Problem 4 Galiano Co. sustained heavy losses for a number of years and conditions warrant that it should u quasi-reorganization. The statement of financial position of Galiano before the quasi-reorganizatio follows: Current assets P 4,000,000 P10,000,000 Property, plant and equipment Accumulated depreciation (3,000,000) 7,000,000 Goodwill 500,000 Total assets 11,500,000 Current liabilities 5,500,000 Ordinary share capital, P50 par 8,000,000 2,000,000 Share premium-ordinary Retained earnings (4,000,000) Total liabilities and equity 11.500,000 The following restatements should be made: a. Property, plant and equipment are determined to have a fair value of P28,000,000. b. The net realizable value of accounts receivable should be reduced by P300,000. c. Goodwill is to be written off. d. Warranties payable are understated by P200,000. e. Any resulting deficit is charged against revaluation surplus. Requirements: 1. Journal entries of the restatements 2. Condensed statement of financial position after the quasi-reorganization

Problem 4 Galiano Co. sustained heavy losses for a number of years and conditions warrant that it should u quasi-reorganization. The statement of financial position of Galiano before the quasi-reorganizatio follows: Current assets P 4,000,000 P10,000,000 Property, plant and equipment Accumulated depreciation (3,000,000) 7,000,000 Goodwill 500,000 Total assets 11,500,000 Current liabilities 5,500,000 Ordinary share capital, P50 par 8,000,000 2,000,000 Share premium-ordinary Retained earnings (4,000,000) Total liabilities and equity 11.500,000 The following restatements should be made: a. Property, plant and equipment are determined to have a fair value of P28,000,000. b. The net realizable value of accounts receivable should be reduced by P300,000. c. Goodwill is to be written off. d. Warranties payable are understated by P200,000. e. Any resulting deficit is charged against revaluation surplus. Requirements: 1. Journal entries of the restatements 2. Condensed statement of financial position after the quasi-reorganization

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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14 DUFFLE Corp. had the following data ascertained before liquidation: Total book value of the assets were P250,000. The book value of the inventories, P80,000 had an excess in the amount of P26,000 over its estimated fair value. The equipment’s estimated fair value had an excess in the amount of P2,500 over its book value of P120,000. Included in the book value of the assets was prepaid expenses of P18,000 which was considered worthless. Other assets not mentioned above have an estimated fair value which was P15,000 less than its book value. Total liabilities were P200,000. The accounts payable in the amount of P70,000 was secured by the inventories while the notes payable in the amount of P95,000 was secured by the equipment. Other liabilities not mentioned includes salaries and taxes in the amount of P12,500. What is the amount of net free assets? Group of answer choices 50,000 44,500 32,000 93,000
Identifiable Intangibles and Goodwill Prince Corporation acquires Squire Service Corporation for one million shares of Prince stock, valued at $35 per share. Squire is merged into Prince, although it continues to do business under the Squire Service name. Professional fees connected with the acquisition are $1,200,000 and costs of registering and issuing the new shares are $600,000, both paid in cash. Squire performs vehicle maintenance services for owners of auto, truck and bus fleets. Squire's balance sheet at acquisition is as follows: Cash Accounts receivable Parts inventory Equipment Total assets $300,000 Current liabilities 2,700,000 Long-term liabilities 5,200,000 Shareholders' equity 17,600,000 $25,800,000 Total liabilities and equity $25,800,000 In reviewing Squire's assets and liabilities, you determine the following. 1. On a discounted present value basis, the accounts receivable have a fair value of $2,600,000, and the long-term liabilities have a fair value of $8,000,000.…
7 DUFFLE Corp. had the following data ascertained before liquidation: Total book value of the assets were P250,000. The book value of the inventories, P80,000 had an excess in the amount of P26,000 over its estimated fair value. The equipment’s estimated fair value had an excess in the amount of P2,500 over its book value of P120,000. Included in the book value of the assets was prepaid expenses of P18,000 which was considered worthless. Other assets not mentioned above have an estimated fair value which was P15,000 less than its book value. Total liabilities were P200,000. The accounts payable in the amount of P70,000 was secured by the inventories while the notes payable in the amount of P95,000 was secured by the equipment. Other liabilities not mentioned includes salaries and taxes in the amount of P12,500. what is the estimated recovery percentage for the notes payable? Group of answer choices 96.14% 95.90% 100% 96.43%
8.15 Analyzing Disclosures Regarding Fixed Assets. Exhibit 8.21 presents selected financial statement data for three chemical companies: Monsanto Company, Olin Corporation, and NewMarket Corporation. (NewMarket was formed from a merger of Ethyl Corporation and Afton Chemical Corporation.) Exhibit 8.21 Three Chemical Companies' Selected Financial Statement Data on Depreciable Assets (amounts in millions) (Problem 8.15) New Market Corporation Monsanto Olin Company Q Q Depreciable assets at cost: Beginning of year End of year Accumulated depreciation: Beginning of year $752 $4,611 $1,796 777 4,604 1,826 584 2,331 1,301 End of year 611 2,517 1,348 Net income 33 267 55 Depreciation expense 27 328 72 Deferred tax liability relating to depreciable assets: Beginning of year 13 267 83 End of year 9 256 96 Income tax rate 35% 35% 35% Depreciation method for financial reporting Straight-line Straight-line Straight-line Depreciation method for tax reporting Accelerated Accelerated Accelerated
Additional information (a) The entity sold some tangible non-current assets, which had a net book value of $200 million. The cost of sales figure includes a loss of $10 million on this disposal. (b) Cost of sales is arrived at after charging depreciation on the tangible non-current assets of $42 million. (c) Dividends paid during the year were $55,000. IMPORTANT: if your answer is 100,000 for this question please write 100 and IGNORE 000 while writing answer. If you write answer with 000 it will be marked as incorrect Find cashflow from Operations
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Determine the total net free assets.
Big Company purchased all of the assets of Small Company 5 years ago recording Goodwill at the time of the purchase. On 1/1 of the current year they evaluate the Goodwill for impairment. Data Goodwill recorded at time of purchase $150,000 Book Value of the Net Assets of Small Company on 1/1 $900,000 Estimated Fair Value of Small Company on 1/1 $850,000 Undiscounted Estimated Cash flow of Small Company on 1/1 $890,000 What amount of loss on impairment of goodwill should they record on 1/1 O Loss on Impairment of $40,000. Loss on Impairment of $ 0. Loss on Impairment of $ 10,00. O Loss on Impairment of $ 50,000.
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Questio n 12 On July 1, 2020 , Brandon SE purchased Mills Company by paying $140,000 cash. On July 1, 2020, the fair value of the net assets of Mills Company was as follows. Buildings (net) $ 30,000 Patent 8,000 Land 25,000 Accounts receivable 12,000 Cash 50,000 Accounts payable 10,000 What is the amount of goodwill to be reported at Brandon's statement of financial position on 31/12/2019? 25000 15000 Zero 35000 37°C Haze e to search DELL
You are the Certified Managerial Accountant (CMA) for Southwood Company. You have worked for the company for several years and your responsibilities include working with managers to analyze business decisions by allocating production costs to goods and creating budgets and production forecasts. You also provide information to the external accountant for the preparation of the financial statements. Your opinion is well respected and you have successfully worked with management on several big projects in the past. Southwood Company manufactures a single line of footballs in a small plant. Management has been meeting on several ideas they are considering about expansion of the plant as well as your advice on which would be the best alternative for production. After you have prepared the journal entries and income statement for the current year, management has asked you to review the data related to the proposed scenarios and prepare a presentation for top management. Part One: Management…