Answered: reports goodwill

Business

Accounting

reports goodwill

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Pizza Corporation Slice Products Company

A: Journal entry Journal entry is a set of economic events which can be measured in financial terms.…

Q: Public Corporation acquired 90 percent of Station Company's voting common stock on January 1, 20X1,…

A: Book value of Station's shares purchased by Public Corporation=Book value of Stations’ net assets x…

Q: P Limited obtained control with the acquisition of an 80% equity interest in the share capital of S…

A: Goodwill is the amount paid by the acquirer in excess of the fair value of net assets of the…

Q: Quark acquired 70% of the 1m issued £1 ordinary shares of Whey on 1 January 20X1 when Whey's…

A: A minority interest seems to be another term for a non-controlling interest. This is a situation…

Q: On June 30, 20X1, Naeder Corporation purchased for cash at $10 per share all 100,000 shares of the…

A: When company purchased the other company than it may be purchased at lower price or at higher price…

Q: Pesto Corporation acquired 75 percent of Sauce Corporation's common stock on January 1, 20X7, for…

A: A consolidated balance sheet is a document that, without dividing the companies, compiles all of the…

Q: What is the amount of consolidated net income attributable to controlling interest in 20x1?

A: Net income:The net income refers to the amount that is determined after taking care of all the…

Q: a) Assuming that Y's net income in the first year following the acquisition was $950,000, prepare…

A: In order to comply with IFRS 3's principles and criteria, an acquisition must: recognizes and…

Q: Public Corporation acquired 90 percent of Station Company's voting common stock on January 1, 20X1,…

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

Q: Kochin Corporation (KC) owns an 85% stake in Doha Corporation (DC). On January 1, 20XX, KC decided…

A: 1. As per IFRS 10, an entity has to prepare the consolidated financial statements and record the…

Q: On 1 January 20X8, Coconut acquired 80% of the share capital of Rice for £100,000 when Rice had…

A: Calculation of Retained earnings balance as on 31 Dec, 2019 in CFS Balance of Retained…

Q: On January 1, 20X1, Pinto Company purchased an 80% interest in Sands Inc. for $1,000,000. The equity…

A: Solution Income statement is the statement which shows companies Revenue ,expenses and profitability…

Q: On 1 July 2020, Sky Ltd acquired 70% of the share capital (ex. div.) of Jim Ltd for $500,000. At…

A: Part 2: ExplanationIn Step 1, we calculated the NCI share of Jim Ltd's equity on the acquisition…

Q: Chalmers Ltd is a parent company that prepares consolidated financial statements. On 1 July 2019…

A: Consolidation journal entries are the entries in the books of accounts of the group of companies…

Q: DC Company purchased 100% of the outstanding common shares of FA Company on December 31, 20X3 for…

A: At the time of business combination, if the fair value of an asset exceeds its carrying amount, the…

Q: Phantom acquired 70% of the $100,000 equity share capital of Ghost, its only subsidiary, for…

A: We have the following information: Phantom acquired 70% of the $100,000 equity share capital for…

Q: Livermore Corporation acquired 90 percent of Tiger Corporation's voting stock on January 1,20X2, for…

A: The objective of the question is to calculate the amount Livermore will report as income from Tiger…

Q: Graham Limited acquired 90% of the share capital and reserves of Terry Limited for $170,000. Share…

A: Given Information:Share capital (Terry Limited): $100,000Reserves (Terry Limited):…

Q: Kochin Corporation (KC) owns an 85% stake in Doha Corporation (DC). On 1 January 20XX, KC decided to…

A: 1) As per IFRS 10, an entity has to prepare the consolidated financial statements and record the…

Q: 2. At 1 January 20X6 Steller acquired 75% of the share capital of Nebula for capital of Nebula…

A: Goodwill refers to the intangible value of a business that arises from factors such as its…

Q: On January 1, 20X6, Plus Corporation acquired 90 percent of Side Corporation for $180,000 cash. Side…

A: Investment is the allocation of resources, generally money, with the goal of earning profit or…

Q: calculate the value of the NCI at the date of acquisition.

A: We first need to determine the net asset value. This can be computed with the formula below:

Q: aying of its own common stock with a fair value of $40 per share. Parent paid legal and accounting…

A: Solution: 1. Land = $767,500 + $114,700 = $ 882,200 2. Building and equipment = $780,000 +…

Q: Cacik acquired 80% of the 1 million issued £1 ordinary shares capital of Chaas on 1 April 20X1 for…

A: When an entity acquires voting interest of another entity by acquiring either partially or fully the…

Question

On 1 January 20X1 Tall plc acquired 80% of ordinary shares of Small plc for a price of £30,000, when Small plc’s net assets had fair value of £12,000. The non-controlling interest (NCI) in Small plc was consolidated at its fair value of £6,000.

