On January 1, 2XX1, Bargain Inc. acquired 100% of Wind Corporation for $9,750,000 cash. On that date, Willey's total stockholders' equity was $7,250,000. The following assets had fair values different from book values. Book Value Fair Value $14,500,000 250,000 6,250,000 Buildings and Land $13,500,000 Other Assets 625,000 Bonds Payable 7,500,000
Q: On January 2, year 1, ABC Company purchased 75% of XYZ's outstanding common stock. On that date, the…
A: a) In its December 31, year 1 consolidated statement of retained earnings, what amount should ABC…
Q: t of Stylus Corporation’s stock on January 2, 20X3, for $85,400 cash. Summarized balance sheet data…
A: A consolidated balance sheet refers to the form of a financial document that is prepared in order to…
Q: On January 2, year 1, ABC Company purchased 75% of XYZ's outstanding common stock. On that date, the…
A: The question is related to the Consolidation. The details are as under ABC Company Share in XYZ =…
Q: Required Prepare the [E] and [A] consolidation entries on the date of the acquisition:
A: Consolidation refers to the process of combining financial statements of multiple entities into a…
Q: Heavy Rocks Company acquires 100% of the stock of Simple Machinery Co. on January 1, 2XX0, for…
A: Consolidation is an activity in which financial statements of a parent and its subsidiary should be…
Q: Purchase Corporation purchased 60 percent of Steal Company ownership on January 1, 20X7, for…
A: The company can invest in another company. The entities generally make investments in another…
Q: Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for…
A: Consolidated statement is a financial statements of an entity with subsidiary or multiple…
Q: On January 2, Matthews Corporation acquired 20% of the outstanding common stock of Dennehy Company…
A: Solution : Cost of investment = $450,000 Net income of Dennehy = $90,000 Cash dividend paid by…
Q: Peace Company issued common shares with a par value of $58,000 and a market value of $165,300 in…
A: Extra or additional paid-in capital is not repaid to shareholders and is regarded as a permanent…
Q: On January 1, 20X0, Pepper Corporation issued 10,000 of its $15 par value shares to acquire 45…
A: Journal Entry is the primary step to record the transaction in the books of accounts. The amount…
Q: Assets Cash and receivables Inventory Land Buildings and equipment (net) Investment in Solution…
A: Problem Company and Subsidiary…
Q: Corporation used debentures with a par value of $644,000 to acquire 100 percent of Sord- On that…
A: Cash and Recievables $ 48,000Inventory $ 1,82,000Land $ 92,000Plant and…
Q: unc.4 On January 1, Allen Corporation purchased 30% of the 30,000 outstanding common shares of…
A: FV-NI, or fair value through net income, indicates that changes (gains or losses) in the fair value…
Q: Use the following information for Problems 17 through 21:On January 1, Park Corporation and Strand…
A: Consolidated Balance Sheet The consolidated balance sheet is the merger of the parent company…
Q: On January 1, 2023, Procise Corporation acquired 100 percent of the outstanding voting stock of…
A: Consolidation is an activity in which financial statements of a parent and its subsidiary should be…
Q: Cash $ 24,800 Accounts payable $ 1,891,800 Accounts receivable 102,000 Inventory 223,000…
A: Book value refers to the value which is attained by computing the difference between the total…
Q: Palm Corporation and Staple Company have announced terms of an exchange agreement under which Palm…
A: Answer:- Consolidation accounting is the procedure used to merge the financial outcomes of several…
Q: On June 10, 20X8, Private Corporation acquired 60 percent of Secret Company’s common stock. The fair…
A: Recording of consolidation entries required to prepare a consolidated balance sheet immediately…
Q: Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for…
A: The process of recording business transactions in the books of accounts for the first time is…
Q: Give the consolidation entry or entries needed to prepare a consolidated balance sheet immediately…
A: It has been given in the question that on the date of acquisition which is on December 31, 20X2 the…
Q: On January 1, 20X6, Pumpkin Corporation acquired 70 percent of Spice Company's common stock for…
A: A consolidated balance sheet refers to the financial statement that states the combined financial…
Q: 1,900,000 Plant Assets 1,100,000 1,200,000 Current Liabilities (1,000,000) (1,000,00
A: Journal entries are the initial recording of all the monetary business transactions in a systematic…
Q: Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for…
A: In the context of the given question, we are required to compute the balance of the investment…
Q: On January 1, 2023, Pantop Corporation acquired 85% of the outstanding common stock of Song Company…
A: Consolidation is an activity in which financial statements of a parent and its subsidiary should be…
Q: pany tota vill and noncontrolling interests amounts?
