Breakspear Co purchased 600,000 of the voting equity shares of Fleet Co when the value of the noncontrolling interest in Fleet Co is $150,000.
Q: On January 1, 2022, Pop Co. acquired 75% of the outstanding common shares of Soda Inc. for $161,250…
A: Goodwill is 'an asset representing the future economic benefits arising from other assets acquired…
Q: On January 1, 2023, Holland Corporation paid $7 per share to a group of Zeeland Corporation…
A: Consolidation is an activity in which financial statements of a parent and its subsidiary should be…
Q: CALUM Co. paid P150,000 for its 75% interest in LUKE Co. CALUM elected to value NCI at fair value.…
A: Non Controlling Interest (NCI) : (1) For calculating NCI, the Book Value or Net Asset Value of the…
Q: Phoenix Corporation acquired the business Sun Systems for $315,000 cash and assumed all liabilities…
A: Goodwill is the difference between the identifiable net assets acquired and the amount paid in…
Q: On January 1, 2025, Caramel Company purchased 100% of the common stock of Harlor Company for…
A: Consolidated financial statement means where holding company include all assets and liabilities of…
Q: On January 1, 20X0, Pepper Corporation issued 10,000 of its $15 par value shares to acquire 45…
A: Journal Entry is the primary step to record the transaction in the books of accounts. The amount…
Q: Putt Corporation acquired 80 percent of Slice Company's voting common stock on January 1, 20X4, for…
A: Consolidation entry is recorded by the holding company to consolidate the accounts of its subsidiary…
Q: Pretzel Company purchased a 90% interest in Salt Corporation for $8,100,000 on January 1, 2023. Salt…
A: Intercompany Elimination -In the process of creating consolidated financial accounts, intercompany…
Q: Justin Company purchased a plant facility consisting of land and building from Joshua Company in…
A: Book value is the price you initially paid for the property. Its resale value may have gone up or…
Q: Halwell Motor Company acquires all of the stock of Ornex Auto Services for $60,000,000 in cash. The…
A: Goodwill:Goodwill is calculated by taking the difference between cash paid for an acquisition and…
Q: Summer Company holds assets with a fair value of $122,000 and a book value of $81,000 and…
A: INTRODUCTION: A liability is a company's responsibility to pay money to other persons or businesses…
Q: Required: a1. Compute the amount of goodwill recognized in Holland's acquisition of Zeeland. a2.…
A: a) Computation of goodwill and its allocation:DetailsAmountConsideration transferred by Holland ($8…
Q: $1,230,000 None of the options is correct
A: Step 1 Consolidated financial statements are prepared by the company when there are one or more…
Q: On 1/1/21 Playtel Corporation acquired all of the stock of Sydney Corporation for $800,000 cash. The…
A: 1. Particulars Amount Book value of net assets $800,000 Common stock 60000 Paid in…
Q: Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for…
A: The process of recording business transactions in the books of accounts for the first time is…
Q: Born Company acquires an 80% interest in Roland Company for $660,000 cash on January 1, 2017. The…
A: Business combination: Business combination refers to the combining of one or more business…
Q: On January 1, 20X6, Pumpkin Corporation acquired 70 percent of Spice Company's common stock for…
A: A consolidated balance sheet refers to the financial statement that states the combined financial…
Q: Bayside Fishing Supply Co.is acquiring Fishing Lure Specialists for $25,250 in cash. Bayside Fishing…
A: Synergy in acquisition refers to the idea that the combined value and performance of two companies,…
Q: LGM Motors acquired 80% of NS Service Center outstanding shares on January 1, 2022 by paying cash.…
A: Introduction A business's assets are things it has that will be useful to it in the future. Items…
Q: Amazon acquired 100 percent of Ferries for P275,000. At the date of acquisition, Ferries had the…
A: Acquiring company should record assets and liabilities at market value as 'Investment in Subsidiary…
Q: On January 1, 2025, Henderson Company purchased 100% of the common stock of Caramel Company for…
A: Investment in Associates and Joint venture and Subsidiary Equity Accounting method - This method is…
Q: Amazon acquired 100 percent of Ferries for P275,000. At the date of acquisition, Ferries had the…
A: Consolidation- The consolidated financial statement, which represents the financial status of both a…
Q: On January 1, 2020, Paloma Corporation exchanged $1,710,000 cash for 90 percent of the outstanding…
A: Calculation of consolidate Balances as of December 31, 2021 is as follows: Resultant table:
Q: of Zeeland's outstanding voting stock, representing a 60 percent ownership interest. The remaining…
A: Goodwill Calculation and Allocation for Holland's Acquisition of Zeelanda1. Compute the Amount of…
Q: GIGİ Group completed an acquisition of an interest in another business, Venice Company, during the…
A: As per the IFRS after acquiring the the stake in any entity, Investment in that entity will be shown…
Q: ALUM Co. paid P150,000 for its 75% interest in LUKE Co. CALUM elected to value NCI at fair value.…
A: Non Controlling Interest (NCI) : (1) For calculating NCI, the Book Value or Net Asset Value of the…
Q: On December 31, 20X8, Parkway Corporation acquired 80 percent of Street Company's common stock for…
A: A journal is a company's official book in which all business transactions which is measured in terms…
Q: PR Company pays $10,000 in cash and issues no-par stock with a fair value of $40,000 to acquire all…
A: Investment in Associates and Joint venture and SubsidiaryEquity Accounting method - This method is…
Q: Nascent, Inc., acquires 60 percent of Sea-Breeze Corporation for $414,000 cash on January 1, 2015.…
A:
Q: repare all necessary eliminating entries at 12/31/X3. Hint - there are 4.
