On January 1, 2023, Palka, Incorporated, acquired 70 percent of the outstanding shares of Sellinger Company for $1,328,600 in cash.The price paid was proportionate to Sellinger's total fair value, although at the acquisition date, Sellinger had a total book value of$1,660,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaininglife) that was undervalued on Sellinger's accounting records by $228,000. On January 1, 2024, Palka acquired an additional 25percent common stock equity interest in Sellinger Company for $510,000 in cash. On its internal records, Palka uses the equitymethod to account for its shares of Sellinger.During the two years following the acquisition, Sellinger reported the following net income and dividends:ItemsNet incomeDividends declared.Required:a. Show Palka's journal entry to record its January 1, 2024, acquisition of an additional 25 percent ownership of Sellinger Companyshares.b. Prepare a schedule showing Palka's December 31, 2024, equity method balance for its Investment in Sellinger account.Required A Required BComplete this question by entering your answers in the tabs below.View transaction list2023$ 470,000190,000Show Palka's journal entry to record its January 1, 2024, acquisition of an additional 25 percent ownership of Sellinger Company shares.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.< 1Journal entry worksheet2024$ 580,000220,000Record the acquisition of an additional 25 percent ownership of SellingerCompany shares.Note: Enter debits before credits.DateJanuary 01, 2024Record entryRequired A Required BGeneral JournalClear entry< Required AInitial value for acquisitionAdjusted subsidiary net income 2023Subsidiary dividends 2023Adjusted fair value of newly acquired sharesAdjusted subsidiary 2024 net incomeSubsidiary dividends 2024Investment in Sellinger 12/31/24DebitCreditComplete this question by entering your answers in the tabs below.< Required AView general JournalRequired B >Prepare a schedule showing Palka's December 31, 2024, equity method balance for its Investment in Sellinger account.Note: Amounts to be deducted should be indicated with a minus sign.Required B >

The business unit procures additional business for the purpose of diversifying its commercial…

On January 1, 2023, Palka, Incorporated, acquired 70 percent of the outstanding shares of Sellinger Company for $1,328,600 in cash The price paid was proportionate to Sellinger's total fair value, although at the acquisition date, Sellinger had a total book value of $1,660,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger's accounting records by $228,000. On January 1, 2024, Palka acquired an additional 25 percent common stock equity interest in Sellinger Company for $510,000 in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger. During the two years following the acquisition, Sellinger reported the following net income and dividends: Items Net income Dividends declared 2023 $ 470,000 190,000 $ 2024 580,000 220,000 Required: a. Show Palka's journal entry to record its January 1, 2024, acquisition of an additional 25 percent ownership of Sellinger Company shares. b. Prepare a schedule showing Palka's December 31, 2024, equity method balance for its Investment in Sellinger account.

On January 1, 2023, Palka, Incorporated, acquired 70 percent of the outstanding shares of Sellinger Company for $1,328,600 in cash The price paid was proportionate to Sellinger's total fair value, although at the acquisition date, Sellinger had a total book value of $1,660,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger's accounting records by $228,000. On January 1, 2024, Palka acquired an additional 25 percent common stock equity interest in Sellinger Company for $510,000 in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger. During the two years following the acquisition, Sellinger reported the following net income and dividends: Items Net income Dividends declared 2023 $ 470,000 190,000 $ 2024 580,000 220,000 Required: a. Show Palka's journal entry to record its January 1, 2024, acquisition of an additional 25 percent ownership of Sellinger Company shares. b. Prepare a schedule showing Palka's December 31, 2024, equity method balance for its Investment in Sellinger account.

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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