare the journal entries to record the sales of the patent and equipment. Record the sale of the patent for $770,000. On the date of the sale, the book value of the patent was $130,000. Record the sale of the equipment for $335,000. On the date of the sale, the book value of the equipment was $412,000 (cost of $572,000 less accumulated depreciation of $160,000).
Tyler Company acquired all of Jasmine Company’s outstanding stock on January 1, 2022, for $274,700 in cash. Jasmine had a book value of only $204,900 on that date. However, equipment (having an eight-year remaining life) was undervalued by $71,200 on Jasmine’s financial records. A building with a 20-year remaining life was overvalued by $15,400. Subsequent to the acquisition, Jasmine reported the following: Year Net Income Dividends Declared 2022 $ 73,800 $ 10,000 2023 74,500 40,000 2024 39,000 20,000 In accounting for this investment, Tyler has used the equity method. Selected accounts taken from the financial records of these two companies as of December 31, 2024, follow: Accounts Tyler Company Jasmine Company Revenues—operating $ (430,000) $ (195,000) Expenses 215,000 156,000 Equipment (net) 462,000 97,500 Buildings (net) 340,000 93,600 Common stock (290,000) (64,500) Retained earnings, 12/31/24 (446,000) (225,000) Required: Determine the following…
On January 1, 2023, Grouper Corporation purchased 30% of the common shares of Martz Limited for $201.000. Martz shares are not traded in an active market. The carrying amount of Martz's net assets was $540,000 on that date. Any excess of the purchase cost over Grouper's share of Martz's carrying amount is attributable to unrecorded intangibles with a 20-year life. During the year, Martz earned net income and comprehensive income of $78,000 and paid dividends of $15,600. The investment in Martz had a fair value of $206,000 at December 31, 2023. During 2024, Martz incurred a net loss and comprehensive loss of $83,000 and paid no dividends. At December 31, 2024, the fair value of the investment was $145,000 and the recoverable amount was $154,000. Assume that Grouper follows IFRS. Illustrate how the statement of comprehensive income is affected in 2023. (Enter answers in alphabetical order) Net income will include the of $ A and the of $
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On March 31, 2021, JISOO Company purchased 32,000 shares of the 40,000 outstanding shares of ROSECompany at a price of P1,200,000 with an excess of P30,000 over the book value of ROSE Company’snet assets. P13,000 of the excess is attributed to an undervalued equipment with a remaining usefullife of 10 years from the date of acquisition and the rest of the amount is attributed to goodwill. Forthe year 2021, JISOO Company reported a net income of P750,000 and paid dividends of P180,000.While ROSE Company reported a net income of P240,000 which was evenly earned during the yearand paid dividends to JISOO Company amounting to P39,000. Goodwill was not impaired in 2021.The retained earnings of JISOO Company at the end of 2021 per books is P1,025,000. JISOO Companyuses the cost method to account for its investment in ROSE Company. Non-controlling interest ismeasured at fair market value. Requirement:Compute for the non-controlling interest in net assets on December 31, 2021.
At the beginning of 2022, Metatec Incorporated acquired Ellison Technology Corporation for $650 million. In addition to cash, receivables, and inventory, the following assets and their fair values were also acquired: Plant and equipment (depreciable assets) Patent Goodwill $ 155 million 45 million 120 million The plant and equipment are depreciated over a 10-year useful life on a straight-line basis. There is no estimated residual value. The patent is estimated to have a five-year useful life, no residual value, and is amortized using the straight-line method. At the end of 2024, a change in business climate indicated to management that the assets of Ellison might be impaired. The following amounts have been determined: Plant and equipment: Undiscounted sum of future cash flows Fair value Patent: Undiscounted sum of future cash flows Fair value Goodwill: Fair value of Ellison Technology Corporation Book value of Ellison's net assets (excluding goodwill) Book value of Ellison's net…
Tyler Company acquired all of Jasmine Company's outstanding stock on January 1, 2022, for $206,000 in cash. Jasmine had a book value of only $140,000 on that date. However, equipment (having an eight-year remaining life) was undervalued by $54,400 on Jasmine's financial records. A building with a 20-year remaining life was overvalued by $10,000. Subsequent to the acquisition, Jasmine reported the following: Year 2822 2023 2024 Net Income $ 50,000 60,000 30,000 Dividends Declared $ 10,000 40,000 20,000 In accounting for this investment, Tyler has used the equity method. Selected accounts taken from the financial records of these two companies as of December 31, 2024, follow: Accounts Revenues-operating Expenses Equipment (net) Buildings (net) Common stock Retained earnings, 12/31/24 Tyler Company $ (310,000) 198,000 320,000 220,000 a. Investment in Jasmine Company b. Equity in Subsidiary Earnings c. Consolidated Net Income d. Consolidated Equipment (net) e. Consolidated Buildings (net)…
At the beginning of 2022, Metatec Incorporated acquired Ellison Technology Corporation for $660 million. In addition to cash, receivables, and inventory, the following assets and their fair values were also acquired: Plant and equipment (depreciable assets) Patent Goodwill $ 156 million 46 million 100 million The plant and equipment are depreciated over a 10-year useful life on a straight-line basis. There is no estimated residual value. The patent is estimated to have a five-year useful life, no residual value, and is amortized using the straight-line method. At the end of 2024, a change in business climate indicated to management that the assets of Ellison might be impaired. The following amounts have been determined: Plant and equipment: Undiscounted sum of future cash flows Fair value Patent: Undiscounted sum of future cash flows Fair value Goodwill: Fair value of Ellison Technology Corporation Book value of Ellison's net assets (excluding goodwill) Book value of Ellison's net…

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