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 $2,900. Goodwill and goodwill impairment were assignedproportionately to the controlling and noncontrolling shareholders.Trial balance data for Pie and Slice on December 31, 20X8, are as follows:ItemCashAccounts ReceivableInventoryLandBuildings and EquipmentInvestment in Slice CompanyCost of Goods SoldWage ExpenseDepreciation ExpenseInterest ExpenseOther ExpensesDividends DeclaredAccumulated DepreciationAccounts PayableWages PayableNotes PayableCommon StockRetained EarningsSalesIncome from Slice CompanyPie CorporationDebit$ 51,50090,000110,00037,000361,00001,775117,00035,00024,00011,00012,50031,000$ 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 31, 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…

interest was $31,000. The book value of Slice's net as ts and liabilities were equal, except for Slice's building= ulated depreciation on the buildings and equipment wa n a 10-year basis. dwill is not amortized, the management of Pie conclud en impaired and the correct carrying amount was $2,9 y to the controlling and noncontrolling shareholders. data for Pie and Slice on December 31, 20X8, are as fol

interest was $31,000. The book value of Slice's net as ts and liabilities were equal, except for Slice's building= ulated depreciation on the buildings and equipment wa n a 10-year basis. dwill is not amortized, the management of Pie conclud en impaired and the correct carrying amount was $2,9 y to the controlling and noncontrolling shareholders. data for Pie and Slice on December 31, 20X8, are as fol

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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People Co. acquired 80% of Steeple Co.'s common stock for $10,000,000 in cash on Jan. 2, 20x1. At that date, Steeple's 56,000,000 of net assets were fairly stated, except for an unrecorded intangible asset, favorable leases, with a $1,000,000 value (useful life of 10 years, straight-line amortization). The estimated fair value of the noncontrolling interests at the acquisition date was $2,000,000. People Co. accounts for its investment in Steeple Co. using the equity method. There are no intra-entity transactions and both firms are in the U.S.A It is now December 31, 20x3. Steeple reported net income of $250,000 for the current year, and declared and paid $40,000 in dividends. There were no impairments of Steeple's assets in 20x1, 20x2 or but goodwill is impaired by $100,000 in 20x3. Show consolidating entry R (relates to recognizing revalued assets and liabilities) that would be needed to present consolidated financial statements for 20x3.
26. Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for $13,280,000 in cash. The book value of Smith’s net assets (assets minus liabilities) was $9,700,000. The fair values of all of Smith’s assets and liabilities were equal to their book values with the following exceptions: Book Value Fair Value Receivables $ 3,200,000 $ 2,810,000 Property, plant, and equipment 9,900,000 11,490,000 Intangible assets 390,000 1,580,000 Required:Calculate the amount paid for goodwill.
On January 1, 20X1, P sells an equipment with P20,000 book value to its subsidiary S for P30,000. S intends to use the equipment for 4 years. On December 31, 20x2, S sells the equipment to an outside party for P14,000. What amount of gain or (loss) for sale of equipment is reported on the consolidated financial statements? A. Gain 14,000 B. Loss 6,000 C. Loss 1,000 D. Gain 4,000
On January 1, 20X1, Hermione, Inc., an SME, paid cash of P600,000 for all the outstanding shares of Weasley Company. The carrying value of the assets and liabilities of Weasley on January 1, 20X1 follows:Accounts Receivable 90,000Inventory 180,000Property & Equipment (net of Accumulated Depreciation of P220,000) 320,000Goodwill 100,000Liabilities 120,000Net income of Hemione and Weasley for 20X1 amounted to P200,000 and P80,000, respectively. Hermione received dividend of P25,000 from Weasley during 20X1. The Property & Equipment has original useful life of 10 years and was already held for 4 years as of date of acquisition.How much…
Subsea Co will sell machinery (which was carried in its books at cost of $120,000 less accumulated depreciation $80,000) to Paron Co for $100,000. The machinery had a remaining useful life of 3 years on the date of the intercompany sale. What is the consolidated journal entry as at Dec 20x0 for: (a) If Paron Co acquires all the shares of Subsea Co (b) if Paron Co acquires 70% of the shares of Subsea Co
MEME Corporation’s Retained Earnings at December 31, 2021 amounted to P2,000,000. On that date, the corporation declared and distributed its investment property which was acquired at a historical cost P300,000 and has a fair market value of P450,000 on December 31, 2021. On the date of declaration and distribution, by what amount should Retained Earnings be charged? A. P300,000 B. P150,000 C. None D. P450,000
Subject: AFAR
On December 31, 20X1, Par Inc reported total assets of $860,203, while Sub Corp reported total assets of $171,991. The fair values of Sub's assets and liabilities on the same date were $214421 and $49,313 respectively. On the morning of January 1, 20x2, Par agreed to acquire 100% of Sub for a total value of 86.25% of Sub for a total value of $286,678 by paying cash. On the consolidated balance sheet immediately after the acquisition, what should be the total assets reported by the combined entity under the fair-value-enterprise (FVE) method? a. $955,218 b. $979,099 Oc. $1,002,979 Od. $1,026.860 O e. $931,338 On January 1, 20X1, Par inc acquires 79.05% of Sub Corp for $153,469 in cash. Immediately before the acquisition, the book value of Sub's identifiable net assets was $104,016 with a fair value of $116,806, while the book value of Par's net assets was $204.623. What will be the amount of total shareholders' equity on the consolidated balance sheet immediately after the acquisition…
Northern Equipment Corporation purchased all the outstanding common stock of Pioneer Equipment Rental for $5,600,000 in cash. The book values and fair values of Pioneer’s assets and liabilities were Book Value Fair ValueAccounts Receivable $ 750,000 $ 650,000Buildings 4,100,000 4,800,000Equipment 110,000 200,000Accounts Payable (750,000) (750,000)Net assets $ 4,210,000 $ 4,900,000Required:1. Calculate the amount Northern Equipment should report for goodwill.2. Record Northern Equipment’s acquisition of Pioneer Equipment Rental.
On January 1, 20x1, ABC Corporationpurchased all of XYZ Corporation's commonstock for $1,200,000. On that date, the fairvalues of XYZ's assets and liabilities equaledtheir carrying amounts of $1,320,000 and$320,000, respectively. During year 1, XYZpaid cash dividends of $20,000. Selectedinformation from the separate balancesheets and income statements of ABC andXYZ as of December 31, year 1, and for theyear then ended follows: ABC Corporation(Column 1), XYZ Corporation (Column 2)
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