b. Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1. (If no entry isrequired for a transaction/event, select "No journal entry required" in the first account field.)view transaction latA Record the basic consolidation entry.>B Record the amortized excess value reclassification entry.C Record the excess value (differential) reclassificationentry. Public Corporation acquired 90 percent of Station Company's voting common stock on January 1, 20X1, for $502,200. At the time ofthe combination, Station reported common stock outstanding of $123,000 and retained earnings of $390,000, and the fair value of thenoncontrolling interest was $55,800. The book value of Station's net assets approximated market value except for patents that had amarket value of $45,000 more than their book value. The patents had a remaining economic life of ten years at the date of thebusiness combination. Station reported net income of $65,000 and paid dividends of $23,000 during 20x1.Required:a. What balance did Public report as its investment in Station at December 31, 20X1, assuming Public uses the equity method inaccounting for its investment?Balance in investment account

In the given question, we are provided with the data of a public corporation. The corporation has…

Answered: Public Corporation acquired 90 percent…

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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On January 1, 20X8, Ramon Corporation acquired 80 percent of Tester Company's voting common stock for $300,000. At the time of the combination, Tester reported common stock outstanding of $200,000 and retained earnings of $110,000, and the fair value of the noncontrolling interest was $75,000. The book value of Tester's net assets approximated market value except for patents that had a market value of $40,000 more than their book value. The patents had a remaining economic life of five years at the date of the business combination. Tester reported net income of $40,000 and paid dividends of $10,000 during 20X8. What is the amount of Total Excess Depreciation that will be recorded for 20X8? Group of answer choices $6,000 $5,000 $8,000 $40,000
Livermore Corporation acquired 90 percent of Tiger Corporation's voting stock on January 1,20X2, for $450,000. The fair value of the noncontrolling interest was $50,000 at the date of acquisition. Tiger reported common stock outstanding of $100,000 and retained earnings of $280,000. The differential is assigned to buildings with an expected life of 15 years at the date of acquisition. On December 31,20X4, Livermore had $30,000 of unrealized profits on its books from inventory sales to Tiger, and Tiger had $40,000 of unrealized profit on its books from inventory sales to Livermore. All inventory held at December 31, 20X4, was sold during 20 x5. On December 31,20 X5, Livermore had $18,000 of unrealized profit on its books from inventory sales to Tiger, and Tiger had unrealized profit on its books of 45,000 from inventory sales to Livermore. In 20x5 Tiger reported net income of $225,000. The amount Livermore will report as income from Tiger Company for year 20x5would be
On January 1, 2010, A Corporation acquired 80% of ordinary shares of G Company at fair value of net assets acquired. All assets of G company are fairly valued except for a blue office equipment with book value of P2,100,000 and fair value of P1,400,000. On June 30, 2010, G Company sold the said blue office equipment to A Corporation at a selling price of P3,000,000. On June 30, 2010, the remaining useful life of the blue equipment is 3 years. On October 1, 2010, A Corporation sold a 2-year-old red office equipment to G Company for P2,800,000 at a gain of P400,000. On October 1, 2010, the remaining useful life of the red equipment is 4 years. What is the consolidated book value of equipment on December 31, 2010, respectively? Ans. 3,250,000 (Show solution)
RR Corporation acquired 80 percent of the stock of GG Company by issuing shares of its common stock with a fair value of P192,000. At that time, the fair value of non-controlling interest was estimated to be P48,000 and the fair values of its identifiable assets and liabilities were P310,000 and P95,000, respectively. GG’s assets and liabilities had book values of P220,000 and P95,000, respectively. Compute for "Investment in GG" reported by RR to be reported immediately after the combination Additional question: Using the same information above, compute for the increase in identifiable assets of the combined entity immediately after the combination.
