ney Co sa wholesale orstnoutor or auto parts and uses the cash method of accountbing. The company's s $11.175,000 per year for the last few years. However, Gaffney has the opportunity to acquire an unincorporated comp sales of $12,292,500. Complete the following paragraph regarding the accounting implications of acquiring the competitor. For the year of acquisition. Gaffney and the acquired business will be treated as a single business - .Gaftney consider the combined gross receipts of both businesses in determining if the average annual gross receipts for the pr lexceed statutorv threshold. Therefore, Gaffney will likely be able to continun using the cash me

ney Co sa wholesale orstnoutor or auto parts and uses the cash method of accountbing. The company's s $11.175,000 per year for the last few years. However, Gaffney has the opportunity to acquire an unincorporated comp sales of $12,292,500. Complete the following paragraph regarding the accounting implications of acquiring the competitor. For the year of acquisition. Gaffney and the acquired business will be treated as a single business - .Gaftney consider the combined gross receipts of both businesses in determining if the average annual gross receipts for the pr lexceed statutorv threshold. Therefore, Gaffney will likely be able to continun using the cash me

Name: Gaffney Corporation is a wholesale distributor of auto parts and uses
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Description: Gaffney Corporation is a wholesale distributor of auto parts and uses the cash method of accounting. The company's sales have been about$11,175,000 per year for the last few years. However, Gaffney has the opportunity to acquire an unincorporated co

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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Concept explainers

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is

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Question

Gaffney Corporation is a wholesale distributor of auto parts and uses the cash method of accounting. The company's sales have been about
$11,175,000 per year for the last few years. However, Gaffney has the opportunity to acquire an unincorporated competitor with annual
sales of $12,292,500.
Complete the following paragraph regarding the accounting implications of acquiring the competitor.
For the year of acquisition. Gaffney and the acquired business will be treated as o single business
consider the combined gross receipts of both businesses in determining if the average annual gross receipts for the prior three-year period
EV.Gaffney must Y
exceed $
statutory threshold. Therefore, Gaffney will likely be able to continue using the cash method
EV for
the year of the acquisition.

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Please solving this problem
A-5
Write the complete solutions legibly.
please print the journal entries
On January 1, 2019, Triple A Company acquired Bodyguard Company’s outstanding common stock for $842,000 in cash. As of that date the following information was acquired from Bodyguard, the subsidiary of Triple A: Building (12-year life) was undervalued on its balance sheet by $72,000 Equipment (10-year life) was undervalued by $10,000 Licensing agreement (20-year life) unrecorded, assessed at $40,000 Book value as at January 1, 2019 was $720,000 Net income reported during 2019 was $100,000 Dividends paid in 2019 $30,000 Earnings by Bodyguard (subsidiary) in 2020 $120,000 Dividends distributed by Bodyguard in 2020 $20,000 As of December 31, 2021Triple A and Bodyguard reported the following for the year: Triple A December 31, 2021 Bodyguard December 31, 2021 Debit Credit Debit Credit Buildings $1,540,000 $460,000 Cash and receivables 50,000 90,000 Common stock $900,000 $400,000 Dividends paid 70,000 10,000 Equipment…