Pie Corporation acquired 75 percent of Slice Company's ownership on January 1, 20X8, for $93,000. At that date, the fair value of thenoncontrolling interest was $31,000. The book value of Slice's net assets at acquisition was $90,000. The book values and fair valuesof Slice's assets and liabilities were equal, except for Slice's buildings and equipment, which were worth $18,000 more than bookvalue. Accumulated depreciation on the buildings and equipment was $27,000 on the acquisition date. Buildings and equipment aredepreciated on a 10-year basis.Although goodwill is not amortized, the management of Pie concluded at December 31, 20X8, that goodwill from its purchase of Sliceshares had been impaired and the correct carrying amount was $2,900. Goodwill and goodwill impairment were assignedproportionately to the controlling and noncontrolling shareholders.Trial balance data for Pie and Slice on December 31, 20X8, are as follows:ItemCashAccounts ReceivableInventoryLandBuildings and EquipmentInvestment in Slice CompanyCost of Goods SoldWage ExpenseDepreciation ExpenseInterest ExpenseOther ExpensesDividends DeclaredAccumulated DepreciationAccounts PayableWages PayableNotes PayableCommon StockRetained EarningsSalesIncome from Slice CompanyPie CorporationDebit$ 51,50090,000110,00037,000361,000101,775117,00035,00024,00011,00012,50031,000$ 981,775Credit$ 139,00042,00015,000203,450200,000102,000260,00020,325$ 981,775Slice CompanyDebit$ 28,00019,00032,00022,000164,000102,00026,0009,0003,0004,00015,400$ 424,400Credit$ 36,00014,00010,00088,40054,00036,000186,000$424,400Required:a. Record all consolidation entries needed to prepare a three-part consolidation worksheet as of December 20X8.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

The consolidation is a form of investment accounting which is used for integrating as well as…

Answered: ildings and equipment was $27,000 on…

ildings and equipment was $27,000 on the acquisition date. Buil nagement of Pie concluded at December 31, 20X8, that goodwill carrying amount was $2,900. Goodwill and goodwill impairment

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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The following previously unreported intangible assets were acquired by a U.S. company in a business combination. Their beginning-of- current-year book values and allocation to reporting units are listed below. Trade names Distribution network Goodwill Trade names Distribution network Reporting Unit #1 Reporting Unit #2 $14,000 Both identifiable intangibles have a 5-year remaining life. Information for year-end impairment testing is as follows: Sum of Expected Sum of Expected Future Undiscounted Future Discounted Cash Flows Cash Flows 70,000 Select one: O a. $7,700 O b. $5,040 C. $9,240 d. $7,000 $11,200 56,000 $12,600 8,400 O Information for year-end goodwill impairment testing is as follows: Reporting Reporting Unit #1 Unit #2 Fair value Book value before year-end adjustments for identifiable intangible amortization and impairment charges $10,500 7,000 $47,600 49,000 $36,400 For consolidation eliminating entry (O), what amount will be reported as expense for identifiable intangibles…
COTB MC Qu. 15-70 (Algo) Assume a company sold a... Assume a company sold a piece of equipment that had an original cost of $500,000 and accumulated depreciation of $300,000. The gain on the sale was $21,000. In addition, the beginning and ending balances in the company's Property, Plant, and Equipment account were $4,700,000 and $4,600,000, respectively. Based solely on the information provided, the company's net cash provided by (used in) investing activities would be: Multiple Choice $(179,000). $(200,000). O $(158,000). $(121,000).
Goodwill Impairment On January 1, 20Y3, The Simmons Group, Inc., purchased the assets of NWS Insurance Co. for $39,457,500, a price reflecting an $5,918,625 goodwill premium. On December 31, 20Y9, The Simmons Group determined that the goodwill from the NWS acquisition was impaired and had a value of only $2,219,484. a. Determine the book value of the goodwill on December 31, 20Y9, prior to making the impairment adjustment.$fill in the blank 1 b. Illustrate the effects on the accounts and financial statements of the December 31, 20Y9, adjustment for the goodwill impairment. For decreases in accounts or outflows of cash, enter your answers as negative numbers. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Balance Sheet Assets = Liabilities + Stockholders' Equity Goodwill + No effect = No effect + Retained Earnings 20Y9 Dec. 31. fill in the blank 6 fill in the blank 7 fill in the…
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On August 1, Crane, Inc. exchanged productive assets with Cheyenne, Inc. Crane’s asset is referred to below as “Asset A,” and Cheyenne’ is referred to as “Asset B.” The following facts pertain to these assets. Asset A Asset B Original cost $117,120 $134,200 Accumulated depreciation (to date of exchange) 48,800 57,340 Fair value at date of exchange 73,200 91,500 Cash paid by Crane, Inc. 18,300 Cash received by Cheyenne, Inc. 18,300 Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for both Crane, Inc. and Cheyenne, Inc. in accordance with generally accepted accounting principles. Account Titles and Explanation Debit Credit Crane, Inc.’s Books Cheyenne, Inc.’s Books
Company X purchased Company Y for $4,000,000. The net assets of the company purchased were valued at $3,800,000. What asset will be on Company X's balance sheet for $200,000? Goodwill Amortization Not enough info Equipment
Amortization and depletion entries Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows: a. On December 31, the company determined that $930,000 of goodwill was impaired. b. Governmental and legal costs of $6,720,000 were incurred on September 30 in obtaining a patent with an estimated economic life of 15 years. Amortization is to be for one-fourth of a year. c. Timber rights on a tract of land were purchased for $800,000 on February 4. The stand of timber is estimated at 5,000,000 board feet. During the current year, 1,400,000 board feet of timber were cut and sold. Required: 1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items. Do not round your intermediate calculation. Impairment, Amortization or Depletion Expense Item a. b. C. 2. Journalize the adjusting entries to record the amortization, depletion, or impairment for each item. If an…
First Company purchased Second Company for $19,000,000 cash. At the time of purchase, Second Company's assets had a market value of $28,000,000 and the liabilities had a market value of $13,000,000. At the time of the purchase, Second Company's assets had a book value of $15,000,000, and the liabilities had a book value of $9,000,000. What amount of goodwill is recorded?