On January 1, 2020, Pail Corporation acquired 75 percent of Sand Company's common stock for $525,000 cash. The fair value of the noncontrolling interest at that date was determined to be $175,000. At the date of the business combination, the book values of Sand's net assets and liabilities approximated fair value except for depreciable plant assets, which were UNDERvalued by $4000 and Inventory, which was OVERvalued by $4500 The remaining useful life of the plant assets was set at 10 years. For the year ended December 31, 2020, Pail reported Depreciation Expense of $15000 on its general ledger. Sand reported Depreciation Expense of $9000 on its general ledger. What amount of Depreciation Expense should be reported on the 12/31/20 consolidated Income Statement?

On January 1, 2020, Pail Corporation acquired 75 percent of Sand Company's common stock for $525,000 cash. The fair value of the noncontrolling interest at that date was determined to be $175,000. At the date of the business combination, the book values of Sand's net assets and liabilities approximated fair value except for depreciable plant assets, which were UNDERvalued by $4000 and Inventory, which was OVERvalued by $4500 The remaining useful life of the plant assets was set at 10 years. For the year ended December 31, 2020, Pail reported Depreciation Expense of $15000 on its general ledger. Sand reported Depreciation Expense of $9000 on its general ledger. What amount of Depreciation Expense should be reported on the 12/31/20 consolidated Income Statement?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 8MC

