The condensed financial statements for Aylmer Inc and London Co for the year ended December 31, Year 5, are as follows:         On December 31, Year 5, after the above figures were prepared, Aylmer issued $375,000 in debt and 13,000 new shares to the owners of London for 75% of the outstanding shares of that company.  Aylmer shares had a fair value of $36.50 per share.   Aylmer paid $26,590 to a broker for arranging the transaction.  In addition, Aylmer paid $41,668 in stock issuance costs.              Required: 1.     Using the fair value enterprise method, what are the consolidated balances for the year ended December 31, Year 5, for the following accounts? (a) Cash (b) Retained earnings, 1/1/Year 5 (c) Equipment (d) Patented technology (e) Goodwill (f) Liabilities (g) Common shares (h) Non-controlling interests   2.     Using the identifiable net assets method, what are the consolidated balances for the year ended December 31, Year 5, for the following accounts? (a) Goodwill (b) Non-controlling interests.   Use excel to answer these questions.  Show calculations as necessary.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The condensed financial statements for Aylmer Inc and London Co for the year ended December 31, Year 5, are as follows:

 

 

 

 

On December 31, Year 5, after the above figures were prepared, Aylmer issued $375,000 in debt and 13,000 new shares to the owners of London for 75% of the outstanding shares of that company.  Aylmer shares had a fair value of $36.50 per share.

 

Aylmer paid $26,590 to a broker for arranging the transaction.  In addition, Aylmer paid $41,668 in stock issuance costs. 

 

 

 

 

 

 


Required:

1.     Using the fair value enterprise method, what are the consolidated balances for the year ended December 31, Year 5, for the following accounts?

(a)

Cash

(b)

Retained earnings, 1/1/Year 5

(c)

Equipment

(d)

Patented technology

(e)

Goodwill

(f)

Liabilities

(g)

Common shares

(h)

Non-controlling interests

 

2.     Using the identifiable net assets method, what are the consolidated balances for the year ended December 31, Year 5, for the following accounts?

(a)

Goodwill

(b)

Non-controlling interests.

 

Use excel to answer these questions.  Show calculations as necessary.  

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