9 Trim Corporation acquired 100 percent of Round Corporation's voting common stock on January 1, 20X2, for $408,000.At that date, the book values and fair values of Round's assets and liabilities were equal. Round reported the followingsummarized balance sheet data:AssetsTotal$ 700,000Accounts PayableBonds PayableCommon StockRetained Earnings$ 700,000Total$ 95,000197,000124,000284,000$ 700,000Round reported net income of $74,000 for 20X2 and paid dividends of $22,000.Required:a. Give the journal entries recorded by Trim Corporation during 20X2 on its books if Trim accounts for its investment inRound using the equity method.b. Give the consolidation entries needed at December 31, 20X2, to prepare consolidated financial statements.

Step 1Accounts for its investment in Round using the equity method by recognizing its share of…

Answered: Trim Corporation acquired 100 percent…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 1BCRQ

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Trim Corporation acquired 100 percent of Round Corporation's voting common stock on January 1, 20X2, for $414,000. At that date, the book values and fair values of Round's assets and liabilities were equal. Round reported the following summarized balance sheet data: Assets $ 713,000 Accounts Payable Bonds Payable $ 104,000 195,000 Common Stock 128,000 Total $ 713,000 Retained Earnings Total 286,000 $ 713,000 Round reported net income of $79,000 for 20X2 and paid dividends of $26,000. Required: a. Give the journal entries recorded by Trim Corporation during 20X2 on its books if Trim accounts for its investment in Round using the equity method. b. Give the consolidation entries needed at December 31, 20X2, to prepare consolidated financial statements. Complete this question by enter
On January 1, 2XX1, Bargain Inc. acquired 100% of Wind Corporation for $9,750,000 cash. On that date, Willey's total stockholders' equity was $7,250,000. The following assets had fair values different from book values. Book Value Fair Value Buildings and Land $13,500,000 $14,500,000 Other Assets Bonds Payable 625,000 250,000 7,500,000 6,250,000 Required Prepare the [E] and [A] consolidation entries on the date of the acquisition: [E] Debit Credit [A] V (to record the [E] consolidation entry) (to record the [A] consolidation entry) Debit Credit
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On January 1, 2XX1, Bargain Inc. acquired 100% of Wind Corporation for $9,750,000 cash. On that date, Willey's total stockholders' equity was $7,250,000. The following assets had fair values different from book values. Book Value Fair Value Buildings and Land $13,500,000 $14,500,000 Other Assets 625,000 Bonds Payable 7,500,000 Required Prepare the [E] and [A] consolidation entries on the date of the acquisition: [E] Debit Credit 9,750,000 [A] Cash 250,000 6,250,000 Equity investment (to record the [E] consolidation entry) Buildings and land Other assets Goodwill Bonds payable Cash (to record the [A] consolidation entry). 0 Debit 14,500,000 250,000 4,000,000 0 0 0x 9,750,000 x Credit 0x 0x 0x 6,250,000 * 9,750,000 *
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