A: Goodwill is an important component of financial analysis, acquisitions and mergers, and determining…
Q: Use the following information for Problems 17 through 21:On January 1, Park Corporation and Strand…
A: Amount to be paid with in 1 year is to be shown under the head Current liability. So out of the…
Q: On January 1, 20X7, Phillips Corporation acquired 35 percent of the outstanding shares of Shell…
A: The equity method of accounting shows the total investment in the associate…
Q: Peanut Company acquired 90 percent of Snoopy Company’s outstanding common
A: When one company decides to takeover the another company (subsidiary company), the parent company…
Q: Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $321,300 on…
A: When an entity acquires more than 50% of the voting stock of another entity, the first mentioned…
Q: n January 1, 20X1, Como Company purchased 45% of the outstanding common shares of the Lite Company…
A: Inventory includes both raw materials used in production and finished goods that are ready for sale.…
Q: Pie Corporation acquired 75 percent of Slice Company’s common stock on December 31, 20X5, at…
A: working note: 1. Sales 214,490 Less: Cost of Goods sold (105,700)…
Q: Play Company acquired 70 percent of Screen Corporation's shares on December 31, 20X5, at underlying…
A: A consolidation worksheet is a spreadsheet that is used to create annual financial reports for a…
Q: Pie Corporation acquired 60 percent of Slice Company’s common stock on December 31, 20X5, at…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: On January 1, 20X1, Pinto Company purchased an 80% interest in Sands Inc. for $1,000,000. The equity…
A: Solution Income statement is the statement which shows companies Revenue ,expenses and profitability…
Q: On December 31, 20X8, Parkway Corporation acquired 80 percent of Street Company's common stock for…
A: A journal is a company's official book in which all business transactions which is measured in terms…
Q: Compute the amount of investment income (loss) reported by Peace from its investment in Symbol for…
A:
Q: Paste Corporation acquired 70 percent of Stick Company's stock on January 1, 20X9, for $105,000. At…
A: Consolidated Net Income: The net income (or loss) of the Borrower and its Subsidiaries on a…
Q: Required: Compute basic and diluted EPS for the consolidated entity for 20X7. (Round your…
A: The basic earning per share can be defined as the earning available to the common shareholder for a…
Q: . $5,300,000
A: The part of the profit that remains in the company after payments and dividends are made is known as…
Q: Russell Corp.'s transactions for the year ended December 31, 20X1 included the following: ·…
A: Cash flows from financing activities in cash flows statement shows the inflows and outflows of…
Q: Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for…
A: Acquisition of Company: - Acquisition of Company refers to when one company purchases or acquires…
Q: On January 1, 20X6, Plus Corporation acquired 90 percent of Side Corporation for $180,000 cash. Side…
A: Investment is the allocation of resources, generally money, with the goal of earning profit or…
Q: Required: Determine the amount Planter Corporation would record as a gain on bargain purchase and…
A: A bargain purchase gain occurs when a company acquires assets at a cost lower than their fair market…
Q: On January 1, 20X3, Guild Corporation reported total assets of P470,000, liabilities of P270,000,…
A: In case one company overtake the assets and liabilities of another company , then accounting for…
Q: Trim Corporation acquired 100 percent of Round Corporation's voting common stock on January 1, 20X2,…
A: When a company is acquired by another company many journal entries are recorded in the books of both…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- On May 1, Burns Corporation acquired 100 percent of the outstanding ownership shares of Quigley Corporation in exchange for $728,000 cash. At the acquisition date, Quigley's book and fair values were as follows: Cash Receivables Inventory Land Building and equipment (net) Patented technology Total assets Accounts payable Long-term liabilities Common stock ($5 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders equity Total assets Assets Book Value $ 112,000 $ 218,000 232,000 $ 177,000 323,000 0 $1,062,000 $ 162,500 $ 638,000 