s Tyler Company acquired all of Jasmine Company's outstanding stock on January 1, 2022, for $267,100 in cash. Jasmine had a bookvalue of only $200,600 on that date. However, equipment (having an eight-year remaining life) was undervalued by $59,200 onJasmine's financial records. A building with a 20-year remaining life was overvalued by $17,000. Subsequent to the acquisition,Jasmine reported the following:Year202220232024Net Income$ 54,20060,50035,500In accounting for this investment, Tyler has used the equity method. Selected accounts taken from the financial records of these twocompanies as of December 31, 2024, follow:AccountsDividendsDeclared$ 10,00040,00020,000Revenues-operatingExpensesEquipment (net)Buildings (net)Common stockRetained earnings, 12/31/24a. Investment in Jasmine Companyb. Equity in Subsidiary Earningsc. Consolidated Net Incomed. Consolidated Equipment (net)e. Consolidated Buildings (net)f. Consolidated Goodwill (net)Tyler Company$ (424,000)g. Consolidated Common Stockh. Consolidated Retained Eamings, 12/31/24295,000450,000346,000(290,000)(476,000)Required:Determine the following account balances as of December 31, 2024:Jasmine Company$ (119,000)Amounts83,50056,50072,300(79,200)(198,000)

Acquisition of companies :-The acquisition of companies, commonly referred to as mergers and…

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Chapter11: Long-term Assets

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Problem 11PB: On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received...

