On January 1, 2000, Bad Kitty, Inc bought Good Dog, LLC for $3,800,000. At the time of purchase Good Dog had the following assets and liabilities (all listed at fair value): land $1,200,000, cash $81,000, accounts receivable $380,000, investments $540,000, current liabilities $1,502,000, building $3,950,000, long term debt $2.2 million, and shareholder’s equity of $2,020,000. 3.1:  Record the journal entry to record Bad Kitty’s purchase of Good Dog. 3.2:  On December 31, 2000, the fair value of the Good Dog unit was $1,900,000. Further, Bad Kitty expected the following undiscounted net cash flow from the Good Dog unit over the next four years: $300,000, $300,000, $300,000, $1,400,000. Record any necessary journal entry.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

On January 1, 2000, Bad Kitty, Inc bought Good Dog, LLC for $3,800,000. At the time of purchase Good Dog had the
following assets and liabilities (all listed at fair value): land $1,200,000, cash $81,000, accounts receivable $380,000,
investments $540,000, current liabilities $1,502,000, building $3,950,000, long term debt $2.2 million, and shareholder’s
equity of $2,020,000.
3.1:  Record the journal entry to record Bad Kitty’s purchase of Good Dog.
3.2:  On December 31, 2000, the fair value of the Good Dog unit was $1,900,000. Further, Bad Kitty expected the
following undiscounted net cash flow from the Good Dog unit over the next four years: $300,000, $300,000, $300,000,
$1,400,000. Record any necessary journal entry.

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Capital Gains and Losses
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education