210,000 90,000 (38,500) $1,062,000 Burns directs Quigley to seek additional financing for expansion through a new long-term debt issue. Consequently, Quigley will issue a set of financial statements separate from that of its new parent to support its request for debt and accompanying regulatory filings. Quigley elects to apply pushdown accounting in order to show recent fair valuations for its assets. Prepare a separate…On January 1, 20X3, Guild Corporation reported total assets of P470,000, liabilities of P270,000, and stockholders’ equity of P200,000. At that date, Bristol Corporation reported total assets of P190,000, liabilities of P135,000, and stockholders’ equity of P55,000. Following lengthy negotiations, Guild paid Bristol’s existing shareholders P44,000 in cash for 80 percent of the voting common shares of Bristol. Immediately after Guild purchased the Bristol shares, What amount of stockholders’ equity was reported in the consolidated balance sheet? 255,000 244,000 211,000Peace Company issued common shares with a par value of $59,000 and a market value of $159,300 in exchange for 30 percent ownership of Symbol Corporation on January 1, 20X2. Symbol reported the following balances on that date: Assets Cash Accounts Receivable Inventory (FIFO basis) Land Buildings & Equipment SYMBOL CORPORATION Balance Sheet January 1, 20X2 Book Value Fair Value $ 57,000 86,000 137,000 $ 57,000 86,000 167,000 59,000 74,000 505,000 328,000 (245,000) 33,000 Less: Accumulated Depreciation Patent Total Assets Liabilities & Equities Accounts Payable Bonds Payable Common Stock Additional Paid-In Capital Retained Earnings Total Liabilities & Equities $ 599,000 $ 745,000 $ 22,000 192,000 137,000 11,000 237,000 $ 599,000 $ 22,000 192,000 The estimated economic life of the patents held by Symbol is 4 years. The buildings and equipment are expected to last 6 more years on average. Symbol paid dividends of $15,000 during 20X2 and reported net income of $87,000 for the year. Required:…
- Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $98,000. At that date, the fair value of the noncontrolling interest was $42,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Phone Corporation Smart Corporation Cash $ 52,300 $ 39,000 Accounts Receivable 99,000 59,000 Inventory 136,000 92,000 Land 66,000 49,000 Buildings & Equipment 417,000 268,000 Less: Accumulated Depreciation (151,000) (73,000) Investment in Smart Corporation 98,000 Total Assets $ 717,300 $ 434,000 Accounts Payable $ 141,500 $ 27,000 Mortgage Payable 300,800 288,000 Common Stock 72,000 40,000 Retained Earnings 203,000 79,000 Total Liabilities & Stockholders’ Equity $ 717,300 $ 434,000 At the date of the business combination, the book values of Smart’s assets and liabilities approximated fair value except for inventory, which had a fair value of…Palm Corporation and Staple Company have announced terms of an exchange agreement under which Palm will issue 8,500 shares of its $15 par value common stock to acquire all of Staple Company’s assets. Palm shares currently are trading at $59, and Staple $10 par value shares are trading at $23 each. Historical cost and fair value balance sheet data on January 1, 20X2, are as follows: Palm Corporation Staple Company Balance Sheet Item Book Value Fair Value Book Value Fair Value Assets Cash & Receivables $ 151,000 $ 151,000 $ 46,000 $ 46,000 Land 110,000 190,000 57,000 83,000 Buildings & Equipment (net) 313,000 411,000 176,000 230,000 Total Assets $ 574,000 $ 752,000 $ 279,000 $ 359,000 Equities Common Stock $ 200,000 $ 81,000 Additional Paid-In Capital 18,000 9,900 Retained Earnings…Peace Computer Corporation acquired 75 percent of Symbol Software Company’s stock on January 2, 20X3, by issuing bonds with a par value of $85,250 and a fair value of $102,750 in exchange for the shares. Summarized balance sheet data presented for the companies just before the acquisition follow: Peace Computer Corporation Symbol Software Company Book Value Fair Value Book Value Fair Value Cash $ 216,000 $ 216,000 $ 62,000 $ 62,000 Other Assets 406,000 406,000 137,000 137,000 Total Debits $ 622,000 $ 199,000 Current Liabilities $ 82,000 82,000 $ 62,000 62,000 Common Stock 290,000 62,000 Retained Earnings 250,000 75,000 Total Credits $ 622,000 $ 199,000 Required: Prepare a consolidated balance sheet immediately following the acquisition.
