At the beginning of the year SassyCat acquired 30% of the outstanding common stock of LazyMouse for $1,200,000. The book value of the net assets of LazyMouse at the time of the acquisition was $4,500,000. Any excess cost over the underlying book value was assigned to a patent that was undervalued on LazyMouse's balance sheet. The patent has a remaining useful life of 5 years. For the year, LazyMouse reported net income of $300,000 and paid cash dividends of $90,000. Question 1 At the end of the year the balance of the LazyMouse investment on the books of SassyCat should be ? (enter whole dollars without dollar signs)

At the beginning of the year SassyCat acquired 30% of the outstanding common stock of LazyMouse for $1,200,000. The book value of the net assets of LazyMouse at the time of the acquisition was $4,500,000. Any excess cost over the underlying book value was assigned to a patent that was undervalued on LazyMouse's balance sheet. The patent has a remaining useful life of 5 years. For the year, LazyMouse reported net income of $300,000 and paid cash dividends of $90,000. Question 1 At the end of the year the balance of the LazyMouse investment on the books of SassyCat should be ? (enter whole dollars without dollar signs)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On August 31, 2018, ABC purchased a building at P13,000,000 to earn rent income from operating leases. The entity incurred legal fees and transfer taxes of P500,000. The building has a residual value of P1,500,000 and an estimated useful life of 30 years. During the first year of acquisition, incurred operating costs of P2,000,000 but only earned rent income of P500,000. It was valued at P16,000,000 and P14,000,000 as of the end of 2018 and 2019. What is the carrying value of the investment property as of Dec. 31, 2018 using the cost model? With solution and good accounting form pls thank you!
P Company owns 60% of the outstanding common stock of S Company. On January 1, 2016, P Company sold equipment to S Company for $300,000. The equipment cost P Company $1,000,000 on January 1st, 2010. The useful life at the time of sale was determined to be 10 years. After the sale from P to S, the management of S Company estimated that the equipment had a remaining useful life of 8 years. To solve: Prepare all journal entries for P and S (from initial purchase of equipment from 3rd parties, depreciation from initial purchase to sale between the related parties) on January 1, 2016 . In addition, prepare the w/p entry to eliminate the intercompany sale of equipment as of January 1, 2016. Finally, prepare the adjustment to depreciation on Dec. 31, 2016.
Several years ago Walker Security purchased for $120,000 a well-known trademark for padlocks and other secu-rity products. After using the trademark for three years, Walker Security discontinued it altogether when the com-pany withdrew from the lock business and concentrated on the manufacture of aircraft parts. Amortization of the trademark at the rate of $3,000 a year is being contin-ued on the basis of a 20-year life, which the owner says is consistent with accounting standards. Do you agree?Explain.
On Jan 1, 20X1, ABC Corp purchased a patent for P90,000. At the time of purchase the patent was valid for 15 years, however the patent's useful life was estimated to be only ten years due to the competitive nature of the product. How much is the amortization of patent at Dec 31, 20X1?
Pit Coporation owns 75% of Stop Company's outstanding common stock. On 01/01/21, Pit sold sold a used piece of equipment to Stop in exchange for $236,000 cash. Pit's original cost of the equipment was $728,000 and accumulated depreciaiton of 01/01/21 was $447,000. The remaining useful life of the equipment is 10 years, and Stop will use that same usefull life. Both companies use the straight line method of depreciation. Pit's Journal Entries would include:
On January 1, Year 1, Big Corporation acquired 40% interest in Small Company for $300,000. At the date of acquisition, Small Company's equity (net assets) had a book value of $550,000 and a fair value of $600,000. The difference between the book value and the fair value relates to equipment being depreciated over the remaining useful life of 10 years. During Year 1, Small Company had net income of $900,000 and paid a $40,000 dividend. Required: 3. Record the journal entry to depreciate the fair value difference 4. Determine the investment-related amounts to be reported at year-end on Big Corporation's balance sheet
Larkspur Limited purchased a patent for $86,400 on June 1, 2022. Larkspur has a calendar fiscal year end. Straight-line amortization is used for the patent, based on a five-year useful life, although the remaining legal life was 10 years. On May 31, 2024, Larkspur paid $28,800 in legal fees to successfully defend this patent in court and now wants to revise the estimate of the patent's remaining useful life to 8 years, which is the same as its remaining legal life. (a) (b) (c) (d) Record any necessary amortization prior to the change in the useful life of the patent. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. List debit entry before credit entry)
s
As of January 1, Year One, Company Z has no liabilities and only two assets: a donut maker with a net book value of $300,000 (and a fair value of $360,000) and a cookie machine with a net book value of $400,000 (and a fair value of $440,000). Each of these assets has a remaining useful life of ten years and no expected residual value. Company A offers $1 million to acquire all of the ownership of Company Z. The owners of Company Z hold out and manage to get $1.2 million in cash. What depreciation/amortization expense will Company A recognize in connection with these acquired assets at the end of Year One? Put responses in the correct input to answer the question. Select a response, navigate to the desired input and insert the response. Responses can be selected and inserted using the space bar, enter key, left mouse button or touchpad. Responses can also be moved by dragging with a mouse. The journal entry to be recorded by Company A for this acquisition is: Debit Response area…