At 31 December 20X1, Tall plc’s directors decided to take a goodwill impairment of £1,000.

Tall plc’s IFRS consolidated statement of financial position at 31 December 20X1 reports goodwill (related to the investment in Small plc) for an amount of:

£14,000

£13,000

£15,000

£7,000

Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Step 1

VIEW

Step 2: Step 2

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $148,000. On that date, the fair value of the noncontrolling interest was $37,000, and Slice reported retained earnings of $45,000 and had $93,000 of common stock outstanding. Pizza has used the equity method in accounting for its investment in Slice. Trial balance data for the two companies on December 31, 20X5, are as follows: PizzaCorporation SliceProducts Company Item Debit Credit Debit Credit Cash & Receivables $ 86,000 $ 80,000 Inventory 270,000 94,000 Land 83,000 83,000 Buildings & Equipment 501,000 154,000 Investment in Slice Products Company 176,400 Cost of Goods Sold 115,000 45,000 Depreciation Expense 25,000 15,000 Inventory Losses 15,000 6,000 Dividends Declared 45,000…
.Miner Ltd acquired 75% of the share capital of Iver Ltd (Iver) for £1.2m three years ago, when Iver 's net assets were £1.4m. As at 31 August 2020, Iver has net assets of £1.75m.What figures would be included in the consolidated Statement of FinancialPosition as at 31 August 2020 for the Miner Group to reflect the ownership of Iver Ltd?a) Goodwill £200,000Non-controlling interest £1,312,500b) Goodwill £150,000Non-controlling interest £437,500c) Goodwill £150,000Non-controlling interest £1,312,500d) Goodwill £200,000Non-controlling interest £437,500 Show working
Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $148,000. On that date, the fair value of the noncontrolling interest was $37,000, and Slice reported retained earnings of $45,000 and had $93,000 of common stock outstanding. Pizza has used the equity method in accounting for its investment in Slice. Trial balance data for the two companies on December 31, 20X5, are as follows: PizzaCorporation SliceProducts Company Item Debit Credit Debit Credit Cash & Receivables $ 86,000 $ 80,000 Inventory 270,000 94,000 Land 83,000 83,000 Buildings & Equipment 501,000 154,000 Investment in Slice Products Company 176,400 Cost of Goods Sold 115,000 45,000 Depreciation Expense 25,000 15,000 Inventory Losses 15,000 6,000 Dividends Declared 45,000…
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
On 31 December 20x1, AAA Ltd acquired 70% equity interest in BBB Ltd by paying a consideration of $120,000 to the shareholders when the fair value of BBB Ltd's identifiable net assets was ascertained to be $100,000. a) What is the amount of goodwill if any? b) What is the amount of non-controlling interest (NCI) at acqusition assuming AAA measures any NCI in the subsidiary at the proportionate share of the subsidiary's identifiable net assets?
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
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,…
On December 31, 20X1, Par Inc reported total assets of $860,203, while Sub Corp reported total assets of $171,991. The fair values of Sub's assets and liabilities on the same date were $214421 and $49,313 respectively. On the morning of January 1, 20x2, Par agreed to acquire 100% of Sub for a total value of 86.25% of Sub for a total value of $286,678 by paying cash. On the consolidated balance sheet immediately after the acquisition, what should be the total assets reported by the combined entity under the fair-value-enterprise (FVE) method? a. $955,218 b. $979,099 Oc. $1,002,979 Od. $1,026.860 O e. $931,338 On January 1, 20X1, Par inc acquires 79.05% of Sub Corp for $153,469 in cash. Immediately before the acquisition, the book value of Sub's identifiable net assets was $104,016 with a fair value of $116,806, while the book value of Par's net assets was $204.623. What will be the amount of total shareholders' equity on the consolidated balance sheet immediately after the acquisition…
On January 1, 20X1, Cleo Company purchased an 80% interest in Sai Inc. for $1,000,000. The equity balances of Sai at the time of the purchase were as follows: Common stock ($10 par) $100,000 Paid-in capital in excess of par 400,000 Retained earnings 500,000 Any excess of cost over book value is attributable to goodwill. No dividends were paid by either firm during 20X6. The following trial balances were prepared for CLeo Company and its subsidiary, Sai Inc., on December 31, 20X6: Pinto Sands Cash 120,000 70,000 Accounts receivable 240,000 197,000 Inventory 200,000 176,000 Land 600,000 180,000 Buildings and equipment 1,100,000 800,000 Accumulated depreciation (180,000) (120,000) Investment in Sands 1,000,000 Accounts payable (110,000) (50,000) Common stock, $10 par (800,000) (100,000) Paid-in capital in excess of par…