- On May 1, Burns Corporation acquired 100 percent of the outstanding ownership shares of Quigley Corporation in exchange for $733,000 cash. At the acquisition date, Quigley's book and fair values were as follows: Cash Receivables Inventory Land Building and equipment (net) Patented technology Total assets Accounts payable Long-term liabilities Common stock ($5 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders equity Total assets Book Value Fair Value $ 101,000 $ 101,000 229,000 229,000 254,000 323,000 157,500 118,500 330,000 409,000 0 220,000 Assets $1,071,500 $ 1,400,500 $ 146,000 $ 666,000 210,000 90,000 (40,500) $1,071,500 Burns directs Quigley to seek additional financing for expansion through a new long-term debt issue. Consequently, Quigley will issue a set of financial statements separate from that of its new parent to support its request for debt and accompanying regulatory filings. Quigley elects to apply pushdown accounting in order to…On January 1, 20x1, ABC Corporation purchased all of XYZ Corporation's common stock for $1,200,000. On that date, the fair values of XYZ's assets and liabilities equaled their carrying amounts of $1,320,000 and $320,000, respectively. During year 1, XYZ paid cash dividends of $20,000. Selected information from the separate balance sheets and income statements of ABC and XYZ as of December 31, year 1, and for the year then ended follows: ABC Corporation (Column 1), XYZ Corporation (Column 2) In ABC's December 31, year 1 consolidated balance sheet, what amount should be reported as total retained earnings?On January 1, 20X5, Power Company purchases 80% of the outstanding shares of the Spencer Company for $2,500,000 in cash. On that date, Spencer Company had No Par Common Stock of $2,000,000 and Retained Earnings of $1,000,000. On January 1, 20X5, all of Spencer's identifiable assets and liabilities had fair values that were equal to their carrying values except for: • A building that had an estimated FV of $600,000 less that its carrying value; its remaining useful life was estimated to be 10 years; and • A long-term liability with a FV of $500,000 less than its carrying value; the liability matures on December 31, 20X12. Continue the case of Power Company in the 20X10. Assume that there are no intercompany transactions, no dividends, and no Goodwill impairment since acquisition. Profits for 20X10 were S1,000,000 (Power) and $950,000 (Spencer). The balance of RE as of December 31, 20X10 was S3,000,000 (Power) and S2,600,000 (Spencer). What amount would Power report as Profit for the…
- Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $310,500 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $345,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, follow: Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Cost of Goods Sold Depreciation Expense Selling & Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Snoopy Company Total Peanut Company Debit $ 174,000 181,000 211,000 353,700 206,000 707,000 187,000 41,000 220,000 89.000 $2,369,700 Credit $450,000 63,000 188,000 492,000 313,900 789,000 73.800 $2,369,700 Snoopy Company Debit $ 87,000 82,000 76,000 95,000 188,000 120,000 9,000 27,000 34,000 $718,000 Credit $18,000 48,000 69,000 196,000 149,000 238,000 0 $718,000 Required: a. Prepare any equity…On January 1, 20X1, Cleo Company purchased an 80% interest in Sai Inc. for $1,000,000. The equity balances of Sai at the time of the purchase were as follows: Common stock ($10 par) $100,000 Paid-in capital in excess of par 400,000 Retained earnings 500,000 Any excess of cost over book value is attributable to goodwill. No dividends were paid by either firm during 20X6. The following trial balances were prepared for CLeo Company and its subsidiary, Sai Inc., on December 31, 20X6: Pinto Sands Cash 120,000 70,000 Accounts receivable 240,000 197,000 Inventory 200,000 176,000 Land 600,000 180,000 Buildings and equipment 1,100,000 800,000 Accumulated depreciation (180,000) (120,000) Investment in Sands 1,000,000 Accounts payable (110,000) (50,000) Common stock, $10 par (800,000) (100,000) Paid-in capital in excess of par…Peanut Company acquired 100 percent of Snoopy Company’s outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy’s net assets was equal to $300,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, are as follows: Peanut Company Snoopy Company Debit Credit Debit Credit Cash $ 130,000 $ 80,000 Accounts Receivable 165,000 65,000 Inventory 200,000 75,000 Investment in Snoopy Company 355,000 0 Land 200,000 100,000 Buildings and Equipment 700,000 200,000 Cost of Goods Sold 200,000 125,000 Depreciation Expense 50,000 10,000 Selling and Administrative Expense 225,000 40,000 Dividends Declared 100,000 20,000 Accumulated Depreciation $ 450,000 $ 20,000 Accounts Payable 75,000 60,000 Bonds Payable 200,000 85,000 Common Stock 500,000 200,000 Retained Earnings 225,000 100,000 Sales 800,000…