January 1, 2020 Para Inc. acquired all of the outstanding common stock of Sail, Co. for cash. The book values of Sail's assets | liabilities approximated current values except that the book value of its building was less than its fair value (i.e., lervalued), and the book value of a patent was greater than its fair value (i.e., overvalued). Assume that both assets have a aining useful life of 11 years. When preparing Para's 2020 consolidated income statement, which of the following ustments would be made? ) A) Depreciation expense would be decreased and amortization expense would be increased. ) B) Depreciation expense would be increased and amortization expense would be decreased. )C) Both depreciation expense and amortization expense would be increased. ) D) Both depreciation expense and amortization expense would be decreased.

January 1, 2020 Para Inc. acquired all of the outstanding common stock of Sail, Co. for cash. The book values of Sail's assets | liabilities approximated current values except that the book value of its building was less than its fair value (i.e., lervalued), and the book value of a patent was greater than its fair value (i.e., overvalued). Assume that both assets have a aining useful life of 11 years. When preparing Para's 2020 consolidated income statement, which of the following ustments would be made? ) A) Depreciation expense would be decreased and amortization expense would be increased. ) B) Depreciation expense would be increased and amortization expense would be decreased. )C) Both depreciation expense and amortization expense would be increased. ) D) Both depreciation expense and amortization expense would be decreased.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

6. On January 2, 2019, U Co. purchased 75% of the outstanding shares of N Co. resulting to a goodwill of P60,000. On that date, the non-cash assets of N Co. whose book values did not equal their book values were accounts receivable which was overstated by P4,500 and equipment with a remaining 5 year life on the purchase date which was understated by P50,000. For the year 2010, U and N reported net income of P350,000 and P200,000 each respectively. U’s beginning inventory included merchandise purchased from N Company amounting to P39,000 which was sold to them by N at a 30% markup, 80% of these goods were sold during the year. N, on the other hand, included inventory items which they purchased from U Co. amounting to 18,000. These goods were sold by U at a 25% markup. 90% of these goods were sold by N for the year. What is the Noncontrolling interest's share in the Net income of the subsidiary?
PLEASE GIVE ANSWER 13&14 BOTH
Background: On December 31, 2021, Company A purchased acquired various assets from Company B as follows:and assumed liabilities does not meet the definition of a business under ASC 805.UmbrellaTableLemon squeezerThe books and records of Company B value these assets at December 31, 2021 as followsUmbrella $100Table $50Lemon squeezer $150Company B determined the fair value for these assets on January 1, 2022 to be as follows:Umbrella $80Table $20Lemon squeezer $100On December 31, 2021, Company A paid $350 for these assets. Question How should the acquired asset be valued and reflected on Company A's books on January 1, 2022? US GAAP standards used: ASC_____,EY FRD Business Combinations, p. Methodology applied: Calculation: Findings: Conclusion:
What is the capitalized cost of the acquired PPE if ABC Corp. madethe following property acquisitions on Jan. 1, 2021:-Acquired a piece of land in exchange for its shares. The shareshave a total fair value of P5,000,000 while the fair value of theland is P5,100,000.-Purchased a machinery on installment. The cash price isP800,000 while the installment price is P1,000,000. It requireda down payment of P200,000 and the balance payable everyJan. 1 for 4 years, starting in the year 2022. Question 1. What is the capitalized cost?
(A) What is the capitalized cost of the acquired PPE if ABC Corp. made the following property acquisitions on Jan. 1, 2021: a. Acquired a piece of land in exchange for its shares. The shares have a total fair value of P5,000,000 while the fair value of the land is P5,100,000. b. Purchased a machinery on installment. The cash price is P800,000 while the installment price is P1,000,000. It required a down payment of P200,000 and the balance payable every Jan. 1 for 4 years, starting in the year 2022. 1. What is the capitalized cost? (B) ABC acquired for a lumpsum price of P6,000,000 a piece of land and the building on it. The land and building have fair values of P4,2000,000 and P2,800,000 respectively. The building is still usable but the entity plans to demolish it and construct a new building. Later, total demolition cost incurred was P400,000 but scraps were gathered and sold for P50,000. The new building had a total construction cost of P7,000,000, useful life of 25 years, and a…
H1.
Do not give answer in image
Accounting On January 1, 2022, Pronto Company acquired all of Speedy Inc.'s voting stock for $28,800,000. Speedy's net assets were reported at amounts approximating book value, but Pronto determined that Speedy had the following previously unreported intangible assets: Developed technology, fair value $2,400,000, 5-year life • Favorable leases, fair value $1,200,000, 4-year life ● Speedy's shareholders' equity on January 1, 2022, was $12,000,000. It is now December 31, 2023 (two years later). Speedy reported net income of $960,000 in 2022. There are no impairments of identifiable intangibles or goodwill in 2022 or 2023. Pronto uses the complete equity method to report its investment in Speedy on its own books. Speedy's December 31, 2023, trial balance appears below. Dr (Cr) $24,000,000 Current assets Property and equipment, net 60,000,000 Liabilities (69,600,000) Capital stock (2,400,000) Retained earnings, January 1 (10,560,000) Sales revenue (84,000,000) Cost of goods sold 72,000,000…
None
TCO C) Floyd Company purchases Haeger Company for $800,000cash on January 1, 2011. The book value of Haeger Company’s netassets, as reflected on its December 31, 2010 balance sheet, is$620,000. An analysis by Floyd on December 31, 2010 indicates thatthe fair value of Haeger’s tangible assets exceeded the book valueby $60,000, and the fair value of identifiable intangible assetsexceeded book value by $45,000. How much goodwill should berecognized by Floyd Company when recording the purchase of HaegerCompany?