Determine the consolidated balances which Peris would present on their consolidated balance sheet for the following accounts 7. additional paid in capital 8. retained earnings
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Determine the consolidated balances which Peris would present on their consolidated
7. additional paid in capital
8.
![14) On December 31, 2013, Peris Company acquired Shanta Company's outstanding stock by paying
$400,000 cash and issuing 10,000 shares of its own $30 par value common stock, when the market price
was $32 per share. Peris paid legal and accounting fees amounting to $35,000 in addition to stock issuance
costs of $8,000. Shanta is dissolved on the date of the acquisition. Balance sheet information for Peris and
Shanta immediately preceding the acquisition is shown below, including fair values for Shanta's assets
and liabilities.
Peris
Shanta
Shanta
Book Value
Book Value
Fair Value
$140,000
Cash
490,000
$140,000
Accounts Receivable
560,000
280,000
280,000
Inventory
520,000
200,000
260,000
Land
460,000
150,000
140,000
Plant Assets – Net
980,000
325,000
355,000
Construction Permits
380,000
170,000
190,000
(140,000)
(45,000)
Accounts Payable
Other accrued expenses
Notes Payable
Common Stock ($30 par)
Common Stock ($20 par)
(460,000)
(160,000)
(800,000)
(960,000)
(140,000)
(45,000)
(460,000)
(460,000)
(200,000)
Additional P.I.C
(192,000)
(818,000)
(80,000)
(340,000)
Retained Earnings](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F555456d6-b046-4d02-bcbb-96adf1aabf44%2F085b331c-0feb-4961-b1fa-7f74af2c008c%2F4gss4e4_processed.png&w=3840&q=75)
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- On May 31,2018, Fedex Company acquired Aramex Company's outstanding stock by paying $400,000 cash and issuing 10,000 shares of its own $30 par value common stock, when the market price was $32 per share. Fedex paid legal and accounting fees amounting to S35,000 in addition to stock issuance costs of $8,000. Aramex is dissolved on the date of the acquisition. Balance sheet information for Fedex and Aramex immediately preceding the acquisition is shown below, including fair values for Aramex's assets and liabilities. Fedex Aramex Aramex Book Value Book Value Fair Value Cash 490,000 $140,000 $140,000 Accounts Receivable 560,000 280,000 280,000 Inventory 520,000 200,000 260,000 Land 460,000 150,000 140,000 Plant Assets - Net 980,000 325,000 355,000 Construction Permits 380,000 170,000 190,000 Accounts Payable Other accrued expenses Notes Payable Common Stock ($30 par) Common Stock ($20 par) (460,000) (160,000) (800,000) (960,000) (140,000) (140,000) (45,000) (45,000) (460,000) (460,000)…1. On January 1, 2013, the Sara Company entered into a transaction for acquisition of assets andliabilities of Ana Company. Sara issued P400 in long-term liabilities and 40 shares of common stockhaving a par value of P1 per share but a fair value of P10 per share. Sara paid P20 to lawyers,accountants and brokers for assistance in bringing about this purchase. Another P15 was paid inconnection with stock issuance costs. Prior to these transactions, the balance sheets for the twocompanies were as follows: Sara AnaCash P180 P 40Accounts receivable 810 180Inventory 1,080 280Land 600 360Buildings (net) 1,260 440Equipment (net) 480 100Accounts Payable ( 450) ( 80)Long-term liabilities (1,290) (400)Common stock, P1 par (330)Common stock, P20 par (240)Additional paid-in capital (1,080) (340)Retained earnings (1,260) (340)In Sara’s appraisal of Ana, three assets were deemed to be undervalued in the books of Ana: Inventoryby P10, Land by P40 and Buildings by P60.2. Compute the amount of…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.
