Problem 4-27 (Static) (LO 4-10) Posada Company acquired 7,000 of the 10,000 outstanding shares of Sabathia Company on January 1, 2022, for $840,000. The subsidiary's total fair value was assessed at $1,200,000 although its book value on that date was $1,130,000. The $70,000 fair value in excess of Sabathia's book value was assigned to a patent with a five-year remaining life. On January 1, 2024, Posada reported a $1,085,000 equity method balance in the Investment in Sabathia Company account. On October 1, 2024, Posada sells 1,000 shares of the investment for $191,000. During 2024, Sabathia reported net income of $120,000 and declared dividends of $40,000. These amounts are assumed to have occurred evenly throughout the year. Required: a. How should Posada report the 2024 income that accrued to the 1,000 shares prior to their sale? b. What is the effect on Posada's financial statements from this sale of 1,000 shares? a. b. Answer is not complete. Posada's income for shares sold Credit to Posada's additional paid-in capital

Problem 4-27 (Static) (LO 4-10) Posada Company acquired 7,000 of the 10,000 outstanding shares of Sabathia Company on January 1, 2022, for $840,000. The subsidiary's total fair value was assessed at $1,200,000 although its book value on that date was $1,130,000. The $70,000 fair value in excess of Sabathia's book value was assigned to a patent with a five-year remaining life. On January 1, 2024, Posada reported a $1,085,000 equity method balance in the Investment in Sabathia Company account. On October 1, 2024, Posada sells 1,000 shares of the investment for $191,000. During 2024, Sabathia reported net income of $120,000 and declared dividends of $40,000. These amounts are assumed to have occurred evenly throughout the year. Required: a. How should Posada report the 2024 income that accrued to the 1,000 shares prior to their sale? b. What is the effect on Posada's financial statements from this sale of 1,000 shares? a. b. Answer is not complete. Posada's income for shares sold Credit to Posada's additional paid-in capital

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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7 On January 1, 2018, WONG NOODLES Corporation acquired the net assets of Natasha, Inc., by issuing 600,000 shares of its P10 par value common stock. Subsequently, Natasha was liquidated and its assets and liabilities merged into WONG NOODLES Corporation. WONG NOODLES’ stock was selling for P50 per share on January 1, 2018. The amount of goodwill recorded by WONG NOODLES in connection with the combination was P6,120,000. WONG NOODLES incurred P300,000 of legal and broker’s fees associated with the combination and P30,000 of stock issuance costs. What is the (1) fair value of Natasha’s net assets and (2) the amount of the increase in WONG NOODLES’ stockholders equity as a result of the combination? Group of answer choices (1) 24,180,000; (2) 29,970,000 (1) 23,880,000; (2) 30,000,000 (1) 24,180,000; (2) 30,000,000 (1) 23,880,000; (2) 29,970,000
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On Jan 1, 20X1, Ouyang Inc paid $1,000,000 to acquire 70% of Huang Inc when Huang's BV was $500,000. And the 30% of non-controlling interest(NCI)'s fair value was $300,000. At the acquisition date, Huang's equipment was understated by $50,000 with a 5 vear remaining life; Patents was underreported by 60,000 with a 6 year remaining life; trademarks was overvalued by $10,000 with a remaining life of 5 years. Three years later, Huang Inc reports the following information. Ouyang Inc Huang Inc Current assets Equipment Trademarks $300,000 $320,000 250,000 150,000 210,000 140,000 200,000 280,000 100,000 320,000 Patents 150,000 Liabilities Revenues Expenses 340,000 450,000 180,000 What is the consolidated balance of trademarks today?
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PP-SS
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