Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation. To Explain : Journal entry recorded by P Corporation when it acquired S’s net assets.

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 1, Problem 1.30P

a.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: Journal entry recorded by P Corporation when it acquired S’s net assets.

a.

Expert Solution

Explanation of Solution

Following journal entry would be recorded:

In the books of P Corporation
Journal Entry Register
	Particulars	Debit	Credit
(1)	Merger Expense	178000
	To cash		178000
	Being legal fees paid recorded

(2)	Cash	20000
	Accounts Receivable	35,000
	Inventory	50,000
	Patents	60,000
	Building & Equipment	150,000
	Goodwill	38,000
	To Accounts Payable		55,000
	To Notes Payable		120,000
	Being purchase of S corporation recoded

b.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Prepare: a balance sheet for P immediately after acquisition.

b.

Expert Solution

Explanation of Solution

Combined Balance Sheet
February 1, 20X3
Liabilities	Amount	Assets	Amount
Accounts Payable	140,000	Cash	82,000
Notes Payable	270,000	Accounts Receivable	175,000
Common Stock	200,000	Inventory	220,000
Additional Paid in Capital	160,000	Patents	140,000
Retained Earnings	225,000	Buildings and Equipment	530,000
		Less: Accumulated Dep.	(190,000)
		Goodwill	38,000
Total	995,000	Total	995,000

c.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: journal entry to be recorded by P if it acquired all of S’s common Stock (instead of S’s net assets) for $178,000 .

c.

Expert Solution

Explanation of Solution

Journal entry to be recorded:

In the books of P Corporation
Journal Entry Register
	Particulars	Debit	Credit
	Investment in Zink Co.	178,000
	To Cash		178,000
	Being legal fees paid recorded

Note 1: Computation of Goodwill

Fair Value of consideration given: 178,000

Fair Value of net assets acquired:

(20,000+35,000+50,000+60,000+150,000−55,000−120,000)

Therefore, value of goodwill is 38,000 .

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Please help me correct my mistakes. for the T account of 2022 and 2023, the ONLY options for accounts names are blank, bad debt expense, collections, credit sales and write offs Jayco Inc. started its operations in 2022. Its sales during 2022, all on account, totalled $700,000. The company collected $500,000 in cash from customers during the year and wrote off $8,000 in uncollectible accounts. The company set up an allowance for doubtful accounts at December 31, 2022, its fiscal year-end, and determined the account balance to be $14,000. The unadjusted balances of selected accounts at December 31, 2023 are as follows: Accounts receivable $ 300,000 Allowance for doubtful accounts (debit) 10,000 Sales revenue (including 80 percent in sales on account) 800,000 Aging of the accounts receivable on December 31, 2023, resulted in an estimate of $11,000 in potentially uncollectible accounts. Required: 1. Prepare the journal entries to record all the…

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Answer 2

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 1, Problem 1.30P

a.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: Journal entry recorded by P Corporation when it acquired S’s net assets.

a.

Expert Solution

Explanation of Solution

Following journal entry would be recorded:

In the books of P Corporation
Journal Entry Register
	Particulars	Debit	Credit
(1)	Merger Expense	178000
	To cash		178000
	Being legal fees paid recorded

(2)	Cash	20000
	Accounts Receivable	35,000
	Inventory	50,000
	Patents	60,000
	Building & Equipment	150,000
	Goodwill	38,000
	To Accounts Payable		55,000
	To Notes Payable		120,000
	Being purchase of S corporation recoded

b.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Prepare: a balance sheet for P immediately after acquisition.

b.

Expert Solution

Explanation of Solution

Combined Balance Sheet
February 1, 20X3
Liabilities	Amount	Assets	Amount
Accounts Payable	140,000	Cash	82,000
Notes Payable	270,000	Accounts Receivable	175,000
Common Stock	200,000	Inventory	220,000
Additional Paid in Capital	160,000	Patents	140,000
Retained Earnings	225,000	Buildings and Equipment	530,000
		Less: Accumulated Dep.	(190,000)
		Goodwill	38,000
Total	995,000	Total	995,000

c.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: journal entry to be recorded by P if it acquired all of S’s common Stock (instead of S’s net assets) for $178,000 .

c.

Expert Solution

Explanation of Solution

Journal entry to be recorded:

In the books of P Corporation
Journal Entry Register
	Particulars	Debit	Credit
	Investment in Zink Co.	178,000
	To Cash		178,000
	Being legal fees paid recorded

Note 1: Computation of Goodwill

Fair Value of consideration given: 178,000

Fair Value of net assets acquired:

(20,000+35,000+50,000+60,000+150,000−55,000−120,000)

Therefore, value of goodwill is 38,000 .

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 1, Problem 1.30P

a.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: Journal entry recorded by P Corporation when it acquired S’s net assets.

a.

