Pine Corp is considering acquiring Beta Company. Beta's balance sheet at December 31, 2023, shows: Assets: Cash: $80,000 Accounts receivable: $120,000 Inventory: $150,000 Equipment (net): $450,000 Total: $800,000 Liabilities and Equity: Current liabilities: $100,000 Long-term debt: $200,000 Common stock: $300,000 Retained earnings: $200,000 Total: $800,000 Additional information: 1. Accounts receivable requires a $6,000 allowance for doubtful accounts 2. Inventory using FIFO would be $180,000 (currently using LIFO) 3. Equipment fair value is $520,000 4. Unrecorded trademark worth $90,000 5. All liabilities are at fair value 6. Purchase price is $1,100,000

Pine Corp is considering acquiring Beta Company. Beta's balance sheet at December 31, 2023, shows: Assets: Cash: $80,000 Accounts receivable: $120,000 Inventory: $150,000 Equipment (net): $450,000 Total: $800,000 Liabilities and Equity: Current liabilities: $100,000 Long-term debt: $200,000 Common stock: $300,000 Retained earnings: $200,000 Total: $800,000 Additional information: 1. Accounts receivable requires a $6,000 allowance for doubtful accounts 2. Inventory using FIFO would be $180,000 (currently using LIFO) 3. Equipment fair value is $520,000 4. Unrecorded trademark worth $90,000 5. All liabilities are at fair value 6. Purchase price is $1,100,000

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

Chapter21: The Statement Of Cash Flows

Section: Chapter Questions

Problem 13P: Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and...