- On January 1, 2013, the Sara Company entered into a transaction for acquisition of assets and liabilities of Ana Company. Sara issued P400 in long-term liabilities and 40 shares of common stock having a par value of P1 per share but a fair value of P10 per share. Sara paid P20 to lawyers, accountants and brokers for assistance in bringing about this purchase. Another P15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Sara Ana Cash P180 P 40 Accounts receivable 810 180 1,080 600 Inventory 280 Land 360 Buildings (net) Equipment (net) Accounts Payable Long-term liabilities Common stock, P1 par Common stock, P20 par 1,260 440 480 100 ( 450) (1,290) (330) ( 80) (400) Additional paid-in capital Retained earnings (1,080) (1,260) (240) (340) (340) In Sara's appraisal of Ana, three assets were deemed to be undervalued in the books of Ana: Inventory by P10, Land by P40 and Buildings by P60. Compute the…Nascent, Inc., acquires 60 percent of Sea-Breeze Corporation for $414,000 cash on January 1, 2015. The remaining 40 percent of the Sea-Breeze shares traded near a total value of $276,000 both before and after the acquisition date. On January 1, 2015, Sea-Breeze had the following assets and liabilities:The companies’ financial statements for the year ending December 31, 2018, follow:Answer the following questions:a. How can the accountant determine that the parent has applied the initial value method?b. What is the annual excess amortization initially recognized in connection with this acquisition?c. If the parent had applied the equity method, what investment income would the parent have recorded in 2018?d. What amount should the parent report as retained earnings in its January 1, 2018, consolidated balance sheet?e. What is consolidated net income for 2018 and what amounts are attributable to the controlling and noncontrolling interests?f. Within consolidated statements at January 1,…Arther Corporation acquired all of the outstanding $10 par voting common stock of Trent Inc., on January 1, 2016, in exchange for 50,000 shares of its $10 par voting common stock. On December 31, 2015, the common stock of Arther had a closing market price of $15 per share on a national stock exchange. The retained earnings balance of Trent Inc., was $156,000 on the date of the acquisition. Both companies continued to operate as separate business entities maintaining separate accounting records with years ending December 31.On December 31, 2018, after year-end adjustments but before the nominal accounts were closed, the companies had the following condensed statements: (see attachment)Additional information is as follows: a. There have been no changes in the common stock and additional paid-in capital in excess of par accounts since the one necessitated in 2016 by Arther’s acquisition of Trent, Inc. b. At the acquisition date, the market value of Trent’s machinery exceeded book value by…
- Bar Corporation has been looking to expand its operations and has decided to acquire the assets of Vicker Company and Kendal Company. Bar will issue 30,000 shares of its $10 par common stock to acquire the net assets of Vicker Company and will issue 15,000 shares to acquire the net assets of Kendal Company.Vicker and Kendal have the following balance sheets as of December 31, 2015:Assets Vicker KendalAccounts receivable . . . . . . . . . . . . . . . . . $ 200,000 $ 80,000Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000 85,000Property, plant, and equipment:Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000 50,000Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .500,000 300,000Accumulated depreciation. . . . . . . . .. . . (150,000) (110,000)Total assets . . . . . . . . . .…Herbert, Inc., acquired all of Rambis Company's outstanding stock on January 1, 2020, for $599,000 in cash. Annual excessamortization of $17,000 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $486,000, andRambis reported a $220,000 balance. Herbert reported internal net income of $41,000 in 2020 and $55,600 in 2021 and declared$10,000 in dividends each year. Rambis reported net income of $27,500 in 2020 and $42,100 in 2021 and declared $5,000 individends each year.a. Assume that Herbert's internal net income figures above do not include any income from the subsidiary.• If the parent uses the equity method, what is the amount reported as consolidated retained earnings on December 31, 2021?. What would be the amount of consolidated retained earnings on December 31, 2021, if the parent had applied either the initialvalue or partial equity method for internal accounting purposes?b. Under each of the following situations, what is the…Herbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2020, for $617,000 in cash. Annual excess amortization of $13,500 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $430,000, and Rambis reported a $228,000 balance. Herbert reported internal net income of $63,750 in 2020 and $75,850 in 2021 and declared $10,000 in dividends each year. Rambis reported net income of $22,600 in 2020 and $34,700 in 2021 and declared $5,000 in dividends each year. a. Assume that Herbert’s internal net income figures above do not include any income from the subsidiary. If the parent uses the equity method, what is the amount reported as consolidated retained earnings on December 31, 2021? What would be the amount of consolidated retained earnings on December 31, 2021, if the parent had applied either the initial value or partial equity method for internal accounting purposes? b. Under each of the following situations, what is…
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