Pronto Company acquired of the common stock of Slow Company on January 1, year one, for On that date, Slow had the following trial balance: account debit Additional paid in capital Building (12-year life) $250,000 Common stock Current assets Equipment (6-yr life) 170,000 160,000 110,000 Land Liabilities (due in 4 years) Retained earnings 1/year 1 Totals During year one, Slow reported net income of $690,000 $690,000 During year two, Slow reported net income of Building Equipment During year one, Slow paid dividends of credit $100,000 170,000 On January 1, year one, fair values were: Land 300,000 120,000 During year two, Slow paid dividends of $146,000 $274,000 $172,000 Problem 4. Use the data for the Pronto Company acquisition of the Slow Company to prepare the consolidation worksheet entries for December 31 of year one. Problem 5. Use the data for the Pronto Company acquisition of the Slow Company to prepare the consolidation worksheet entries for December 31 of year two. 100% $600,000 There was no impairment of any goodwill arising from the acquisition. Please indicate clearly which method you choose for Pronto to use to account for its acquisition of Slow Company. $60,000 $30,000 $80,000 $40,000
Pronto Company acquired of the common stock of Slow Company on January 1, year one, for On that date, Slow had the following trial balance: account debit Additional paid in capital Building (12-year life) $250,000 Common stock Current assets Equipment (6-yr life) 170,000 160,000 110,000 Land Liabilities (due in 4 years) Retained earnings 1/year 1 Totals During year one, Slow reported net income of $690,000 $690,000 During year two, Slow reported net income of Building Equipment During year one, Slow paid dividends of credit $100,000 170,000 On January 1, year one, fair values were: Land 300,000 120,000 During year two, Slow paid dividends of $146,000 $274,000 $172,000 Problem 4. Use the data for the Pronto Company acquisition of the Slow Company to prepare the consolidation worksheet entries for December 31 of year one. Problem 5. Use the data for the Pronto Company acquisition of the Slow Company to prepare the consolidation worksheet entries for December 31 of year two. 100% $600,000 There was no impairment of any goodwill arising from the acquisition. Please indicate clearly which method you choose for Pronto to use to account for its acquisition of Slow Company. $60,000 $30,000 $80,000 $40,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:of the common stock of
Slow Company on January 1, year one, for
Pronto Company acquired
On that date, Slow had the following trial balance:
account
debit
Additional paid in capital
Building (12-year life) $250,000
Common stock
Current assets
Equipment (6-yr life)
Totals
Land
Liabilities (due in 4 years)
Retained earnings 1/year 1
170,000
160,000
110,000
During year one, Slow reported net income of
During year two, Slow reported net income of
Building
Equipment
$690,000 $690,000
credit
$100,000
During year one, Slow paid dividends of
On January 1, year one, fair values were:
Land
170,000
300,000
120,000
During year two, Slow paid dividends of
$146,000
$274,000
$172,000
Problem 4. Use the data for the Pronto Company acquisition of the Slow
Company to prepare the consolidation worksheet entries
for December 31 of year one.
Problem 5. Use the data for the Pronto Company acquisition of the Slow
Company to prepare the consolidation worksheet entries
for December 31 of year two.
100%
$600,000
There was no impairment of any goodwill arising from the acquisition.
Please indicate clearly which method you choose for Pronto to use to
account for its acquisition of Slow Company.
$60,000
$30,000
$80,000
$40,000
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