Required InformationOn January 1, 2022, Palmcroft Company acquired 100 percent of the outstanding voting shares of Salt River, Incorporated,for $600,000 cash. At January 1, 2022, Salt River's net assets had a total carrying amount of $420,000. Equipment (eight-year remaining life) was undervalued on Salt River's financial records by $80,000. Any remaining excess fair over bookvalue was attributed to a database developed by Salt River (four-year remaining life), but not recorded on its books.Palmcroft applies the equity method to account for its Investment in Salt River. Each year since the acquisition, Salt Riverhas declared a $20,000 dividend. Salt River recorded net income of $70,000 in 2022 and $80,000 in 2023.Selected account balances from the two companies' individual records were as follows:2024 Revenues2024 ExpensesItem2024 Income from Salt RiverRetained earnings, 12/31/24Palmcroft$ 498,000350,00055,000250,000Salt River$ 285,000195,000175,000What is Palmcroft's consolidated retained earnings balance at December 31, 2024?Multiple Choice○ $360,000○ $290,000$330,000○ $250,000

Palmcroft Acquisition Details:Purchase Price = $600,000Salt River's Net Assets = $420,000Excess Fair…

Answered: Required Information On January 1,…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

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

See similar textbooks

Similar questions

On January 1, 2022, Palmcroft Company acquired 100 percent of the outstanding voting shares of Salt River, Incorporated, for $776,000 cash. At January 1, 2022, Salt River’s net assets had a total carrying amount of $543,200. Equipment (eight-year remaining life) was undervalued on Salt River’s financial records by $126,000. Any remaining excess fair over book value was attributed to a database developed by Salt River (four-year remaining life), but not recorded on its books. Palmcroft applies the equity method to account for its investment in Salt River. Each year since the acquisition, Salt River has declared a $46,000 dividend. Salt River recorded net income of $111,000 in 2022 and $125,600 in 2023. Selected account balances from the two companies’ individual records were as follows: Items Palmcroft Salt River 2024 Revenues $ 554,000 $ 349,400 2024 Expenses 362,000 251,000 2024 Income from Salt River 55,950 - Retained earnings, 12/31/24 298,150 231,300 On its…
devuben
On March 31, 2021, JISOO Company purchased 32,000 shares of the 40,000 outstanding shares of ROSECompany at a price of P1,200,000 with an excess of P30,000 over the book value of ROSE Company’snet assets. P13,000 of the excess is attributed to an undervalued equipment with a remaining usefullife of 10 years from the date of acquisition and the rest of the amount is attributed to goodwill. Forthe year 2021, JISOO Company reported a net income of P750,000 and paid dividends of P180,000.While ROSE Company reported a net income of P240,000 which was evenly earned during the yearand paid dividends to JISOO Company amounting to P39,000. Goodwill was not impaired in 2021.The retained earnings of JISOO Company at the end of 2021 per books is P1,025,000. JISOO Companyuses the cost method to account for its investment in ROSE Company. Non-controlling interest ismeasured at fair market value. Requirement:Compute for the non-controlling interest in net assets on December 31, 2021.
Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018:On January 1, 2018, Penske acquired all of Stanza’s outstanding stock for $680,000 fair value in cash and common stock. Penske also paid $10,000 in stock issuance costs. At the date of acquisition, copyrights (with a six-year remaining life) have a $440,000 book value but a fair value of $560,000.a. As of December 31, 2018, what is the consolidated copyrights balance?b. For the year ending December 31, 2018, what is consolidated net income?c. As of December 31, 2018, what is the consolidated retained earnings balance?d. As of December 31, 2018, what is the consolidated balance to be reported for goodwill?
On January 2, 2019, Peace Co. acquired 80% of the outstanding common stock of Shade Co. for ₱1,344,000 with no goodwill resulting from the acquisition. The following selected account balances were taken from the accounting records of Shade Co. BV FV Building 12,000,000 12,400,000 Machinery 620,000 500,000 The building has an estimated useful life of 10 years and the equipment is expected to last for 5 years. For the year 2019, Peace Co. reported net income from own operations of ₱2,240,000 and Shade Co. reported ₱600,000 net income from own operations. Peace Co. accounts its investment in Shade Co. using the cost method. What is the consolidated income statement for the year 2019.
Parentheses indicate a credit balance. On January 1, 2024, Penske acquired all of Stanza's outstanding stock for $818,000 fair value in cash and common stock. Penske also paid $10,000 in stock issuance costs. At the date of acquisition, copyrights (with a six-year remaining life) have a $632,000 book value but a fair value of $746,000. Required: a. As of December 31, 2024, what is the consolidated copyrights balance? b. For the year ending December 31, 2024, what is consolidated net income? c. As of December 31, 2024, what is the consolidated retained earnings balance? d. As of December 31, 2024, what is the consolidated balance to be reported for goodwill?
On January 3, 2020, Novak Limited purchased 3,500 (35%) of the common shares of Sonja Corp. for $468,900. The following information is provided about the identifiable assets and liabilities of Sonja at the date of acquisition: Carrying Amount Fair Value Assets not subject to depreciation $516,000 $516,000 Assets subject to depreciation (10 years remaining) 806,000 866,000 Total identifiable assets 1,322,000 1,382,000 Liabilities 108,000 108,000 During 2020, Sonja reported the following information on its statement of comprehensive income: Income before discontinued operations $208,000 Discontinued operations (net of tax) (71,900) Net income and comprehensive income 136,100 Dividends declared and paid by Sonja November 15, 2020 124,000 Assume that the 35% interest is enough to make Sonja an associate of Novak, and that Novak is required to apply IFRS for its financial reporting. The fair…
