Cashen co.paid solve this general accounting question Cashen Co. paid $2,400,000 to acquire all of the common stock ofJanex Corp. on January 1, 2012. Janex's reported earnings for 2012totaled $432,000, and it paid $120,000 in dividends during the year.The amortization of allocations related to the investment was$24,000. Cashen's net income, not including the investment, was$3,180,000, and it paid dividends of $900,000.What is the amount of consolidated net income for the year 2012?a. $3,300,000.b. $3,612,000.c. $3,180,000.d. $3,420,000.e. $3,588,000.

Step 1: Define Consolidated Net IncomeIn accordance with GAAP, "Consolidated Net Income" refers to…

Answered: Cashen Co. paid $2,400,000 to acquire…

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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Scott Company paid $2.800,000 to acquire all of the common stock of Dawn Corporation on January 1, 2023. Dawn's mported eanings for 2023 totaled $512.000 and it $160,000 in dividends during the year. The amortization of allocations related to the investment was $28.000. Scott's net income not including the investment, was $3.310.000 and it paid dividends of $950,000. What is the amount of consolidated net income for the year 2023? O $3,150.000 O $3.282.000 O $3.310.000 O $3,794,000 O $3.822.000
Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2018, the companies had the following account balances:Intra-entity sales of $320,000 occurred during 2017 and again in 2018. This merchandise cost $240,000 each year. Of the total transfers, $70,000 was still held on December 31, 2017, with $50,000 unsold on December 31, 2018.a. For consolidation purposes, does the direction of the transfers (upstream or downstream) affect the balances to be reported here?b. Prepare a consolidated income statement for the year ending December 31, 2018.
On December 31, 2016, the end of the fiscal year, California Microtech Corporation completed the sale of its semiconductor business for $10 million. The business segment qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $8 million. The loss from operations of the segment during 2016 was $3.6 million. Pretax income from continuing operations for the year totaled $5.8 million. The income tax rate is 30%. Prepare the lower portion of the 2016 income statement beginning with pretax income from continuing operations. Ignore EPS disclosures.
BuyCo, Inc. holds 25 percent of the outstanding shares of Marqueen Company and appropriately applies the equity method of accounting. Excess cost amortization (related to a patent) associated with this investment amounts to $10,000 per year. For 2017, Marqueen reported earnings of $100,000 and declares cash dividends of $30,000. During that year, Marqueen acquired inventory for $50,000, which it then sold to BuyCo for $80,000. At the end of 2017, BuyCo continued to hold merchandise with a transfer price of $32,000.a. What Equity in Investee Income should BuyCo report for 2017?b. How will the intra-entity transfer affect BuyCo’s reporting in 2018?c. If BuyCo had sold the inventory to Marqueen, how would the answers to (a) and (b) have changed?
At the start of the current year, SBC Corp. purchased 30% of Sky Tech Inc. for $51 million. At the time of purchase, the carrying value of Sky Tech's net assets was $80 million. The fair value of Sky Tech's depreciable assets was $20 million in excess of their book value. For this yeat, Sky Tech reported a net income of $80 million and declared and paid S20 million in dividends. The total amount of additional depreciation to be recognized by SBC over the remaining life of the assets is: Multiple Choice $6.0 million. $20 million. $30 million. None of these answer choices are correct.
BuyCo holds 25 percent of the outstanding shares of Marqueen and appropriately applies the equity method of accounting. Excess cost amortization (related to a patent) associated with this investment amounts to $10,000 per year. For 2012, Marqueen reported earnings of $100,000 and pays cash dividends of $30,000. During that year, Marqueen acquired inventory for $50,000, which it then sold to BuyCo for $80,000. At the end of 2012, BuyCo continued to hold merchandise with a transfer price of $32,000. a. What Equity in Investee Income should BuyCo report for 2012? (Do not round intermediate calculations.) Equity in Investee Income b. How will the intra-entity transfer affect BuyCo's reporting in 2013? (Input the amount as a positive value.) Equity accrual for 2013 will increase by $ C. If BuyCo had sold the inventory to Marqueen, whether the answers to (a) and (b) would change? Yes O No
