On january. ..please given answer Accounting On January 1, 2020, Playtel Inc. acquired all of the stock of San Jose Cable for $250 million in cash. At the dateof acquisition, Playtel's shareholders' equity accounts were as follows (in thousands):Common stock, $1 par$5,000Additional paid-in capital 25,000Retained deficit(1,000)Treasury stock(800)Total$28,200Both companies have a December 31 year-end. At the date of acquisition, San Jose's reported net assets hadbook values approximating fair value. However, it had previously unreported indefinite-life identifiableintangibles valued at $50 million, meeting ASC Topic 805 requirements for capitalization. Impairment losses in2020 for identifiable intangibles were $1 million. Goodwill from this acquisition was not impaired in 2020. SanJose reported a net income of $4 million in 2020 and paid no dividends. Playtel uses the complete equitymethod to report its investment in San Jose on its own books.Required:a. Calculate the original amount of goodwill for this acquisition.b. Calculate equity in net income of San Jose reported on Playtel's books in 2020.

Step 1: Define GoodwillGoodwill is a type of intangible asset that is created when a company…

Answered: On January 1, 2020, Playtel Inc.…

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

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 9P

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On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a 30% corporate income tax rate. During 2019, Kittson earned net income of 67,000, and the following events occurred: 1. Cash dividends of 3 per share on 4,000 shares of common stock were declared and paid. 2. A small stock dividend was declared and issued. The dividend consisted of 600 shares of 10 par common stock. On the date of declaration, the market price of the companys common stock was 36 per share. 3. The company recalled and retired 500 shares of 100 par preferred stock. The call price was 125 per share; the stock had originally been issued for 110 per share. 4. The company discovered that it had erroneously recorded depreciation expense of 45,000 in 2018 for both financial reporting and income tax reporting. The correct depreciation for 2018 should have been 20,000. This is considered a material error. Required: 1. Prepare journal entries to record Items 1 through 4. 2. Prepare Kittsons statement of retained earnings for the year ended December 31, 2019.
Cary Corporation has 50,000 shares of 10 par common stock authorized. The following transactions took place during 2019, the first year of the corporations existence: Sold 5,000 shares of common stock for 18 per share. Issued 5,000 shares of common stock in exchange for a patent valued at 100,000. At the end of Carys first year, total contributed capital amounted to: a. 40,000 b. 90,000 c. 100,000 d. 190,000
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Matthews Co. acquired all of the common stock of Jackson Co. on January 1, 2020. As of that date, Jackson had the following trial balance: Debit Credit Accounts payable $ 60,000 Accounts receivable $ 50,000 Additional paid-in capital 60,000 Buildings (net) (20-year life) 140,000 Cash and short-term investments 70,000 Common stock 300,000 Equipment (net) (8-year life) 240,000 Intangible assets (indefinite life) 110,000 Land 90,000 Long-term liabilities (mature 12/31/19) 180,000 Retained earnings, 1/1/17 120,000 Supplies 20,000 Totals $ 720,000 $ 720,000 During 2020, Jackson reported net income of $96,000 while paying dividends of $12,000. During 2021, Jackson reported net income of…
Denden Company was organized on January 1, 2020 at which date it issued 300,000 ordinary shares of P6 par value at P13 per share. The following are the additional equity transaction occurred during the year: Profit for the year amounts to P975,000 Declared and paid cash dividends amounts to P225,000 On January 10, 2020, the Company purchased 9,000 treasury shares at P12 per share. On December 31, 2020, the Company sold 4,500 treasury shares at P8 per share and retired the remaining treasury shares. The company uses the cost method of accounting for treasury shares. What is the total shareholder’s equity on December 31, 2020?
On January 1, 2020 Psy Company purchased all the net assets of SM Ent. Company: Issuance of 20,000 unissued shares of its 10 par value ordinary share capital. As of this date, the shares of Psy were selling at 40 per share. Issuance of bonds with a face value of $300,000 but are currently at 110. A contingent payment of $200,000 cash on January 1, 2020, if the average income of SM Ent. Company during the two-year period (2020-2021) exceeds $250,000 per year. Psy estimates that there is a 20% chance or probability that the $200,000 payment will be required. Issuance of 5,000 additional shares on January 1, 2022 to the former shareholders of SM Ent. Company if the average income cover the next two years (2020-2021) equalled or exceeded $350,000. The additional 5,000 shares expected to be issued are valued at $75,000. Professional fees of $9,000 were also paid by Psy to its external auditors to finalize the business combination. As of the date of acquisition, SM Ent. Company reported…
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Tamarisk Inc. began operations in January 2020 and had the following reported net income or loss for each of its 5 years of operations:2020 $220,000 loss2021 $145,000 loss2022 $146,000 loss2023 $422,000 income2024 $1,655,000 incomeAt December 31, 2024, Tamarisk capital accounts were as follows: Common stock, par value $15 per share; authorized 200,000 sharesissued and outstanding 50,000 shares $ 750,0005% fully participating and cumulative preferred stock, par value $150 per share;authorized, issued and outstanding 10,000 shares $1,500,000 Tamarisk has never paid a cash or stock dividend. There has been no change in the capital accounts since Tamarisk began operations.QuestionAssume Tamarisk Inc. decides to pay its entire retained earnings balance in a 2024 cash dividend. Prepare computations showing the amount that will be paid to the preferred and common shareholders
On 1 July 2022, Kangeroo Ltd acquired all the issued shares of Koala Ltd, paying $60,000 cash and transferring 50,000 of its own shares to Koala Ltd's former shareholders. At that date, the financial statements of Koala Ltd showed the following information. Equity portion of Statement of Financial Position as at 1 July 2020: Share capital $50 ,000 General reserve 50 ,000 Retained earnings 80 ,000 All the assets and liabilities of Koala Ltd were recorded at amounts equal to their fair values at the acquisition date. The fair value of Kangeroo Ltd's shares at acquisition date was $3 per share. Kangeroo Ltd incurred $17,500 in acquisition-related costs that included $5,000 as share issue costs. Prepare the acquisition analysis at 1 July 2022 and the journal entries for Kangeroo Ltd to recognise the investment in Koala Ltd at 1 July 2022. and also Prepare the consolidation worksheet entries for Kangeroo Ltd's group at 1 July 2022.
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On January 1, 2021, MNO Corp. paid $200,000 for its investment in 10,000 shares of XYZ Inc. of the 200,000 total shares of stock issued by the company. The following information pertains to XYZ during 2021: Net income $400,000 Dividends declared and paid $60,000 The market price of common stock on 12/31/2021 $22 What amount would MNO Corp report in its year-end 2021 balance sheet for its investment in XYZ? $223,000. $260,000. $200,000. $180,000
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