On January 1, 2016, Phoenix Co. acquired 100 percent of the outstanding voting shares of Sedona Inc. for $662,000 cash. At January 1, 2016, Sedona’s net assets had a total carrying amount of $463,400. Equipment (eight-year remaining life) was undervalued on Sedona’s financial records by $96,000. Any remaining excess fair over book value was attributed to a customer list developed by Sedona (four-year remaining life), but not recorded on its books. Phoenix applies the equity method to account for its investment in Sedona. Each year since the acquisition, Sedona has declared a $20,500 dividend. Sedona recorded net income of $99,500 in 2016 and $110,300 in 2017. Selected account balances from the two companies’ individual records were as follows: Phoenix Sedona 2018 Revenues $ 544,000 $ 381,000 2018 Expenses 387,000 280,000 2018 Income from Sedona 63,350 Retained earnings 12/31/18 270,350 224,500 On its December 31, 2018, consolidated…
On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shares with a market price of P45 per share. The book value of Luna Corp.’s identifiable net assets approximate its fair value, except for the following: • Merchandise inventory’s fair value is lower than the book balance by 150,000. • Equipment-A, with 2 years remaining useful life, costing P300,000 is understated by P50,000. • Land with a fair value of P500,000 is recognized in the books amounting to P350,000. The following events happened to Luna Corp. • Equipment-A was sold in June 30, 2023 for P320,000. • 60% of merchandise inventory were sold in 2022. • There is no movement as to the ordinary shares of Luna Corp during the year. The unadjusted trial balance as of December 31, 2022 were as follows: Lucas Company Luna Corp Cash 2,240,000 1,800,000 Trade Receivables 1,000,000 960,000 Merchandise Inventory…
On January 1, 2024, Windsor Company purchased 8,896 shares of Sheridan Company's common stock for $131,000. Immediately after the stock acquisition, the statements of financial position of Windsor and Sheridan appeared as follows: Assets Windsor Sheridan Cash $40,850 $20,370 Accounts receivable 50,180 32,780 Inventory 44,020 26,230 Investment in Sheridan Company 131,000 Plant assets 160,360 101,030 Accumulated depreciation-plant assets (55,790) (18,940) Total $370,620 $161,470 Liabilities and Owners' Equity Current liabilities $16,910 $23,570 Mortgage notes payable 40,080 Common stock, $10 par value 112,700 111,200 Other contributed capital 125,210 15,650 Retained earnings 75,720 11,050 Total $370,620 $161,470 (a1) (a2) Prepare a schedule to compute the difference between book value of equity and the value implied by the purchase price. Any difference between the book value of equity and the value implied by the purchase price relates to subsidiary plant assets. $ Parent Share $ Non-…
On January 1, 2024, Windsor Company purchased 8,896 shares of Sheridan Company's common stock for $131,000. Immediately after the stock acquisition, the statements of financial position of Windsor and Sheridan appeared as follows: Assets Windsor Sheridan Cash $40,850 $20,370 Accounts receivable 50,180 32,780 Inventory 44,020 26,230 Investment in Sheridan Company 131,000 Plant assets 160,360 101,030 Accumulated depreciation-plant assets (55,790) (18,940) Total $370,620 $161,470 Liabilities and Owners' Equity Current liabilities $16,910 $23,570 Mortgage notes payable 40,080 Common stock, $10 par value 112,700 111,200 Other contributed capital 125,210 15,650 Retained earnings 75,720 11,050 Total $370,620 $161,470 Prepare a consolidated balance sheet workpaper as of January 1, 2024. Cash WINDSOR COMPANY AND SUBSIDIARY SHERIDAN Consolidated Balance Sheet Workpaper January 1, 2024 Windsor Sheridan Eliminations Noncontrolling Consolidated Company Company Debit Credit Interest Balance 40.850…
Adams Corporation acquired 90 percent of the outstanding voting shares of Barstow, Inc., on December 31, 2019. Adams paid a total of $603,000 in cash for these shares. The 10 percent noncontrolling interest shares traded on a daily basis at fair value of $67,000 both before and after Adams's acquisition. On December 31, 2019, Barstow had the following account balances: Current assets Land Buildings (10-year remaining life) Equipment (5-year remaining life) Patents (10-year remaining life) Notes payable (due in years) Common stock Retained earnings, 12/31/19 Debits Current assets Land Buildings. Equipment Investment in Barstow, Inc. Cost of goods sold Depreciation expense December 31, 2021, adjusted trial balances for the two companies follow: Adams Corporation Interest expense Dividends declared Total debits Credits Notes payable Common stock Retained earnings, 1/1/21 Revenues Investment income Total credits Book Value $ 160,000 120,000 220,000 160,000 $ 0 (200,000) (180,000) (280,000)…

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

Auditing: A Risk Based-Approach (MindTap Course L…

Accounting

ISBN:

9781337619455

Author:

Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:

Cengage Learning

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

Auditing: A Risk Based-Approach (MindTap Course L…

Accounting

ISBN:

9781337619455

Author:

Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:

Cengage Learning

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Auditing: A Risk Based-Approach to Conducting a Q…

Accounting

ISBN:

9781305080577

Author:

Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:

South-Western College Pub

SEE MORE TEXTBOOKS