On January 1, 2017, Perla Corporation purchased all of the outstanding common stock of Siena Company for $220,000 cash. On that date, Siena's net assets had a book value of $148,000. Equipment with an 8-year life was undervalued by $20,000 in Siena's financial records. Siena has a database that is valued at $52,000 and will be amortized over ten years. Siena reported net income of $25,000 in the year of acquisition and $32,500 in the following year. Dividends of $2,500 were declared and paid for 2017 and 2018. For each of the two companies, selected account balances as of December 31, 2019 are as follows: Perla Siena $ 250,000 $ 142,500 175,000 Revenues Expenses Equipment (net) Retained Earnings, beginning of the year 100,000 125,000 150,000 25,000 000 Dividends Pa id 5,000 What is the consolidated net income for 2019 ?
Trabant Co purchased all of the ordinary share capital of Skoda Co during 2008. on this date the fair value of the net assets of Skoda Co was $15 million. The terms of the purchase agreement provided for immediate cash considerations of $10 million and a further $10 million deferred for 12 months. Trabant Co paid its advisors $1 million in costs directly related to the acquisition. Trabant Co's cost of capital is 6%. What goodwill arises on the acquisition?
At the start of the current year, SBC Corp. purchased 30% of Sky Tech Inc. for $45 million. At the time of purchase, the carrying value of Sky Tech's net assets was $75 million. The fair value of Sky Tech's depreciable assets was $15 million in excess of their book value. For this year, Sky Tech reported a net income of $75 million and declared and paid $15 million in dividends.The total amount of additional depreciation to be recognized by SBC over the remaining life of the assets is:
On January 1, 2017, Fisher Corporation purchased 40 percent (80,000 shares) of the common stock of Bowden, Inc., for $982,000 in cash and began to use the equity method for the investment. The price paid represented a $60,000 payment in excess of the book value of Fisher’s share of Bowden’s underlying net assets. Fisher was willing to make this extra payment because of a recently developed patent held by Bowden with a 15-year remaining life. All other assets were considered appropriately valued on Bowden’s books.Bowden declares and pays a $100,000 cash dividend to its stockholders each year on September 15. Bowden reported net income of $400,000 in 2017 and $380,000 in 2018. Each income figure was earned evenly throughout its respective years.On July 1, 2018, Fisher sold 10 percent (20,000 shares) of Bowden’s outstanding shares for $330,000 in cash. Although it sold this interest, Fisher maintained the ability to significantly influence Bowden’s decision-making process.Prepare the…
On January 1, 2017, Fisher Corporation purchased 40 percent (80,000 shares) of the common stock of Bowden, Inc., for $982,000 in cash and began to use the equity method for the investment. The price paid represented a $60,000 payment in excess of the book value of Fisher’s share of Bowden’s underlying net assets. Fisher was willing to make this extra payment because of a recently developed patent held by Bowden with a 15-year remaining life. All other assets were considered appropriately valued on Bowden’s books. Bowden declares and pays a $100,000 cash dividend to its stockholders each year on September 15. Bowden reported net income of $400,000 in 2017 and $380,000 in 2018. Each income figure was earned evenly throughout its respective years. On July 1, 2018, Fisher sold 10 percent (20,000 shares) of Bowden’s outstanding shares for $330,000 in cash. Although it sold this interest, Fisher maintained the ability to significantly influence Bowden’s decision-making process. Prepare the…
Herbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2017, for $574,000 in cash. Annual excess amortization of $12,000 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $400,000, and Rambis reported a $200,000 balance. Herbert reported internal net income of $40,000 in 2017 and $50,000 in 2018 and declared $10,000 in dividends each year. Rambis reported net income of $20,000 in 2017 and $30,000 in 2018 and declared $5,000 in dividends each year.

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