Public Corporation acquired 90 percent of Station Company's voting common stock on January 1, 20X1, for $504,900. At the time of the combination, Station reported common stock outstanding of $127,000 and retained earnings of $384,000, and the fair value of the noncontrolling interest was $56,100. The book value of Station's net assets approximated market value except for patents that had a market value of $50,000 more than their book value. The patents had a remaining economic life of five years at the date of the business combination. Station reported net income of $70,000 and paid dividends of $23,000 during 20X1. Required: a. What balance did Public report as its investment in Station at December 31, 20X1, assuming Public uses the equity method in accounting for its investment? Balance in investment account b. Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1. Note: If no entry is required for a transaction/event,…
Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $108,500. At that date, the noncontrolling interest had a fair value of $46,500 and Soda reported $70,000 of common stock outstanding and retained earnings of $30,000. The differential is assigned to buildings and equipment, which had a fair value $20,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $35,000 higher than book value and a remaining life of five years at the date of the business combination. Trial balances for the companies as of December 31, 20X3, are as follows: Pop Corporation Soda Company Item Debit Credit Debit Credit Cash & Accounts Receivable $ 15,400 $ 21,600 Inventory 165,000 35,000 Land 80,000 40,000 Buildings & Equipment 340,000 260,000 Investment in Soda Company…
RR Corporation acquired 80 percent of the stock of GG Company by issuing shares of its common stock with a fair value of P192,000. At that time, the fair value of non-controlling interest was estimated to be P48,000 and the fair values of its identifiable assets and liabilities were P310,000 and P95,000, respectively. GG’s assets and liabilities had book values of P220,000 and P95,000, respectively. REQUIRED: 1. Compute for the increase in identifiable assets of the combined entity immediately after the combination. 2. Compute for the increase in total liabilities of the combined entity immediately after the combination.
Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $108,500. At that date, the noncontrolling interest had a fair value of $46,500 and Soda reported $70,000 of common stock outstanding and retained earnings of $30,000. The differential is assigned to buildings and equipment, which had a fair value $20,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $35,000 higher than book value and a remaining life of five years at the date of the business combination. Trial balances for the companies as of December 31, 20X3, are as follows: Pop Corporation Soda Company Item Debit Credit Debit Credit Cash & Accounts Receivable $ 15,400 $ 21,600 Inventory 165,000 35,000 Land 80,000 40,000 Buildings & Equipment 340,000 260,000 Investment in Soda Company…
Item Cash Pie Corporation acquired 75 percent of slice Company's ownership on January 1, 20X8, for $96,000. At that date, the fair value of the noncontrolling interest was $32,000. The book value of slice's net assets at acquisition was $92,000. The book values and fair values of Slice's assets and liabilities were equall, except for Slice's buildings and equipment, which were worth $18,400 more than book value. Accumulated depreciation on the buildings and equipment was $24,000 on the acquisition date. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, the management of Pie concluded at December 31, 20Xx8, that goodwill from its purchase of Slice shares had been impaired and the correct carrying amount was $2,600. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders. Trial balance data for Pie and Slice on December 31, 20X8, are as follows: Prepare a three-part consolidation…
First Boston Corporation acquired 80 percent of Gulfside Corporation common stock on January 1, 20X5. Gulfside holds 60 percent of the voting shares of Paddock Company, and Paddock owns 10 percent of the stock of First Boston. All acquisitions were made at underlying book value. The fair value of the noncontrolling Interest in Gulfside was equal to 20 percent of the book value of Gulfside when acquired by First Boston, and the fair value of the noncontrolling Interest in Paddock was equal to 40 percent of its book value when control was acquired by Gulfside. During 20X7, Income from the separate operations of First Boston, Gulfside, and Paddock was $58,000, $48,000, and $64,000, respectively, and dividends of $44,000, $34,000, and $24,000, respectively, were paid. The companies use the cost method of accounting for Intercorporate Investments and, accordingly, record dividends received as other (nonoperating) Income. Required: Compute the amount of consolidated net Income and the income…

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