On September 17, 2021 Ziltech inc entered into an agreement to sell one of its divisions that qualifies as a component of the entity according to generally excepted accounting principles by December 31, 2021 the companies the school year in the division had not been sold but was considered held for sale

On September 17, 2021 Ziltech inc entered into an agreement to sell one of its divisions that qualifies as a component of the entity according to generally excepted accounting principles by December 31, 2021 the companies the school year in the division had not been sold but was considered held for sale

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On January 7, 2019, Rey Co., acquired a 35% interest in Joanne Co., for P4,300,000. Rey already held a 20% interest which had been acquired for P1,600,000 which was valued at P1,800,000 at January 7, 2019. The fair value of the identifiable net assets of Joanne Co., was P8,400,000. How much is the goodwill to be recognized as a result of the business combination, assuming that NCI is measured at fair value?
On January 1, 2020, Pail Corporation acquired 75 percent of Sand Company's common stock for $525,000 cash. The fair value of the noncontrolling interest at that date was determined to be $175,000. At the date of the business combination, the book values of Sand's net assets and liabilities approximated fair value except for depreciable plant assets, which were OVERvalued by $4000 and Inventory, which was UNDERvalued by $9000 The remaining useful life of the plant assets was set at 10 years. For the year ended December 31, 2020, Pail reported Cost of Goods Sold of $14000 on its general ledger. Sand reported Cost of Goods Sold of $16000 on its general ledger. What amount of COST OF GOODS SOLD should be reported on the 12/31/20 consolidated Income Statement?
On January 1, 2021, Entity A and Entity B incorporated AB Company. The contractual agreement provided that the decisions on relevant activities will require the unanimous consent of both Entity A and Entity B, and they will have right to the net assets of AB Company. Entity A and Entity B invested P400,000 and P600,000 respectively, equivalent to 40:60 capital interest of AB Company. The financial statements of AB Company provided the following data for its two-year operation (see image below).1. How much is the balance of Investment in Joint Venture to be reported by Entity B in its Statement of Financial Position at December 31, 2022? 2. How much is the balance of Investment in Joint Venture to be reported by Entity A in its Statement of Financial Position at December 31, 2021? _______________
Parson Company acquired an 80 percent interest in Syber Company on January 1, 2020. Any portion of Syber's business fair value in excess of its corresponding book value was assigned to trademarks. This intangible asset has subsequently undergone annual amortization based on a 15-year life. Over the past two years, regular intra-entity inventory sales transpired between the two companies. No payment has yet been made on the latest transfer. All dividends are paid in the same period as declared. The individual financial statements for the two companies as well as consolidated totals for 2021 follow (credit balances indicated by parentheses): ParsonCompany SyberCompany ConsolidatedTotals Sales $ (744,000 ) $ (654,000 ) $ (1,223,000 ) Cost of goods sold 450,000 412,000 691,000 Operating expenses 104,000 107,000 213,300 Income of Syber (102,960 ) 0 0 Separate company net income $ (292,960 ) $ (135,000 )…
Cred Company’s board of directors declared a property dividend to its incorporators in the form of the company’s equipment and machinery that had a carrying amount on June 30, 2020, the date of declaration of P5,000,000. The fair value less cost to distribute of these assets on the same date amounted to P5,500,000. The date of distribution was scheduled on January 31, 2021. On December 31, 2020, the fair value less cost to distribute of the machinery and equipment was estimated at P4,800,000 and further declined on the date of distribution on January 31, 2021, at a fair value less cost to distribute of P4,300,000. - What is the amount to be recognized in profit or loss for the year ended December 31, 2020? - What is the amount to be recognized in profit or loss in 2021 for the distribution?
On September 17, 2018, Ziltech, Inc., entered into an agreement to sell one of its divisions that qualifies as a component of the entity according to generally accepted accounting principles. By December 31, 2018, the company’sfiscal year-end, the division had not yet been sold, but was considered held for sale. The net fair value (fair valueminus costs to sell) of the division’s assets at the end of the year was $11 million. The pretax income from operations of the division during 2018 was $4 million. Pretax income from continuing operations for the year totaled$14 million. The income tax rate is 40%. Ziltech reported net income for the year of $7.2 million.Required:Determine the book value of the division’s assets on December 31, 2018.
