Barney Company is an 80% owned subsidiary Hayes Inc. During 20X2, Hayes sold land to Barney for $60,000.Based upon an independent appraisal of the land's value. The land originally cost $40,000. On July 1, 20X2,Barney sold machinery to Hayes for $20,000. The machinery was carried on Barney's books at a $30,000 cost,with accumulated depreciation of $17,000. The machinery had a remaining life of 5 years at the sale date. Bothcompanies use the straight line method depreciation. Instructions: Complete the following partial worksheet for20X3, the year subsequent to the asset sales. Key and explain all eliminations and adjustments. Hayes Inc, andSubsidiary Barney Company Partial Worksheet For the Year Ended December 31, 20X8

Consolidation of financial statements is a critical process for companies with subsidiaries,…

Answered: Barney Company is an 80% owned…

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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Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $107.800. At that date, the fair value of Severs buildings and equipment was $18,000 more than the book value. Accumulated depreciation on this date was $2400 Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price's management concluded at December 31, 20X8, that goodwill Involved in its acquisition of Saver shares had been impaired and the correct carrying value was $2.100. No additional impairment occurred in 20X9. Trial balance data for Price and Saver on December 31, 20X9, are as follows Saver Conpany Debit 337,000 23, 00 33,000 34, 000 151,000 Price Corporation Debit 54, S0 91,000 101,00e 70,000 357, 0e 122, 30e 138, e00 14,000 24,0e 11,000 22,000 35, 00 Credit Item Cash Accounts Receivable Inveetory Land uildings tauipnent Investnent in Saver Conpany Cost of doods Sold Mage tapense Depreciation Expense Interest EKpense Other Experses Dividends…
On January 1 2021 ABC acquired 90% of DEF. Analysis of data relative to this purchase indicates that goodwill of P70,000 was acquired in this purchase. The goodwill is unimpaired. On July 1, 2021, DEF sold a patent to ABC. The sales price was P140,000. DEF's books value was P70,000. DEF estimates that the patent has a life of 5 years and no salvage value. It will use straight line depreciation. For 2023, ABC's net income is P560,000 from its own operations. DEF had net income of P140,000. The 2023 net income attributable to equity holders of ABC is: 623,000 616,000 637,000 629,300
Lowes Corporation sold its storage building for $86,000 cash. Lowes originally purchased the building for $200,000, and depreciation through the date of sale totaled $120,000. Required:Prepare the journal entry to record the sale of this building. (A separate calculation of any gain or loss is recommended.)
Painted Desert has acquired several companies. Assume that Painted Desert purchased Oak Tree Unlimited for $14,000,000 cash. The book value of Oak Tree Unlimited's assets is $14,000,000 (fair value, $15,000,000), and it has liabilities of $13,000,000 (fair value, $13,000,000). Requirements 1. Compute the cost of goodwill purchased by Painted Desert. 2. Record the purchase of Oak Tree Unlimited by Painted Desert. Requirement 1. Compute the cost of goodwill purchased by Painted Desert. Purchase price to acquire Oak Tree Unlimited Fair value of Oak Tree Unlimited's assets Less: Fair value of Oak Tree Unlimited's liabilities Less: Fair value of Oak Tree Unlimited's net assets Goodwill Requirement 2. Record the purchase of Oak Tree Unlimited by Painted Desert. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit…
Amos, Inc. puchased land for $55,000 cash. They also incurred commissions of $ 1,650, property taxes of $6,000, and title insurance of $500. The $6,000 in property taxes includes $4,000 in back taxes paid by Amos, Inc. on behalf of the seller and $ 2,000 due for the current year after the purchase date. Amos also paid a contractor $ 10,000 to tear down a dilapidated building on the property. The capitalized cos of the land is: A. $61, 150 B. $73, 150 C.$ 71, 150 D. $70,650
Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $16,500 (original cost of $37,000 less accumulated depreciation of $20,500) and a fair value of $9,900. Kapono paid $29,000 cash to complete the exchange. The exchange has commercial substance. Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of $545,000 and a fair value of $790,000. Kapono paid $59,000 cash to complete the exchange. The exchange has commercial substance. Required: What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the fair value of the farmland given is $436,000 instead of $790,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the same facts as Requirement 1 and that the exchange lacked commercial substance. What is the amount of gain or loss that…
On January 1, 2021 ABC acquired 90% of DEF. Analysis of data relative to this purchase indicates that goodwill of $70,000 was acquired in this purchase. The goodwill is unimpaired. On July 1, 2021, DEF sold a patent to ABC. The sales price was $140,000. DEF's book value was $70,000. DEF estimates that the patent has a life of 5 years and no salvage value. It will use straight line depreciation. For 2023, ABC's net income is $560,000 from its own operations. DEF had net income of $140,000. The 2023 net income attributable to equity holders of ABC is: O 629,300 O 637,000 O 616,000 O 623,000
Madison Company acquired equipment on January 2, Year 1, at a cost of $20 million. The equipment has a five-year life, no residual value, and is depreciated on a straight-line basis. On January 2, Year 4, Jefferson Company determines the fair value of the asset (net of any accumulated depreciation) to be $12 million. Assuming that (1) the revaluation model is used for measurement subsequent to initial recognition under IFRS and (2) US GAAP: Depreciation expense for Year 4 will be: Select one:a. US GAAP: 2000,000 IFRS 4,000,000b. US GAAP: 4000,000 IFRS 6,000,000c. US GAAP: 4000,000 IFRS 4,000,000d. US GAAP: 2000,000 IFRS 2,000,000
TP exchanged an apartment building with an adjusted basis of $100,000 and a FMV of$175,000 for land and a small rental house. The land had a FMV of $125,000 and thehouse had a FMV of $50,000. The apartment building was 19-year real property andaccelerated depreciation of $200,000 had been taken. If straight-line depreciation hadbeen used, only $125,000 of depreciation would have been taken.Hint: Has TP received enough 1250 property to cover the 1250 taint? If not, gain mustbe recognized to the extent of the excess. a. What is the realized and recognized gain on the exchange? b. What is the character of any recognized gain?
Hoyle Company owns a manufacturing plant with a fair value of $4,600,000, a recorded cost of $8,500,000, and accumulated depreciation of $3,650,000. Patterson Company owns a warehouse with a fair value of $4,400,000, a recorded cost of $6,900,000, and accumulated depreciation of $2,800,000. Hoyle and Patterson exchange assets, with Hoyle also receiving cash of $200,000 from Patterson. The exchange is considered to have commercial substance. Required: Record the exchange on the books of: Hoyle Patterson
Q sold its warehouse for $500,000 (land $250,000; building $250,000) in the current year and purchased a larger warehouse for $550,000 (land $300,000; building $250,000). The original warehouse cost $350,000 (land $100,000; building $150,000) and was the only asset in Class 1 which had an undepreciated capital cost balance of $80,000 before the sale. Q Inc. elected to put the new warehouse into a separate Class 1 to take advantage of the 6% CCA rate. What is the minimum amount is to be reported in net income for tax purposes for the current year?
Foc

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