Bristle Co. acquired 75 percent of Silver Corporation's common stock on December 31, 20X8, for $300,000. The fair value of the non-controlling interest at that date was determined to be $100,000. Silver's balance sheet immediately before the combination reflected the following balances: Cash and Receivables $40,000 Inventory 70,000 Land 90,000 Buildings and Equipment (net) 250,000 Total Assets $450,000 Accounts Payable $30,000 Income Taxes Payable 40,000 Bonds Payable 100,000 Common Stock 100,000 Retained Earnings 180,000 Total Liabilities and Stockholders' Equity $450,000 A careful review of the fair value of Silver's assets and liabilities indicated that inventory, land, and buildings and equipment (net) had fair values of $65,000, $100,000, and, $300,000 respectively. Goodwill is assigned proportionately to Bristle and the non- controlling shareholders. What amount of goodwill will be reported in the consolidated balance sheet immediately following the acquisition? a. $0 b. $120,000 c. $65,000 d. $20,000 Smith Paints allocates overhead based on machine hours. Selected data for the most recent year follow. Overhead Rate per hour $12.63 Estimated machine hours 20,751 Actual machine hours 20,873 The amount of manufacturing overhead allocated for the year based on machine hours would have been.
Bristle Co. acquired 75 percent of Silver Corporation's common stock on December 31, 20X8, for $300,000. The fair value of the non-controlling interest at that date was determined to be $100,000. Silver's balance sheet immediately before the combination reflected the following balances: Cash and Receivables $40,000 Inventory 70,000 Land 90,000 Buildings and Equipment (net) 250,000 Total Assets $450,000 Accounts Payable $30,000 Income Taxes Payable 40,000 Bonds Payable 100,000 Common Stock 100,000 Retained Earnings 180,000 Total Liabilities and Stockholders' Equity $450,000 A careful review of the fair value of Silver's assets and liabilities indicated that inventory, land, and buildings and equipment (net) had fair values of $65,000, $100,000, and, $300,000 respectively. Goodwill is assigned proportionately to Bristle and the non- controlling shareholders. What amount of goodwill will be reported in the consolidated balance sheet immediately following the acquisition? a. $0 b. $120,000 c. $65,000 d. $20,000 Smith Paints allocates overhead based on machine hours. Selected data for the most recent year follow. Overhead Rate per hour $12.63 Estimated machine hours 20,751 Actual machine hours 20,873 The amount of manufacturing overhead allocated for the year based on machine hours would have been.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Bristle Co. acquired 75 percent of Silver Corporation's common stock on December 31,
20X8, for $300,000. The fair value of the non-controlling interest at that date was
determined to be $100,000. Silver's balance sheet immediately before the combination
reflected the following balances:
Cash and Receivables
$40,000
Inventory
70,000
Land
90,000
Buildings and Equipment (net)
250,000
Total Assets
$450,000
Accounts Payable
$30,000
Income Taxes Payable
40,000
Bonds Payable
100,000
Common Stock
100,000
Retained Earnings
180,000
Total Liabilities and Stockholders' Equity $450,000
A careful review of the fair value of Silver's assets and liabilities indicated that inventory,
land, and buildings and equipment (net) had fair values of $65,000, $100,000, and,
$300,000 respectively. Goodwill is assigned proportionately to Bristle and the non-
controlling shareholders.
What amount of goodwill will be reported in the consolidated balance sheet
immediately following the acquisition?
a. $0
b. $120,000
c. $65,000
d. $20,000
Smith Paints allocates overhead based on machine hours. Selected
data for the most recent year follow.
Overhead Rate per hour $12.63
Estimated machine hours 20,751
Actual machine hours 20,873
The amount of manufacturing overhead allocated for the year based
on machine hours would have been.
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