Instruction: 1. compute amount reported as consolidated net income for 2022. 2. Give the elimination entries required to eliminate the effects of the intercompany sale of equipment in 2022.
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Kline industries has owned 80% of Spawn Corp for many years. On January 1, 2021, Kline paid Spawn $270,000 to acquire equipment that Spawn had purchased on January 1, 2018 for $300,000. The equipment is expected to have no scrap value and is
Kline reported operating earnings of $100,000 for 2022 and paid dividends of $40,000. Spawn reported net income of$40,000 and paid dividends of $20,000 in 2022.
Instruction:
1. compute amount reported as consolidated net income for 2022.
2. Give the elimination entries required to eliminate the effects of the intercompany sale of equipment in 2022.
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- On January 1, 2020, Alison, Inc., paid $83,800 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $290,500 and liabilities of $117,000. A patent held by Holister having a $13,600 book value was actually worth $31,600. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2020, Holister earned income of $40,700 and declared and paid dividends of $14,000. In 2021, it had income of $70,000 and dividends of $19,000. During 2021, the fair value of Allison’s investment in Holister had risen from $95,380 to $106,180. Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31, 2021? Assuming Alison uses fair-value accounting, what income from the investment in Holister should be reported for 2021?On January 1, 2021, CAE Company acquires an asset for $450,000,000. It had to spend an additional $24,000,000 to prepare the asset for the management's intended use. The asset's retirement costs at the end of its useful life of 30 years are estimated to $130,000,000. The discount rate is 5%. The asset's residual value is $80,000,000 and the straight-line method is used for depreciation. CAE Company applies IFRS. Ignore decimals in your calculations. Required- a) Prepare the journal entry to record the acquisition of the asset on January 1, 2021, assuming cash is used to pay for the asset's related costs (other than the ARO). b) Prepare all required adjusting entries on December 31, 2021 and December 31, 2022. c) Assume that on January 1st, 2030, the asset's retirement costs are re-estimated to $150,000,000, while the asset's total useful life is shortened to 25 years. The discount rate to be used is 5.5%. Prepare the journal entry to record this change on January 1st, 2030 and the…In January 2014, the Jennifer Corporation purchased a patent for $231,000 from Travis Company that had a remaining legal life of 14 years. Jennifer estimated that the remaining economic life would be seven years. In January 2018, the company incurred $30,000 in legal costs to defend the patent from an infringement. Jennifer's lawyers were successful, and the remaining years of benefit from the patent were estimated to be six years. What is the patent amortization expense for 2018? $9,923 $21,500 $7,615 $16,500
- Procter Company owns 80% of the outstanding stock of Silex Company. On January 1, 2019, Silex Company sold land to Procter Company for $350,000 and a building for $500,000. Silex had originally purchased the land on June 30, 2010, for $200,000. Silex Company originally purchased a building for 600,000 in January of 2009. The estimated useful life of the building and the new machinery is 15 years. Required: A. Prepare the entries on the books of Procter related to the intercompany sale of land for the years ended December 31, 2019 and December 31, 2020. B. Prepare in general journal form the workpaper entries necessary because of the intercompany sale of land in: 1. The consolidated financial statements workpaper for the year ended December 31, 2019. 2. The consolidated financial statements workpaper for the year ended December 31, 2020.Frappe Company is acquiring Frappuccino Corporation on January 1, 2020. The cumulative earnings of Frappuccino from 2015 to 2019 amounted to P7,200,000. On January 1, 2020, the assets and liabilities of Frappuccino at appraised values are P10,350,000 and P6,650,000, respectively. The normal return in Frappuccino 's industry is 20%. Goodwill is computed by capitalizing at 25% average earnings in excess of normal return based on appraised value of net assets. What is the amount paid by Frappe in the acquisition of Frappuccino Corporation?On January 1, 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $240,000 in cash. The equipment had originally cost $216,000 but had a book value of only $132,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $340,000 in net income in 2021 (not including any investment income) while Brannigan reported $111,200. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $4,400 per year. kipped a. What is consolidated net income for 2021? b. What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan? c. What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90-percent of Brannigan and the equipment transfer was upstream? d. What is the consolidated net income for 2022 if Ackerman reports $360,000 (does…