See similar textbooks

Similar questions

On January 1, 2020, Pail Corporation acquired 75 percent of Sand Company's common stock for $525,000 cash. The fair value of the noncontrolling interest at that date was determined to be $175,000. At the date of the business combination, the book values of Sand's net assets and liabilities approximated fair value except for depreciable plant assets, which were OVERvalued by $4000 and Inventory, which was UNDERvalued by $9000 The remaining useful life of the plant assets was set at 10 years. For the year ended December 31, 2020, Pail reported Cost of Goods Sold of $14000 on its general ledger. Sand reported Cost of Goods Sold of $16000 on its general ledger. What amount of COST OF GOODS SOLD should be reported on the 12/31/20 consolidated Income Statement?
On January 1, 2018, ICT Company purchased 80% of ESP Company's stock for P975,000. On this date, the carrying amount of ESP Company's net assets were P1,000,000. The fair value of ESP Company's identifiable assets and liabilities were the same as their carrying amount except for plant assets (net) which were P100,000 in excess of the carrying amount. For the year ended, ESP Company had a net income of P190,000 and paid cash dividends totaling P125,000. Parent opted to measure NCI proportionate to its share on ESP's identifiable net assets. In the December 31, 2018 consolidated balance sheet, NCI should be reported at:
On January 1, 2022, Pop Co. acquired 75% of the outstanding common shares of Soda Inc. for $161,250 cash. On that date, Soda had common shares of $156,250 and retained earnings of $31,250. At acquisition, the identifiable assets and liabilities of Soda had fair values that were equal to carrying amounts except for inventory, which had fair value $8,000 greater than carrying amount and plant and equipment, which had fair values $10,000 greater than carrying amounts. The plant and equipment had a remaining useful life of 5 years on January 1, 2022.Any goodwill will be tested yearly for impairment. Balance sheets as of December 31, 2022 are presented below: Cash Accounts receivable Inventory Land Plant & Equipment, net Investment in Soda Inc. - equity Current liabilities Bonds payable Common shares Retained earnings Pop Co. $ 10,000 Soda Inc. $ 5,000 38,750 42,250 75,250 62,500 50,000 100,000 150,000 175,000 168,500 $384,750 $492,500 $ 45,500 - 338,000 109,000 $492,500 $ 47,125 128,125…
On January 1, 2022, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Incorporated, for $459,000 cash. The acquisition - date fair value of the noncontrolling interest was $51,000. At January 1, 2022, Star's net assets had a total carrying amount of $356,000. Equipment (eight-year remaining life) was undervalued on Star's financial records by $63, 200. Any remaining excess fair value over book value was attributed to unpatented technology developed by Star (four-year remaining life), but not recorded on its books. Star recorded net income of $55,300 in 2022 and $63,200 in 2023. Each year since the acquisition, Star has declared a $15,800 dividend. At January 1, 2024, Pride's retained earnings show a $197,500 balance. Selected account balances for the two companies from their separate operations were as follows: Items Pride Star 2024 Revenues $393,500 $225,200 2024 Expenses 276, 600 154, 100 1. What is consolidated net income for 2024? 2. Assuming that…
On June 1, 2020, P Co. acquired 80% of the outstanding shares of s Co. at an amount P200,000 less than the fair value of the net assets. On this date, the carrying value of the net assets of S Co. was P1,800,000 and its fair value was P2,000,000. attributable to inventories. P Co. opted to measure NCI at fair value. Selected financial data unsold at the end of the year. Another downstream sale was made for P1,190,000 of which 30% remains unsold at the end of the year. P Co. and S Co: used the same rate of markup on The difference is are available: P Co. P7,540,000 35,000 20% of sales (both company) S Co. P4,760,000 Sales, including intra-group sales Dividends received Expenses During the year, an upstream sale was made amounting to P602,000 of which 20% remains cost: 40% for all types of sales. Required: 1. The consolidated cost of sales at the Dec 31, 2020 amounted to: 2. The Non-controlling interest at December 31, 2020 amounted to:
On January 1, 2019, Vachirawit Company acquired 80% of Metawin Company's common stock for 280,000 cash. At that date, Metawin reported common stock outstanding of 200,000 and retained earnings of 100,000 and the fair value of Metawin's assets and liabilities were equal, except for other intangible assets, which has a fair value 50,000 greater than book value and an 8- year remaining life. Metawin reported the following data for 2019 and 2020: Year Net Income Comprehensive Income Dividends Paid 2019 25,000 30,000 5,000 2020 35,000 45,000 10,000 Vachirawit reported separate net income from own operations of 100,000 and paid dividends of 30,000 for both years. What is the amount of comprehensive attributable to the controlling interest in 2020?
On January 1, 2022, Palmcroft Company acquired 100 percent of the outstanding voting shares of Salt River, Incorporated, for $776,000 cash. At January 1, 2022, Salt River’s net assets had a total carrying amount of $543,200. Equipment (eight-year remaining life) was undervalued on Salt River’s financial records by $126,000. Any remaining excess fair over book value was attributed to a database developed by Salt River (four-year remaining life), but not recorded on its books. Palmcroft applies the equity method to account for its investment in Salt River. Each year since the acquisition, Salt River has declared a $46,000 dividend. Salt River recorded net income of $111,000 in 2022 and $125,600 in 2023. Selected account balances from the two companies’ individual records were as follows: Items Palmcroft Salt River 2024 Revenues $ 554,000 $ 349,400 2024 Expenses 362,000 251,000 2024 Income from Salt River 55,950 - Retained earnings, 12/31/24 298,150 231,300 On its…
On January 1, 2019, Phoenix Co. acquired 100 percent of the outstanding voting shares of Sedona Inc. for $668,000 cash. At January 1, 2019, Sedona’s net assets had a total carrying amount of $467,600. Equipment (eight-year remaining life) was undervalued on Sedona’s financial records by $90,400. Any remaining excess fair over book value was attributed to a customer list developed by Sedona (four-year remaining life), but not recorded on its books. Phoenix applies the equity method to account for its investment in Sedona. Each year since the acquisition, Sedona has declared a $17,500 dividend. Sedona recorded net income of $93,500 in 2019 and $110,600 in 2020. Selected account balances from the two companies’ individual records were as follows: Phoenix Sedona 2021 Revenues $ 578,000 $ 362,000 2021 Expenses 375,000 270,000 2021 Income from Sedona 53,200 Retained earnings 12/31/21 317,200 215,600 On its December 31, 2021,…
On January 1, 2020, Pail Corporation acquired 80 percent of Sand Company's common stock for $540,000 cash. The fair value of the noncontrolling interest at that date was determined to be $135,000. At December 31, 2020, Pail reported on its general ledger Investment in Sand at $947000. What amount of Investment in Sand would be reported on the 12/31/20 consolidated Balance Sheet?
On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition: On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which had a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach) Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 - Total Assets 610,000 230,000 Accounts payable 110,000 30,000 Bonds…
On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition: On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach). Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 - Total Assets 610,000 230,000 Accounts payable 110,000 30,000 Bonds…
On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition: On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach). Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 - Total Assets 610,000 230,000 Accounts payable 110,000 30,000 Bonds…