EXERCISE 3-5Treasury Stock Held by Subsidiary LO 8Pool Company purchased 90% of the outstanding common stock of Spruce Company on December31, 2019, for cash. At that time the balance sheet of Spruce Company was as follows:Current assets$1,050,000Plant and equipment990,000Land170,000Total assets$2.210,000Liabilities$ 820,000Common stock, $20 par value900,000Other contributed capital440.000Retained earnings150,000Total2,310.000Less treasury stock at cost, 5,000 shares100,000Total equities$2,210,000Required:Prepare the elimination entry required for the preparation of a consolidated balance sheet workpa-per on December 31, 2019, assuming:(1) The purchase price of the stock was $1,400,000. Assume that any difference between thebook value of net assets and the value implied by the purchase price relates to subsidiary land.(2) The purchase price of the stock was $1,160,000. Assume that the subsidiary land has a fairvalue of $180,000, and the other assets and liabilities are fairly valued.

●(1). When the purchase price of the stock was $1,400,000. Answer:

Answered: EXERCISE 3-5 Treasury Stock Held by…

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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QUESTION 8 Dallas Corporation purchased 300 shares of its own $10 par value common stock for $7,500. Later, these shares are sold for $8,000 cash. The journal entry to record the sale includes a: A. $500 increase to Paid-in Capital from Treasury Stock B. $500 increase to Gain on Sale of Treasury Stock C. $4,800 increase to Paid-in Capital from Treasury Stock D. $500 to Loss on Sale of Treasury Stock
LL %24 The separate condensed balance sheets of Patrick Corporation and its wholly-owned subsidiary, Sean Corporation, are as BALANCE SHEETS December 31, 2020 Patrick Sean Cash Accounts receivable (net) Inventories Plant and equipment (net) Investment in Sean 24 000'9 000 9 000 00000 000 0 000 $1,400,000 $ 418,000 Total assets 82,000 Accounts payable Long-term debt Common stock ($10 par) Additional paid-in capital Retained earnings 000'8 000 306,000 262,000 000't78 Total liabilities and shareholders' 000 Additional Information: • On December 31, 2020, Patrick acquired 100 percent of Sean's voting stock in exchange for $454,000. • At the acquisition date, the fair values of Sean's assets and liabilities equaled their carrying amounts, respectively, except that the fair value of certain items in Sean's inventory were $20,000 more than their carrying amounts. In the December 31, 2020, consolidated balance sheet of Patrick and its subsidiary, what amount of total assets should be reported?…
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Assets Liabilities Capital stock Retained earnings Total equities Assets Liabilities Capital stock Retained earnings Total equities Balance Sheet December 31, 2025 Skysong Company Balance Sheet December 31, 2025 $2040000 $210000 1020000 810000 $2040000 $1440000 $320000 970000 150000 $1440000 If Oriole Company acquired a 30% interest in Skysong Company on December 31, 2025 for $350000 and during 2026, Skysong had net income of $141000 and paid a cash dividend of $51000, applying the equity method would result in a debit balance in the Equity Investments (Skysong) account at the end of 2026 of O $392300. ○ $377000. ○ $350000. O $334700.
Situation 1Waterway Cosmetics acquired 10% of the 189,000 shares of common stock of Martinez Fashion at a total cost of $12 per share on March 18, 2020. On June 30, Martinez declared and paid $77,300 cash dividend to all stockholders. On December 31, Martinez reported net income of $122,300 for the year. At December 31, the market price of Martinez Fashion was $13 per share.Situation 2Wildhorse, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles’s 32,100 outstanding shares of common stock at a total cost of $9 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $32,700 to all stockholders. On December 31, Seles reported a net income of $78,800 for the year.Prepare all necessary journal entries in 2020 for both situations.
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Situation 1 Pharoah Tables acquired 15% of the 4,800,000 shares of common stock of Robot Sofas at a total cost of $7.80 per share on April 1, 2025. On August 8, Robot Sofas declared and paid a $267,000 cash dividend. On December 31, Robot Sofas market price was $8.30 per share and the company reported net income of $625,000 for the year. Situation 2 On January 1, 2025, Coronado Company purchased 40% of Santos Corporation 525,000 outstanding shares of common stock at a total cost of $14 per share. On October 25, Santos declared and paid a cash dividend of $0.40 per share. On December 31, Santos reported a net income of $928,000 for the year and the market price of its common stock was $15 per share. Prepare all necessary journal entries in 2025 for both situations. (Credit account titles are automatically Indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries…

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