- On January 1, 2018, D, Incorporated, paid $88,959 for a 30% interest in S Corporation. This investee had assets with a book value of $500,000 and liabilities of $300,000. A patent held by S Inc having a book value of $10,000 was actually worth $48,000 with a four year remaining life. Any goodwill associated with this acquisition is considered to have an indefinite life. During 2018, S Inc reported income of $55,900 and paid dividends of $28,900 while in 2019 it reported income of $79,900 and dividends of $29,900. Assume D Inc. Has the ability to significantly influence the operations of S Inc. During the 2018, S Corporation selling inventory costing 40,000 to to D Corporation for 60,000 at the end of fiscal year, D Inc, still retain 20,000. During the 2019 S Corporation selling inventory costing 35,000 to to D Corporation for 50,000 at the end of fiscal year, d Inc. still retain 15,000. The retain inventoy was selling at the beginning of the following year. 8-How Much Your Equity…The Skywalker Corporation finalized the sale of its droid manufacturing division for $9.4 million on December 31, 2024, at the close of the fiscal year. The droid manufacturing business segment qualifies as a component of the entity, according to GAAP Consider the The income from operations of the segment during 2024 was $4.2 million. Pretax income from other continuing operations for the year totaled $12.2 million. The income tax rate is 25%. Prepare the lower portion of the 2024 income statement beginning with income from continuing operations before income taxesOn August 31, 2018, ABC purchased a building at P13,000,000 to earn rent income from operating leases. The entity incurred legal fees and transfer taxes of P500,000. The building has a residual value of P1,500,000 and an estimated useful life of 30 years. During the first year of acquisition, incurred operating costs of P2,000,000 but only earned rent income of P500,000. It was valued at P16,000,000 and P14,000,000 as of the end of 2018 and 2019. What is the carrying value of the investment property as of Dec. 31, 2018 using the cost model? With solution and good accounting form pls thank you!
- Foxx Corporation acquired all of Greenburg Company's outstanding stock on January 1, 2019. for $586,000 cash. Greenburg's accounting records showed net assets on that date of $440,000, although equipment with a 10-year remaining life was undervalued on the records by $56,500. Any recognized goodwill is considered to have an indefinite life. Greenburg reports net income in 2019 of $105,000 and $137,500 in 2020. The subsidiary declared dividends of $20,000 in each of these two years. Account balances for the year ending December 31, 2021, follow. Credit balances are indicated by parentheses. Revenues Cost of goods sold Depreciation expense Investment income Foxx $(1,164, 000) 145, 500 358, e00 (20,000) $ (680, 500) Greenburg $ (620, 000) 155, e00 440, 000 Net income (25, 000) Retained earnings, 1/1/21 Net income $(1,160, 000) (689, 500) 120, e00 $ (342, 500) (25, 000) 20,000 $ (347, 500) Dividends declared Retained earnings, 12/31/21 $(1,720,500) Current assets 373, e00 586, 000 1,882,…On January 1, 2021, Pine Company owns 40 percent (76,000 shares) of Seacrest, Inc., which it purchased several years ago for $423,700. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2021, is $549,100. Excess patent cost amortization of $22,800 is still being recognized each year. During 2021, Seacrest reports net income of $558,000 and a $228,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Pine sold 15,200 shares of Seacrest on August 1, 2021, for $165,354 in cash. However, Pine retains the ability to significantly influence the investee. During the last quarter of 2020, Pine sold $59,000 in inventory (which it had originally purchased for only $35,400) to Seacrest. At the end of that fiscal year, Seacrest's inventory retained $14,600 (at sales price) of this merchandise, which was subsequently sold in the first quarter…ABC Company sells to XYZ, 5 used factory equipment, each of which was acquired at P20,000, 3 years ago. The carrying value of each equipment is P5,000. The selling price of each equipment is P3,000. Upon executing the sale, ABC received P5,000 down payment and a 10% 1 year promissory note for the balance. Compute the amount of loss ABC has suffered from the sale of the equipment.
