mns On January 1, 2024, Jay Company acquired all the outstanding ownership shares of Zee Company. In assessing Zee's acquisition-date fair values, Jay concluded that the carrying value of Zee's long-term debt (eight-year remaining life) was less than its fair value by $20,000. At December 31, 2024, Zee Company's accounts show interest expense of $14,400 and long-term debt of $360,000. What amounts of interest expense andlong-term debt should appear on the December 31, 2024, consolidated financial statements of Jay and its subsidiary Zee?Interestexpense$ 16,900Long-term debt$ 380,000Itema.b.$ 16,900$ 377,500C.$ 11,900$ 380,000d.$ 11,900$ 377,500Multiple Choice○ Option C○ Option DOption B○ Option A

Step 1: Calculate the amortization of the fair value adjustmentThe fair value adjustment is…

Answered: On January 1, 2024, Jay Company…

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

Chapter12: Intangibles

Section: Chapter Questions

Problem 18E

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On January 1, 2018, Jay Company acquired all the outstanding ownership shares of Zee Company. In assessing Zee’s acquisition-date fair values, Jay concluded that the carrying value of Zee’s long-term debt (8-year remaining life) was less than its fair value by $20,000. At December 31, 2018, Zee Company’s accounts show interest expense of $12,000 and long-term debt of $250,000. What amounts of interest expense and long-term debt should appear on the December 31, 2018, consolidated financial statements of Jay and its subsidiary Zee?
On January 1, 2021, Jay Company acquired all the outstanding ownership shares of Zee Company. In assessing Zee’s acquisition-date fair values, Jay concluded that the carrying value of Zee’s long-term debt (8-year remaining life) was less than its fair value by $23,200. At December 31, 2021, Zee Company’s accounts show interest expense of $14,400 and long-term debt of $400,000. What amounts of interest expense and long-term debt should appear on the December 31, 2021, consolidated financial statements of Jay and its subsidiary Zee? Interest expense Long-term debt a. $17,300 $423,200 b. $17,300 $420,300 c. $11,500 $423,200 d. $11,500 $420,300 Option A Option B Option C Option D
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On June 30, 2020, Cape Company purchased 25% of the outstanding ordinary shares of Bit Co. at a total cost of P2,100,000. The book value of Bit Co.’s net assets on acquisition date was P7,200,000. For the following reasons, Cape was willing to pay more than book value for Bit Co. stock: Bit Co. has depreciable assets with a current fair value of P180,000 more than their book value. These assets have a remaining useful life of 10 years. Bit co. owns a tract of land with a current fair value of P900,000 more than its carrying amount. All other identifiable tangible and intangible assets of Bit Co. have current fair values that are equal to their carrying amounts. Bit reported net income of P1,620,000, earned evenly during the current year ended December 31, 2020. Also in the current year, it declared and paid cash dividends of P315,000 to its ordinary shareholders. Market value of Bit Co.’s ordinary shares at December 31, 2020 is P9 million. Cape Company’s financial year-end…
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