HET purchased 80% of the 10,000 outstanding shares LNET had on Jan. 1, 2019 for $300,000 cash. On that day, LNET had 10,000 preferred shares, 4% cumulative, redeemable at a price which is $1 higher than the cost, and dividends were one year in arrears. HET did not own any o those preferred shares. Both companies have Dec. 31 as the reporting day. LNET reported the followings: Common shares: $180,000 on Jan 1, 2019 $40,000 on Jan 1, 2019 Retained earnings: $80,000 on Jan 1, 2019 $70,000 for 2019 Dividends declared: $6,000 on Dec 30, 2019 Preferred shares: Net income: Assume: the entity theory is used. 7) What is the total acquisition differential on Jan. 1, 2019?

HET purchased 80% of the 10,000 outstanding shares LNET had on Jan. 1, 2019 for $300,000 cash. On that day, LNET had 10,000 preferred shares, 4% cumulative, redeemable at a price which is $1 higher than the cost, and dividends were one year in arrears. HET did not own any o those preferred shares. Both companies have Dec. 31 as the reporting day. LNET reported the followings: Common shares: $180,000 on Jan 1, 2019 $40,000 on Jan 1, 2019 Retained earnings: $80,000 on Jan 1, 2019 $70,000 for 2019 Dividends declared: $6,000 on Dec 30, 2019 Preferred shares: Net income: Assume: the entity theory is used. 7) What is the total acquisition differential on Jan. 1, 2019?

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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Hh.29.
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