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Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and 2018, and the statement of income and retained earnings for the year ended December 31, 2019: Additional information: a. On January 2, 2019, Farrell sold equipment costing 45,000, with a book value of 24,000, for 19,000 cash. b. On April 2, 2019, Farrell issued 1, 000 shares of common stock for 23,000 cash. c. On May 14, 2019, Farrell sold all of its treasury stock for 25,000 cash. d. On June 1, 2019, Farrell paid 50, 000 to retire bonds with a face value (and book value) of 50, 000. e. On July 2, 2019, Farrell purchased equipment for 63, 000 cash. f. On December 31, 2019, land with a fair market value of 150,000 was purchased through the issuance of a long-term note in the amount of 150,000. The note bears interest at the rate of 15% and is due on December 31, 2021. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2019, based on the preceding information. 2. Prepare the statement of cash flows. (Appendix 21.1) Spreadsheet and Statement Refer to the information for Farrell Corporation in P21-13. Required: 1. Using the direct method for operating cash flows, prepare a spreadsheet to support a 2019 statement of cash flows. (Hint: Combine the income statement and December 31, 2019, balance sheet items for the adjusted trial balance. Use a retained earnings balance of 291,000 in this adjusted trial balance.) 2. Prepare the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.)
Birch Company is considering purchasing EKC Company. EKC's balance sheet at December 31, 2019, is as follows: Cash $51,000 Current liabilities $56,000 Accounts receivable 76,000 Bonds payable 194,000 Inventory 130,000 Common stock 290,000 Property, plant, and equipment (net) 630,000 Retained earnings 347,000 $887,000 $887,000 At December 31, 2019, Birch discovered the following about EKC: No allowance for uncollectible accounts has been established. An allowance of $5,200 is considered appropriate. The LIFO inventory method has been used. The FIFO inventory method would be used if EKC were purchased by Birch. The FIFO inventory valuation of the December 31, 2019, ending inventory would be $181,000. The fair value of the property, plant, and equipment (net) is $780,000. The company has an unrecorded patent that is worth $100,000. The book values of the current liabilities and bonds payable are the same as their market values. Required: 1. Compute the value…
Find the Gross fixed assets and Accumulated depreciation
The comparative balance sheets for Swifty Corporation show the following information. December 31 2020 $33,500 2019 $12,900 Cash Accounts receivable 12,400 10,000 Inventory 12,100 9,000 Available-for-sale debt investments -0- 3,000 Buildings -0- 29,800 Equipment 44,800 19,900 Patents 5,000 6,300 $90,900 $107,800 Allowance for doubtful accounts $3,100 $4,500 Accumulated depreciation-equipment 2,000 4,500 Accumulated depreciation-building -0- 6,000 Accounts payable 5,000 3,000 Dividends payable Notes payable, short-term (nontrade) -0- 4,900 3,000 4,100 Long-term notes payable 31,000 25,000 Common stock 43,000 33,000 Retained earnings 20,700 $107,800 5,900 $90,900 Additional data related to 2020 are as follows. Equipment that had cost $11,000 and was 40% depreciated at time of disposal was sold for $2,500. $10,000 of the long-term note payable was paid by issuing common stock. Cash dividends paid were $4,900. On January 1, 2020, the building was completely destroyed by a flood. Insurance…
Goodwill Valman Company is considering purchasing EKC Company. EKC's balance sheet at December 31, 2019, is as follows: Cash $54,000 Current liabilities $64,000 Accounts receivable 65,000 Bonds payable 219,000 Inventory 140,000 Common stock 350,000 Property, plant, and equipment (net) 600,000 Retained earnings 226,000 $859,000 $859,000 At December 31, 2019, Valman discovered the following about EKC: No allowance for uncollectible accounts has been established. An allowance of $4,500 is considered appropriate. The LIFO inventory method has been used. The FIFO inventory method would be used if EKC were purchased by Valman. The FIFO inventory valuation of the December 31, 2019, ending inventory would be $204,000. The fair value of the property, plant, and equipment (net) is $720,000. The company has an unrecorded patent that is worth $100,000. The book values of the current liabilities and bonds payable are the same as their market values. Required: 1.…
C. Reither Co. reports the following information for 2025: sales revenue $700,000, cost of goods sold $500,000, operating expenses $80,000, and an unrealized holding loss on available-for-sale debt securities for 2025 of $60,000. It declared and paid a cash dividend of $10,000 in 2025, C. Reither Co. has January 1, 2025, balances in common stock $350,000; accumulated other comprehensive income $80,000; and retained earnings $90,000. It issued no stock during 2025. Prepare a statement of stockholders' equity. (Ignore income taxes.) Total C. REITHER CO. Statement of Stockholders' Equity $ Retained Earnings Accumulated Other Comprehensive Income Ih
WAG PAPALOKO Inc. has the following balance sheet on January 1, 2018, which is the date of acquisition: Assets Liabilities and Equity Accounts Receivable 79,000 Current Liabilities 145,000 Inventory 112,000 Long-term notes 100,000 Other current assets 55,000 Ordinary share, P1 par 50,000 Equipment (net) 294,000 Share premium 200,000 Goodwill 30,000 Retained earnings 75,000 Total assets 570,000 Total liabilities and equity 570,000 On January 1, 2018, WAG PAPATINAG Corp. acquired the net assets of WAG PAPALOKO Inc. by issuing 7,000 shares of its P25 par value common stock. Subsequently, WAG PAPALOKO Inc. was liquidated and its assets and liabilities merged into WAG PAPATINAG Corp. WAG PAPATINAG Corp. and WAG PAPALOKO Inc. stocks were selling for P40 per share and P6 per share, respectively on January 1, 2018. The book values of WAG PAPALOKO Inc.’s identifiable assets and liabilities equaled their…
On January 1, 2020, Jack and Jill Companies had condensed balance sheets as shown below: Jack Jill Company Company Current Assets $1,000,000 $ 500,000 Plant and Equipment (Net) 1,500,000 900,000 $2,500,000 $1,400,000 Current Liabilities $ 200,000 $ 175,000 Long-Term Debt 300,000 200,000 Common Stock, $5 par 1,400,000 400,000 Paid-in Capital in Excess of Par 0 125,000 Retained Earnings 600,000 500,000 $2,500,000 $1,400,000 Required: Record the acquisition of Jill’s net assets, the issuance of the stock and/or payment of cash, and payment of the related costs. Assume that Jack issued 15,000 shares of new common stock with a fair value of $15 per share and paid $400,000 cash for all of the net assets of Jill. Acquisition costs of $25,000 and stock issuance costs of $10,000 were paid in cash. Current assets had a fair value of $525,000, plant and equipment had a fair…
On January 1, 2020, Jack and Jill Companies had condensed balance sheets as shown below: Jack Jill Company Company Current Assets $1,000,000 $ 500,000 Plant and Equipment (Net) 1,500,000 900,000 $2,500,000 $1,400,000 Current Liabilities $ 200,000 $ 175,000 Long-Term Debt 300,000 200,000 Common Stock, $5 par 1,400,000 400,000 Paid-in Capital in Excess of Par 0 125,000 Retained Earnings 600,000 500,000 $2,500,000 $1,400,000 Required: Record the acquisition of Jill’s net assets, the issuance of the stock and/or payment of cash, and payment of the related costs. Assume that Jack issued 60,000 shares of new common stock with a fair value of $15 per share and paid $400,000 cash for all of the net assets of Jill. Acquisition costs of $25,000 and stock issuance costs of $10,000 were paid in cash. Current assets had a fair value of $525,000, plant and equipment had a fair value…
C. Reither Co. reports the following information for 2025: sales revenue $700,000 cost of goodssold $500,000, operating expenses $80,000, and an unreliazed holding loss on available-for-sale debt securities of 2025 of $60,000. It declared and paid a cash dividend of $10,000 in 2025. C. Reither Co. has Janaury 1, 2025, balances in common stock $350,000; accumulated other comprehensive income $80,000; and retained earnings $90,000. It issued no stock during 2025. Prepare a statement of stockholders' equity. (Ignore income taxes).
C. Reither Co. reports the following information for 2025: sales revenue $700,000 cost of goodssold $500,000, operating expenses $80,000, and an unreliazed holding loss on available-for-sale debt securities of 2025 of $60,000. It declared and paid a cash dividend of $10,000 in 2025. C. Reither Co. has Janaury 1, 2025, balances in common stock $350,000; accumulated other comprehensive income $80,000; and retained earnings $90,000. It issued no stock during 2025. Prepare a statement of stockholders' equity. (Ignore income taxes).
Presented below is the balance sheet of Sargent Corporation for the current year, 2020. Sargent CorporationBalance SheetDecember 31, 2020 Current assets $ 485,000 Current liabilities $ 380,000 Investments 640,000 Long-term liabilities 1,000,000 Property, plant, and equipment 1,720,000 Stockholders' equity 1,770,000 Intangible assets 305,000 $3,150,000 $3,150,000 The following information is presented. 1. The current assets section includes cash $150,000, accounts receivable $170,000 less $10,000 for allowance for doubtful accounts, inventories $180,000, and unearned rent revenue $5,000. Inventory is stated on the lower-of-FIFO-cost-or-net realizable value. 2. The investments section includes the cash surrender value of a life insurance contract $40,000; investments in common stock, short-term $80,000 and long-term $270,000; and bond sinking fund $250,000. The cost and fair value of investments in common stock are the same. 3.…