REQUIRED bo 1. Prepare a schedule to assign the difference between the fair value of the investment in Son and the book value of the interest to identifiable and unidentifiable net assets. 2. Prepare a consolidated balance sheet for Pop Corporation and Subsidiary at January 1, 2016.
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- P3.4 Consolidated Balance Sheet Working Paper, Bargain Purchase On January 1, 2019, Paxon Corporation acquired all of the outstanding common stock of Saxon Company for $1.7 billion cash. The balance sheets of Paxon and Saxon, immediately prior to the combination, are shown below: Balance Sheets (in millions) Assets Cash and receivables. Inventory. Equity method investments Land.. Buildings and equipment, net Total assets Liabilities and Shareholders' Equity Current liabilities.. Long-term debt Common stock, par value Additional paid-in capital. Retained earnings Total liabilities and shareholders' equity Paxon (in millions) Inventory.. Equity method investments Land.... Buildings and equipment, net $2,860 1,700 - 650 2,400 $7,610 $1,500 2,000 500 1,200 2,410 $7,610 Saxon $ 720 900 300 175 600 $2,695 $1,000 400 100 350 845 $2,695 Several of Saxon's assets had fair values that were different from their book values. Estimates of the fair values of these items follow: Estimated Fair Value…CASE 1 Presented below are the financial balances for the BonGiovi Company and the Terens Company as of December 31, 2017, immediately before BonGiovi acquired Terens. Also included are the fair values for Terens Company's net assets at that date (thousands of US$). Terens Compute consolidated retained earnings as a result of this acquisition. A) $1,160. Compute consolidated revenues immediately following the acquisition. BonGiovi Book Value Terens Book Value B) $1,170. 31.12.2017 31.12.2017 Fair Value 31.12.2017 C) $1,265. Cash 870 240 240 Receivables 660 600 600 D) $1,280. Inventory 1,230 420 580 Land 1,800 260 250 E) $1,650. Buildings (Net) 1,800 540 650 Equipment (net) 660 380 400 Accounts Payable (570) (240) (240) Accrued expenses (270) (60) Long term Liabilities (2,700) (1,020) (60) (1,120) Common Stock (1,980) A) $3,540. ($20par) B) $2,880. Common Stock ($5 (420) par) C) $1,170. Additional paid in (210) (180) capital D) $1,650. Retained earnings (1,170) (480) Revenue (2,880)…10 Company A acquired 100% of Company B on January 1 2018 at a premium to book value and wants to prepare a consolidated balance sheet for the combined entity as of December 31, 2018 The financial statements for each individual entity are for the period ending December 31, 2018. Balance Sheet Company A Company B Sales 400,000 250,000 Cost of Goods Sold (150,000) (100,000) Depreciation (30,000) (25,000) Net Income 220,000 125,000 Statement of Retained Earnings Beginning Balance 230,000 100,000 Net Income 220,000 125,000 Ending Balance 450,000 225,000 Balance Sheet Totals Cash 20,000 40,000 Accounts Receivable 30,000 25,000 Inventory 60,000 60,000…
- Complete the following Acquired Company's Balance Sheet Before Purchase Amortization Schedule Income Distribution Schedules Consolidated worksheet eliminationsP 3-2 Allocation schedule for fair value/book value differential and consolidated balance sheet at acquisition Pop Corporation acquired 70 percent of the outstanding common stock of Son Corporation on January 1, 2016, for $350,000 cash. Immediately after this acquisition the balance sheet information for the two companies was as follows (in thousands): Son Pop Book Value Book Value Fair Value Assets Cash $ 70 $ 40 $40 Receivables—net 160 60 60 Inventories 140 60 100 Land 200 100 120 Buildings—net 220 140 180 Equipment—net 160 80 60 Investment in Son 350 Total assets $1,300 $480 $ 560 Liabilities and Stockholders’ Equity Accounts payable $ 180 $160 $160 Other liabilities 20 100 80…The balance sheet of the proprietorship of Jacob as of June 30, 2018 showed the following assets andliabilities:Cash P 40,000Accounts Receivable 53,600Inventory 88,000Equipment 65,600Accounts Payable 63,520The cash balance included a 200- share certificate of BW Resources common at acquisition cost of P 1,600; the current market quotation is 70 per share. Of the accounts receivable, an estimated 5% is considered to be doubtful of collection. Certain inventory items, booked at a cost of P22,960, are currently worth P16,000. Depreciation has not been recorded; the equipment, acquired two years ago, has a remaining useful life of about eight more years. Prepaid expense of P 12,800 and accrued expense of P 6,120 have not been properly recognized. Emily and Bert will join Jacob in a partnership. Jacob will invest the net assets of his business, after effecting the appropriate adjustments, and he will be allowed credit for goodwill equal to 10% of his initial capital credit. Emily and Bert…
