Please avoid solutions image based thanx Problem 5-11 (Static) (LO 5-2, 5-3, 5-5, 5-7)On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration.The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessedequipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developedseveral secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez'sfinancial records, were estimated to have a 20-year future life.As of December 31, the financial statements appeared as follows:ItemsRevenuesCost of goods soldExpensesNet incomeRetained earnings, 1/1Net incomeDividends declaredRetained earnings, 12/31Cash and receivablesInventoryInvestment in SuarezEquipment (net)Total assetsLiabilitiesCommon stockRetained earnings, 12/31Total liabilities and equitiesJarel$ (300,000)140,00020,000$ (140,000)$ (300,000)(140,000)$ (440,000)$ 210,000150,000260,000440,000$ 1,060,0008$ (420,000)(200,000)(440,000)(1,060,000)a. Revenuesb. Cost of goods soldc. Expensesd. Noncontrolling interest appearing on the balance sheete. Equipment (net)f. Inventory< Prev 10 of 15Suarez$ (200,000)80,00010,000$ (110,000)$ (150,000)(110,000)$ (260,000)$ 90,000110,0000300,000$ 500,000Required:Included in the preceding statements, Jarel sold inventory costing $80,000 to Suarez for $100,000. Of these goods,Suarez still owns 60 percent on December 31. Compute the following amounts for the December 31 consolidatedfinancial statements for Jarel and Suarez.Note: Input all amounts as positive value.$ (140,000)(100,000)(260,000)$ (500,000)ConsolidatedAmountNext >

Consolidation is an activity in which financial statements of a parent and its subsidiary should be…

On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez's financial records, were estimated to have a 20-year future life.

On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez's financial records, were estimated to have a 20-year future life.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 35P

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Use the following data for Problems 10–15:On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez’s financial records, were estimated to have a 20-year future life.As of December 31, the financial statements appeared as follows:Included in the above statements, Jarel sold inventory costing $80,000 to Suarez for $100,000. Of these goods, Suarez still owns 60 percent on December 31.What is the total of consolidated expenses?a. $30,000b. $36,000c. $37,500d. $39,000
Use the following data for Problems 10–15:On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez’s financial records, were estimated to have a 20-year future life.As of December 31, the financial statements appeared as follows:Included in the above statements, Jarel sold inventory costing $80,000 to Suarez for $100,000. Of these goods, Suarez still owns 60 percent on December 31.What is the consolidated total for equipment (net) at December 31?a. $735,000.b. $740,000.c. $760,000.d. $765,000.
Use the following data for Problems 10–15:On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez’s financial records, were estimated to have a 20-year future life.As of December 31, the financial statements appeared as follows:Included in the above statements, Jarel sold inventory costing $80,000 to Suarez for $100,000. Of these goods, Suarez still owns 60 percent on December 31.What is the consolidated total for inventory at December 31?a. $240,000b. $248,000c. $250,000d. $260,000
Use the following data for Problems 10–15:On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez’s financial records, were estimated to have a 20-year future life.As of December 31, the financial statements appeared as follows:Included in the above statements, Jarel sold inventory costing $80,000 to Suarez for $100,000. Of these goods, Suarez still owns 60 percent on December 31.What is the consolidated total of noncontrolling interest appearing on the balance sheet?a. $85,500b. $83,100c. $87,000d. $70,500
Use the following data for Problems 10–15:On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez’s financial records, were estimated to have a 20-year future life.As of December 31, the financial statements appeared as follows:Included in the above statements, Jarel sold inventory costing $80,000 to Suarez for $100,000. Of these goods, Suarez still owns 60 percent on December 31.What is the total of consolidated cost of goods sold?a. $140,000b. $152,000c. $132,000d. $145,000
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(Use the data below for Questions 7-17.) Company Pacquires 80% of Company S for $600,000 on 1/1/19. P did not pay a "control premium" for the acquisition. On that date, S reported common stock of $200,000 and retained earnings of $250,000. In addition, the fair value of S's buildings (14-year remaining life) was higher than their carrying value by $70,000. All other assets and liabilities have fair value equal to carrying value. P uses the partial equity method to record its investment in S. Below are some data taken from accounting records of the year 2020 (the second year). P's own operating income, 2020: $540,000 S's net income, 2020 $180,000 S's retained earnings at 1/1/20: $340,000 S's dividends declared, 2020: $120,000 Provide the following figures: 7. NCI in net assets (i.e., NCI's fair value) at the acquisition date: 8. Goodwill at the acquisition date: 9. Consolidated net income, 2020: 10. NCI in net income, 2020: 11. P's net income, 2020: 12. P's "Investment in S", 12/31/20:…
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7. On January 1, ABC Acquired 60 percent of the outstanding voting stock of XYZ for P301,500 cash consideration. The remaining 40 percent of XYZ had an acquisition date fair value of P138,500. On January 1, XYZ possessed equipment (5-year life) that was undervalued on its books P25,000. XYZ also had developed several secret formulas that ABC assessed at P50,000. Theses formulas, although not recorded on XYZ's financial records, were estimated to have a 20-year future life. ABC also determined that the inventory of XYZ is overvalued by P10,000. 80% of these inventories remain unsold by the end of the year. As an independent case, assume that the goodwill is impaired by P5,000 by December 31, determine the net income/(net loss) attributable to the controlling interest. As of December 31, the financial statements appeared as follows:
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1. On January 1, 2018, Koehn Company bought 25% outstanding ordinary shares of Cosby Company for P1 million. The book value of the net asset acquired was P3 million. The difference was attributable to the fair value of Cosby's machinery exceeding book value. The machinery has a remaining life of 10 years. 0n January 3, 2018, Koehn Company sold an equipment costing P600,000 to Cosby Company for P800,000. The equipment has a remaining life of five years. In 2018, Cosby Company reported net income of P1,000,000. Cash dividends of P100,000 were declared and paid by Cosby Company on December 31, 2018. How much is the carrying amount of the investment in associate on December 31, 2018?