Parent Company acquires Subsidiary Company on September 30, 2020. Parent seeks an independent valuation for an item of property, plant and equipment acquired in the combination, and the valuation was not complete by the time Parent authorized for issue its financial statements for the year ended December 31, 2020. At the acquisition date, the item of property, plant and equipment had a remaining useful life of five years with no residual value.In its 2020 annual financial statements, Parent recognized a provisional fair value for the asset of P300,000. Five months after the acquisition date, Parent received the independent valuation, which estimated the asset’s acquisition-date fair value as P400,000.What is the increase in goodwill as a result of the measurement period adjustment during 2021?
On 5 June 2022, a parent entity sold inventories to a subsidiary entity for $80. The inventories had previously cost the parent entity $72. All the inventories are still held by the subsidiary at reporting date, 30 June 2022. Ignoring tax effects, the adjustment entry in the consolidation worksheet at reporting date is: a. Sales revenue O b. O C. Cost of sales Inventories Cash Sales revenue Cost of sales Inventories Sales revenue Cost of sales Inventories d. Sales revenue Cash Inventories Cost of sales Dr Ä ÄÄ Ä ÄJÄJ Cr Cr Dr Cr Dr Cr Dr Cr Cr Dr Cr Dr Cr 80 000 72 000 72 000 80 000 72 000 72 000 8 000 72 000 72 000 72 000 72 000 8 000 72 000 72 000
Cred Company’s board of directors declared a property dividend to its incorporators in the form of the company’s equipment and machinery that had a carrying amount on June 30, 2020, the date of declaration of P5,000,000. The fair value less cost to distribute of these assets on the same date amounted to P5,500,000. The date of distribution was scheduled on January 31, 2021. On December 31, 2020, the fair value less cost to distribute of the machinery and equipment was estimated at P4,800,000 and further declined on the date of distribution on January 31, 2021, at a fair value less cost to distribute of P4,300,000. - What is the carrying amount of the machinery and equipment to be distributed as property dividends on December 31, 2020? - What is the dividend payable recognized on June 30, 2020?
Placid Lake Corporation acquired 90 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2020, when Scenic had a net book value of $610,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $4,000 per year. Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $510,000. Scenic reported net income of $320,000. Placid Lake declared $200,000 in dividends during this period; Scenic paid $61,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows: Placid Lake Scenic Inventory $ 350,000 $ 111,000 Land 810,000 410,000 Equipment (net) 610,000 510,000 During 2020, intra-entity sales of $180,000 (original cost of $84,000) were made. Only 30 percent of this inventory was still held within the consolidated entity at the end of 2020. In 2021, $300,000 in intra-entity sales were made…
On July 1, 2021, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $792,400 in cash and equity securities. The remaining 30 percent of Atlanta’s shares traded closely near an average price that totaled $339,600 both before and after Truman’s acquisition. In reviewing its acquisition, Truman assigned a $125,500 fair value to a patent recently developed by Atlanta, even though it was not recorded within the financial records of the subsidiary. This patent is anticipated to have a remaining life of five years. The following financial information is available for these two companies for 2021. In addition, the subsidiary’s income was earned uniformly throughout the year. The subsidiary declared dividends quarterly. Truman Atlanta Revenues $ (768,485 ) $ (536,000 ) Operating expenses 418,000 378,000 Income of subsidiary (46,515 ) 0 Net income $ (397,000 ) $ (158,000 ) Retained earnings, 1/1/21 $…
D Question 7 Tiny Dog Company has 15,000 units of its sparkle dog collar in inventory that had a production cost of $3 per unit. These units cannot be sold through normal channels due to a failure in the collar latching mechanism. These units could be reworked at a total cost of $23,000 and sold for $28,000. Another alternative is to sell the units to a junk dealer for $8,500. The relevant cost for Tiny Dog to consider in making its decision is $45,000 of original product costs. $28,000 for selling the units to the junk dealer. O $68,000 for reworking the units. $23,000 for reworking the units. Question 8 2 pts A cost is sunk if it has already been incurred. is unavoidable. is not an incremental cost. O is irrelevant to the decision at hand.