- PCn reported the book value of its net assets at $200,000 when Z Co acquired 100 % ownership The fair value of P's net assets was determined to be $255,000 on that date, what amount of goodwil will be reported in consolidated financial statements presented immediately following the combination if 2 paid $330,000 for the acquisition Select one 25,000 Ob 20.000 €75,000Consolidation spreadsheet for continuous sale of inventory - Equity methodAssume that a parent company acquired a subsidiary on January 1, 2013. The purchase price was $500,000 million in excess of the subsidiary’s book value of Stockholders’ Equity on the acquisition date, and that excess was assigned to the following AAP assets: AAP Asset OriginalAmount Original UsefulLife (years) Property, plant and equipment (PPE), net $100,000 20 Customer list 175,000 10 Royalty agreement 125,000 10 Goodwill 100,000 indefinite $500,000 The AAP assets with a definite useful life have been amortized as part of the parent’s equity method accounting. The Goodwill asset has been tested annually for impairment, and has not been found to be impaired. Assume that the parent company sells inventory to its wholly owned subsidiary. The subsidiary, ultimately, sells the inventory to customers outside of the consolidated group. You have compiled the following data for the years ending…Questions: a. How much is the Goodwill/Gain on Bargain Purchase? b. How much is the Consolidated Assets? c.
- Question 1 The Omaheke Manufacturers Ltd acquired Salomon Factory Lld on 1 January 2015 for N$ 1.8 million of Salomon Factory Lld ordinary 50 cents shares paying N$1.2m. At the date of acquisition the retained earnings of Salomon Factory Lld were N$110,000. The draft balance sheets of the two enterprises as at 31 December 2017 were as follows: Assets Non-current assets: Omaheke Salomon Manufacturers Factory Ltd Lld N$ 000 N$ 000 Property 1,750 1,340 Plant and equipment 930 620 Investment in Lia 1,400 – 4,080 1,960 370 260 410 250 110 20 890 530 4,970 2,490 2,200 1,200 200 100 1,320 200 3,720 1,500 820 740 350 240 80 10 430 250 4,970 2,490 Current assets: Inventory Trade receivables Cash Total assets Equity and liabilities…SUBSEQUENT TO DATE OF ACQUISITION CHAPTER 3: CONSOLIDATION- 21. Patriotism Company purchased 70% of Strength Company on January 2, 2022 for P420,000. At that date Strength had inventory and plant assets with market values greater than book values in the amount of P50,000 and P90,000, respectively. The inventory and plant assets were assigned to have a remaining life of six months and five years, respectively. Strength Company has 2022 income and dividends of P160,000 and P60,000, respectively and 2023 income and dividends of P210,000 and P80,000, respectively. The balance of non-controlling interest account on December 31. 180,000 NU beg (420K 787. x30%.) 2023 must be: a. P223,200 b. P276,000 P169,200 с. d. P136,800 22. Jenny Company acquired 80% of the equity share capital of SmithUse the following information for questions 1 to 4: On December 31, 2014, Add-On Company acquired 100 percent of Venus Corporation's common stock for P300,000. Balance sheet information Venus just prior to the acquisition is given here: Cash and receivables. P 35,000 Inventory.. Land.. 75,000 100,000 Buildings and equipment (net).. 220.000 Total assets. 420,000 Liabilities and Stockholder's Equity Accounts payable. Bonds payable. Common stock (P1 par). P 65,000 150,000 100,000 Retained earnings.. 115,000 Total liabilities and equity.. 430,000 At the date of the business combination. Venus's net assets and liabilities approximated fair value except for inventory, which had a fair value of P60,000, land which had a fair value of P125,000, and buildings and equipment (net), which had a fair value of P250,000. 1. What amount of inventory will be included in the consolidated balance sheet immediately following the acquisition? а. Р15,000 C. P60,000 b. P45,000 2. What amount of goodwill will…