A: Goodwill $85,500 Detailed explanation Fair Value of Net Assets = 400,000 (Capital Stock) +…
Q: Which of the following is not one of the eliminations and adjustments included on the consolidation…
A: The eliminations and adjustments which are required at the time of preparation of consolidated…
Q: LGM Motors acquired 80% of NS Service Center outstanding shares on January 1, 2022 by paying cash.…
A: INTRODUCTION Consolidated Shareholders' Equity is defined as the entire assets of the business and…
Q: Darnell Ltd. acquired 60 percent of Tisha Co. The acquisition calls for Darnell to issue an…
A: Acquisition refers to the process by which one company or business entity buys or takes over another…
Q: An acquiring company pays $45 million in cash, and issues new no-par stock with a fair value of $75…
A: Introduction: Goodwill is recognized when the purchase price is more than the total fair value of…
Q: On January 1, 2025, Henderson Company purchased 100% of the common stock of Caramel Company for…
A: At the time of preparing consolidated financial statements, the individual balances of the holding…
Q: Outside consultants are paid $300 in cash, and registration fees to issue PR's new stock are $500.…
A: Intangible Assets: These are the assets which has no physical substance, i.e., which cannot be…
Q: Bartholomew uses the proportionate share of the acquired firm’s net assets approach to measure…
A: The answer for the multiple choice question and relevant working are presented hereunder :…
Q: (a) Assuming Oriole is using the equity method under ASPE, did the initial investment include a…
A: Investments:The investment refers to the current assets which is money invested by the individual in…
Q: $10.000 owed to Plymouth. Plymouth would need to make which Elimination/Consolidation Entry at the…
A: Acquisition can be defined as the business strategy under which one superior company purchased 50%…
Q: Summer Company holds assets with a fair value of $124,000 and a book value of $96,000 and…
A: ConsolidationThe combination of one or two elements is called consolidation. When a company acquires…
Q: The DeBlois Family Co. acquired 40% of Orange Beach Co. with a $500,000 payment on January 1, 2023.…
A: Goodwill is the excess amount which is given to the shareholders of acquiree company in business…
Q: Professor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31,…
A: Once the consolidated worksheet adjustments have been made, the consolidated financial statements…
Q: On July 1, 2022, Alicia Company purchased 25% of Clarkson Company's ordinary shares. No goodwill…
A: The question is related to Accounting for Investment in Associates. As per equity method of…
Breakspear Co purchased 600,000 of the voting equity shares of Fleet Co when the value of the noncontrolling
interest in Fleet Co is $150,000.
The following information relates to Fleet at the acquisition date.
At acquisition
$’000
Share capital, $0.5 ordinary shares 500
Revaluation surplus 50
700
The
the investment in Fleet Co?
A $420,000
B $770,000
C $620,000
D $570,000
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- Putt Corporation acquired 80 percent of Slice Company's voting common stock on January 1, 20X4, for $138,000. At that date, the fair value of the noncontrolling interest was $34,500. Slice's balance sheet at the date of acquisition contained the following balances: Cash Accounts Receivable Land Building and Equipment Less: Accumulated Depreciation Total Assets SLICE COMPANY Balance Sheet January 1, 20X4 $ 20,000 35,000 90,000 300,000 (85,000) $360,000 Accounts Payable Notes Payable Common Stock Additional Paid-in Capital Retained Earnings Total Liabilities and Stockholders' Equity $ 35,000 180,000 100,000 75,000 (30,000) $360,000 At the date of acquisition, the reported book values of Slice's assets and liabilities approximated fair value. Required: Prepare the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business combination. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first…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…On January 1, 2022, Cullumber Corp. bought 31,000 shares of the available 100,000 common shares of Iceberg Inc., a publicly traded firm. This acquisition provided Cullumber with significant influence. Cullumber paid $719,000 cash for the investment. At the time of the acquisition, Iceberg reported assets of $2,507,000 and liabilities of $1,215,000. Asset values reflected fair market value, except for capital assets that had a net book value of $502,000 and a fair market value of $747,000. These assets had a remaining useful life of five years. For 2022 Iceberg reported net income of $409,000 and paid total cash dividends of $100,000. On May 16, 2023, Cullumber sold 15,500 of its shares in Iceberg for $425,000. Cullumber has no immediate plans to sell its remaining investment in Iceberg. Iceberg is actively traded, and stock price information follows: January 1, 2022 $29 December 31, 2022 $31 January 1, 2023 $32 Assuming Cullumber is using the equity method under ASPE, did the initial…
- Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $98,000. At that date, the fair value of the noncontrolling interest was $42,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Phone Corporation Smart Corporation Cash $ 52,300 $ 39,000 Accounts Receivable 99,000 59,000 Inventory 136,000 92,000 Land 66,000 49,000 Buildings & Equipment 417,000 268,000 Less: Accumulated Depreciation (151,000) (73,000) Investment in Smart Corporation 98,000 Total Assets $ 717,300 $ 434,000 Accounts Payable $ 141,500 $ 27,000 Mortgage Payable 300,800 288,000 Common Stock 72,000 40,000 Retained Earnings 203,000 79,000 Total Liabilities & Stockholders’ Equity $ 717,300 $ 434,000 At the date of the business combination, the book values of Smart’s assets and liabilities approximated fair value except for inventory, which had a fair value of…Company X acquires 100 percent of the voting shares of Company Y for $275,000 on December 31, 2008. The fair value of the net assets of Company X at the date of acquisition was $300,000. This is an example of a(n): Select one: a. extraordinary loss b. revaluation adjustment c. bargain purchase d. positive differentialVeghie Co is acquiring Fruit Inc for $25,250 in cash. Veggie Co has 2350 shares outstanding at a market price per share of $39. Fruits Inc 1500 shares outstanding at $16 per share. Neither firm has outstanding debt. The incremental value (synergy) of the acquisition is $2300. What is the value of Veggie Co after acquisition? A) 92,700 B) 88,950 C) 56,650 D) 89,150 E) 73,750
- ummer Company holds assets with a fair value of $126,000 and a book value of $95,000 and liabilities with a book value and fair value of $24,000. Required: Compute the following amounts if Parade Corporation acquires 70 percent ownership of Summer: What amount did Parade pay for the shares if the fair value of the noncontrolling interest at acquisition is $45,600 and goodwill of $50,000 is reported? What balance will be assigned to the noncontrolling interest in the consolidated balance sheet if Parade pays $87,500 to acquire its ownership and goodwill of $23,000 is reported?On May 1, Burns Corporation acquired 100 percent of the outstanding ownership shares of Quigley Corporation in exchange for $733,000 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 Book Value Fair Value $ 101,000 $ 101,000 229,000 229,000 254,000 323,000 157,500 118,500 330,000 409,000 0 220,000 Assets $1,071,500 $ 1,400,500 $ 146,000 $ 666,000 210,000 90,000 (40,500) $1,071,500 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…On January 1, 2023, Holland Corporation paid $7 per share to a group of Zeeland Corporation shareholders to acquire 60,000 shares of Zeeland's outstanding voting stock, representing a 60 percent ownership interest. The remaining 40,000 shares of Zeeland continued to trade in the market close to its recent average of $5.00 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: Current assets $ $ 16,200 Liabilities Property and equipment (net) Patents 245,000 210,200 Common stock 100,000 218,600 Retained earnings 100,000 $ 445,000 $ 445,000 S On January 1, 2023, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $45,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $244,800. Zeeland's acquisition-date fair values for its current assets and liabilities were equal to their carrying amounts. Any remaining excess of Zeeland's…
- Professor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31, 20X4, fr $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies Included the following amounts as of the date of acquisition: Item Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation. Investment in Scholar Corporation Total Assets Accounts Payable Mortgage Payable Common Stock Retained Earnings Total Liabilities & Stockholders' Equity Professor Corporation $ 50,300 90,000 Scholar Corporation $21,000 44,000 130,000 75,000 60,000 30,000 410,000 250,000 (150,000) (80,000) 102,200 $ 692,500 $340,000 $ 152,500 $ 35,000 250,000 180,000 80,000 40,000 210,000 85,000 $ 692,500 $340,000 At the date of the business combination, the book values of Scholar's assets and liabilities approximated fair value except for Inventory, which had a fair value of $81,000, and…On January 1, 2022, Monica Company acquired 70 percent of Young Company's outstanding common stock for $658,000. The fair value of the noncontrolling interest at the acquisition date was $282,000. Young reported stockholders equity accounts on that date as follows: Common stock-$10 par value Additional paid-in capital Retained earnings In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a five-year remaining life) by $40,000. Any remaining excess acquisition-date fair value was allocated to a franchise agreement to be amortized over 10 years. During the subsequent years, Young sold Monica inventory at a 30 percent gross profit rate. Monica consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the three years after this business combination was created amounted to the following: Year 2022 2023 2024 Transfer Price $ 300,000 40,000…Hello Corp. acquired 80% of outstanding shares of Piknik Inc. the stock acquisition resulted to a goodwill of P700,000. The consideration transferred by Xiao Long Bao Corp. and fair value of net assets of Piknik Inc. amounted to P4,200,000 and 4,500,000, respectively. How much is the control premium? a. 100,000 b. 200,000 c. 1,000,000 d. None of the above
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)