On January 1, Year 1, Big Corporation acquired 40% interest in Small Company for $300,000. At the date of acquisition, Small Company's equity (net assets) had a book value of $550,000 and a fair value of $600,000. The difference between the book value and the fair value relates to equipment being depreciated over the remaining useful life of 10 years. During Year 1, Small Company had net income of $900,000 and paid a $40,000 dividend. Required: 3. Record the journal entry to depreciate the fair value difference 4. Determine the investment-related amounts to be reported at year-end on Big Corporation's balance sheet

Q: WebHelper Incorporated acquired 100% of the outstanding stock of Silicon Chips Corporation (SCC) for…

A: The objective of the question is to calculate the impairment loss that WebHelper should report in…

Q: On January 1, 20x3, Frietas Corporation acquired all the assets and assumed all the liabilities of…

A: Goodwill is an intangible asset that represents the excess of the purchase price of a business over…

Q: The net book value of Falcon Inc.'s property, plant, and equipment (PP&E) was $734.550 on January 1,…

A: The gain or loss on sale of fixed asset is calculated as difference between the book value and sale…

Q: During the current year, Brewer Company acquired all of the outstanding common stock of Miller…

A: Journal Entry is the primary step to record the transaction in the books of accounts.The increase in…

Q: a) Record the journal entry Jimmer Corp. recorded when they purchased Laetner's equity. b) Record…

A: Step 1 Journal is the part of book keeping.

Q: On June 28, Holly Co. acquired 100% of the common stock of Michael Co. The purchase price allocation…

A: WE WILL ONLY AMORTIZE THE INTANGIBLE ASSETS WITH DEFINITE USEFUL LIFE .  IN OUR CASE THOSE ASSETS…

Q: Pirate Corporation purchased 100 percent ownership of Ship Company on January 1, 20X5, for $279,000.…

A: Lets understand the basics.When using the equity method, the investor accounts for its investment as…

Q: P Ltd acquired 80% of S Ltd in January 20x1. In December 20x8, S Ltd sold a piece of machinery to P…

A: Consolidated statements are those statements on which two entities separate financial statements are…

Q: On January 1 of the current year, Yellow Company purchased 40% of the outstanding ordinary shares of…

A: Reported income: The investor's portion of the joint venture's earnings and losses is included in…

Q: Pirate Corporation purchased 100 percent ownership of Ship Company on January 1, 20X5, for $279,000.…

A: When using the equity method, the investor accounts for its investment as an ownership interest in…

Q: Pit Coporation owns 75% of Stop Company's outstanding common stock.  On 01/01/21, Pit sold sold a…

A: Consolidated means the combination of two firms. When two firms join together into one. For example…

Q: On January 1, Year 1, East Company purchased West Company. East Company paid $670,000 West's books…

A: Goodwill reflects non-individually identifiable or separable characteristics such as the acquired…

Q: Jacob Corporation paid $536,200 for a 30% share of Gardner Enterprises on January 1 of the current…

A: The objective of the question is to prepare the journal entries required to record the sale of the…

Q: On March 31, 2021, JISOO Company purchased 32,000 shares of the 40,000 outstanding shares of ROSE…

A: Non controlling interest is the share of minority in Holding co. It is calculated by proportionate…

Q: On January 1, Year 8, Shuswap Inc. and Kalamalka Inc. formed a new joint venture, Okanagan Inc.…

A: In a joint venture, the rewards and risks are shared. Each participant contributes resources, and…

Q: Pat Company owns 100% of the outstanding shares of common stock of Sue Company. On 1/1/20 Pat…

A: GIVEN   Company sold a building to Sue Company for $8,000,000.   At the time of the sale the…

Q: On January 1, Year 1, RAK, Inc. acquired a 25% interest in Tech Corp. for $375,000. At the date of…

A: A business becomes a shareholder or equity investor in another business when it buys shares or…

Q: Howard Corp. owned 80% of the outstanding common stock of Zest Inc. On January 1, 20X1, Howard…

A: Depreciation means the loss in value of assets because of usage of assets, passage of time or change…

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: Schooner Corporation used the following data to evaluate its current operating system. The company…

A: The static budget variance of revenue is calculated as planned sales revenue less actual sales…

Q: On January 1, 20X8, Plane Company acquired 80 percent of Scalar Company's ownership for $120,000…

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

Q: MDS, Inc. owns 100% of PH Co. On January 5 of the current year, MDS sold machinery to PH at a gain.…

A: MDs owns 100% shares of PH, so gain on sale of machinery should be excluded in the consolidated…

Q: Prime Corp acquired 90% of the outstanding ordinary share of Bee Company. On March 31, 2030, Prime…

A: Consolidation is the method where two or more companies combine together into a single business…

Q: On January 1, 2022, Kenya Company, an 80% owned subsidiary of Oliver, Inc., transferred equipment…

A: The objective of this question is to determine how the transfer of equipment from Kenya Company to…

Q: Jacob Corporation paid $536,200 for a 30% share of Gardner Enterprises on January 1 of the current…

A: Now, let's summarize the calculations:- Initial Investment: $536,200- Adjusted Net Assets:…

Q: On January 1, 2023, Bertrand Incorporated paid $70,800 for a 40% interest in Chestnut Corporation's…

A: Income from an investment refers to the earnings or returns generated by holding an asset or…

Q: On January 1, Year 1, East Company purchased West Company. East Company paid $670,000 cash and…

A: Goodwill is an intangible asset that represents the excess of the purchase price of a business over…

Q: On January 2, Year 1 Parent Company paid $1,200,000 for 100% of the voting common stock of Sub Corp.…

A: Consolidation is the process under which a company acquires ownership of two or more companies and…

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.