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Tyler Company acquired all of Jasmine Company's outstanding stock on January 1, 2022, for $206,000 in cash. Jasmine had a book value of only $140,000 on that date. However, equipment (having an eight-year remaining life) was undervalued by $54,400 on Jasmine's financial records. A building with a 20-year remaining life was overvalued by $10,000. Subsequent to the acquisition, Jasmine reported the following: Year 2822 2023 2024 Net Income $ 50,000 60,000 30,000 Dividends Declared $ 10,000 40,000 20,000 In accounting for this investment, Tyler has used the equity method. Selected accounts taken from the financial records of these two companies as of December 31, 2024, follow: Accounts Revenues-operating Expenses Equipment (net) Buildings (net) Common stock Retained earnings, 12/31/24 Tyler Company $ (310,000) 198,000 320,000 220,000 a. Investment in Jasmine Company b. Equity in Subsidiary Earnings c. Consolidated Net Income d. Consolidated Equipment (net) e. Consolidated Buildings (net)…
Tyler Company acquired all of Jasmine Company's outstanding stock on January 1, 2019, for $286,400 in cash. Jasmine had a book value of only $220,000 on that date. However, equipment (having an eight-year remaining life) was undervalued by $60,000 on Jasmine's financial records. A building with a 20-year remaining life was overvalued by $15,700. Subsequent to the acquisition, Jasmine reported the following: 2019 2020 2021 In accounting for this investment, Tyler has used the equity method. Selected accounts taken from the financial records of these two companies as of December 31, 2021, follow: Revenues-operating Net Income $ 74,400 62,500 47,800 Expenses Equipment (net) Buildings (net) Common stock Retained earnings, 12/31/21 a. b. C. d. Dividends Declared $10,000 40,000 20,000 e. f. Determine the following account balances as of December 31, 2021: (Input all amounts as positive values.) Investment in Jasmine Company Equity in Subsidiary Earnings Consolidated Net Income Consolidated…
Tyler Company acquired all of Jasmine Company’s outstanding stock on January 1, 2016, for $206,000 in cash. Jasmine had a book value of only $140,000 on that date. However, equipment (having an eight-year remaining life) was undervalued by $54,400 on Jasmine’s financial records. A building with a 20-year remaining life was overvalued by $10,000. Subsequent to the acquisition, Jasmine reported the following: Net Income Dividends Declared 2016 $ 50,000 $ 10,000 2017 60,000 40,000 2018 30,000 20,000 In accounting for this investment, Tyler has used the equity method. Selected accounts taken from the financial records of these two companies as of December 31, 2018, follow: Tyler Company Jasmine Company Revenues—operating $ (310,000 ) $ (104,000 ) Expenses 198,000 74,000 Equipment (net) 320,000 50,000 Buildings (net) 220,000 68,000 Common stock (290,000 ) (50,000 ) Retained earnings, 12/31/18…
Tyler Company acquired all of Jasmine Company’s outstanding stock on January 1, 2016, for $206,000 in cash. Jasmine had a book value of only $140,000 on that date. However, equipment (having an eight-year remaining life) was undervalued by $54,400 on Jasmine’s financial records. A building with a 20-year remaining life was overvalued by $10,000. Subsequent to the acquisition, Jasmine reported the following: In accounting for this investment, Tyler has used the equity method. Selected accounts taken from the financial records of these two companies as of December 31, 2018, follow: Determine and explain the following account balances as of December 31, 2018: a. Investment in Jasmine Company (on Tyler’s individual financial records). b. Equity in Subsidiary Earnings (on Tyler’s individual financial records). c. Consolidated Net Income. d. Consolidated Equipment (net). e. Consolidated Buildings (net). f. Consolidated Goodwill (net). g. Consolidated Common Stock. h. Consolidated Retained…
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Giant acquired all of Small’s common stock on January 1, 2014, in exchange for cash of $770,000. On that day, Small reported common stock of $170,000 and retained earnings of $400,000. At the acquisition date, $90,000 of the fair-value price was attributed to undervalued land while $50,000 was assigned to undervalued equipment having a 10-year remaining life. The $60,000 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill. Over the next few years, Giant applied the equity method to the recording of this investment. Following are individual financial statements for the year ending December 31, 2018. On that date, Small owes Giant $10,000. Small declared and paid dividends in the same period. Credits are indicated by parentheses. a. How was the $135,000 Equity in Income of Small balance computed? b. Without preparing a worksheet or consolidation entries, determine and explain the totals to be reported by this business combination for the…
Giant acquired all of Small’s common stock on January 1, 2017, in exchange for cash of $770,000. On that day, Small reported common stock of $170,000 and retained earnings of $400,000. At the acquisition date, $37,500 of the fair-value price was attributed to undervalued land while $98,000 was assigned to undervalued equipment having a 10-year remaining life. The $64,500 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill. Over the next few years, Giant applied the equity method to the recording of this investment. The following are individual financial statements for the year ending December 31, 2021. On that date, Small owes Giant $12,800. Small declared and paid dividends in the same period. Credits are indicated by parentheses. Giant Small Revenues $ (1,298,800 ) $ (460,000 ) Cost of goods sold 610,000 115,000 Depreciation expense 190,000 203,000 Equity in income of Small (132,200 ) 0…
Giant acquired all of Small’s common stock on January 1, 2017, in exchange for cash of $770,000. On that day, Small reported common stock of $170,000 and retained earnings of $400,000. At the acquisition date, $37,500 of the fair-value price was attributed to undervalued land while $98,000 was assigned to undervalued equipment having a 10-year remaining life. The $64,500 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill. Over the next few years, Giant applied the equity method to the recording of this investment. The following are individual financial statements for the year ending December 31, 2021. On that date, Small owes Giant $12,800. Small declared and paid dividends in the same period. Credits are indicated by parentheses. Giant Small Revenues $ (1,298,800 ) $ (460,000 ) Cost of goods sold 610,000 115,000 Depreciation expense 190,000 203,000 Equity in income of Small (132,200 ) 0…
Giant acquired all of Small’s common stock on January 1, 2017, in exchange for cash of $770,000. On that day, Small reported common stock of $170,000 and retained earnings of $400,000. At the acquisition date, $37,500 of the fair-value price was attributed to undervalued land while $98,000 was assigned to undervalued equipment having a 10-year remaining life. The $64,500 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill. Over the next few years, Giant applied the equity method to the recording of this investment. The following are individual financial statements for the year ending December 31, 2021. On that date, Small owes Giant $12,800. Small declared and paid dividends in the same period. Credits are indicated by parentheses. Giant Small Revenues $ (1,298,800 ) $ (460,000 ) Cost of goods sold 610,000 115,000 Depreciation expense 190,000 203,000 Equity in income of Small (132,200 ) 0…
Giant acquired all of Small’s common stock on January 1, 2017, in exchange for cash of $770,000. On that day, Small reported common stock of $170,000 and retained earnings of $400,000. At the acquisition date, $32,500 of the fair-value price was attributed to undervalued land while $95,500 was assigned to undervalued equipment having a 10-year remaining life. The $72,000 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill. Over the next few years, Giant applied the equity method to the recording of this investment. The following are individual financial statements for the year ending December 31, 2021. On that date, Small owes Giant $11,900. Small declared and paid dividends in the same period. Credits are indicated by parentheses. Giant Small Revenues $ (1,183,550 ) $ (462,500 ) Cost of goods sold 583,000 98,500 Depreciation expense 187,000 148,000 Equity in income of Small (206,450 ) 0…
At the beginning of the year SassyCat acquired 30% of the outstanding common stock of LazyMouse for $1,200,000. The book value of the net assets of LazyMouse at the time of the acquisition was $4,500,000. Any excess cost over the underlying book value was assigned to a patent that was undervalued on LazyMouse's balance sheet. The patent has a remaining useful life of 5 years. For the year, LazyMouse reported net income of $300,000 and paid cash dividends of $90,000. Question 1 At the end of the year the balance of the LazyMouse investment on the books of SassyCat should be ? (enter whole dollars without dollar signs)
Giant acquired all of Small’s common stock on January 1, 2017, in exchange for cash of $770,000. On that day, Small reported common stock of $170,000 and retained earnings of $400,000. At the acquisition date, $90,000 of the fair-value price was attributed to undervalued land while $50,000 was assigned to undervalued equipment having a 10-year remaining life. The $60,000 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill. Over the next few years, Giant applied the equity method to the recording of this investment. The following are individual financial statements for the year ending December 31, 2021. On that date, Small owes Giant $10,000. Small declared and paid dividends in the same period. Credits are indicated by parentheses. How was the $135,000 Equity in Income of Small balance computed? Without preparing a worksheet or consolidation entries, determine and explain the totals to be reported by this business combination for the…

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