Expert Solution

Explanation of Solution

Following journal entry would be recorded:

In the books of P Corporation
Journal Entry Register
	Particulars	Debit	Credit
(1)	Merger Expense	178000
	To cash		178000
	Being legal fees paid recorded

(2)	Cash	20000
	Accounts Receivable	35,000
	Inventory	50,000
	Patents	60,000
	Building & Equipment	150,000
	Goodwill	38,000
	To Accounts Payable		55,000
	To Notes Payable		120,000
	Being purchase of S corporation recoded

b.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Prepare: a balance sheet for P immediately after acquisition.

b.

Expert Solution

Explanation of Solution

Combined Balance Sheet
February 1, 20X3
Liabilities	Amount	Assets	Amount
Accounts Payable	140,000	Cash	82,000
Notes Payable	270,000	Accounts Receivable	175,000
Common Stock	200,000	Inventory	220,000
Additional Paid in Capital	160,000	Patents	140,000
Retained Earnings	225,000	Buildings and Equipment	530,000
		Less: Accumulated Dep.	(190,000)
		Goodwill	38,000
Total	995,000	Total	995,000

c.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: journal entry to be recorded by P if it acquired all of S’s common Stock (instead of S’s net assets) for $178,000 .

c.

Expert Solution

Explanation of Solution

Journal entry to be recorded:

In the books of P Corporation
Journal Entry Register
	Particulars	Debit	Credit
	Investment in Zink Co.	178,000
	To Cash		178,000
	Being legal fees paid recorded

Note 1: Computation of Goodwill

Fair Value of consideration given: 178,000

Fair Value of net assets acquired:

(20,000+35,000+50,000+60,000+150,000−55,000−120,000)

Therefore, value of goodwill is 38,000 .

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 1, Problem 1.30P

a.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: Journal entry recorded by P Corporation when it acquired S’s net assets.

a.

Expert Solution

Explanation of Solution

Following journal entry would be recorded:

In the books of P Corporation
Journal Entry Register
	Particulars	Debit	Credit
(1)	Merger Expense	178000
	To cash		178000
	Being legal fees paid recorded

(2)	Cash	20000
	Accounts Receivable	35,000
	Inventory	50,000
	Patents	60,000
	Building & Equipment	150,000
	Goodwill	38,000
	To Accounts Payable		55,000
	To Notes Payable		120,000
	Being purchase of S corporation recoded

b.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Prepare: a balance sheet for P immediately after acquisition.

b.

Expert Solution

Explanation of Solution

Combined Balance Sheet
February 1, 20X3
Liabilities	Amount	Assets	Amount
Accounts Payable	140,000	Cash	82,000
Notes Payable	270,000	Accounts Receivable	175,000
Common Stock	200,000	Inventory	220,000
Additional Paid in Capital	160,000	Patents	140,000
Retained Earnings	225,000	Buildings and Equipment	530,000
		Less: Accumulated Dep.	(190,000)
		Goodwill	38,000
Total	995,000	Total	995,000

c.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: journal entry to be recorded by P if it acquired all of S’s common Stock (instead of S’s net assets) for $178,000 .

c.

Expert Solution

Explanation of Solution

Journal entry to be recorded:

In the books of P Corporation
Journal Entry Register
	Particulars	Debit	Credit
	Investment in Zink Co.	178,000
	To Cash		178,000
	Being legal fees paid recorded

Note 1: Computation of Goodwill

Fair Value of consideration given: 178,000

Fair Value of net assets acquired:

(20,000+35,000+50,000+60,000+150,000−55,000−120,000)

Therefore, value of goodwill is 38,000 .

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Answer 5

Chapter 1, Problem 1.30P

a.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: Journal entry recorded by P Corporation when it acquired S’s net assets.

a.

Expert Solution

Explanation of Solution

Following journal entry would be recorded:

In the books of P Corporation
Journal Entry Register
	Particulars	Debit	Credit
(1)	Merger Expense	178000
	To cash		178000
	Being legal fees paid recorded

(2)	Cash	20000
	Accounts Receivable	35,000
	Inventory	50,000
	Patents	60,000
	Building & Equipment	150,000
	Goodwill	38,000
	To Accounts Payable		55,000
	To Notes Payable		120,000
	Being purchase of S corporation recoded

b.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Prepare: a balance sheet for P immediately after acquisition.

b.

Expert Solution

Explanation of Solution

Combined Balance Sheet
February 1, 20X3
Liabilities	Amount	Assets	Amount
Accounts Payable	140,000	Cash	82,000
Notes Payable	270,000	Accounts Receivable	175,000
Common Stock	200,000	Inventory	220,000
Additional Paid in Capital	160,000	Patents	140,000
Retained Earnings	225,000	Buildings and Equipment	530,000
		Less: Accumulated Dep.	(190,000)
		Goodwill	38,000
Total	995,000	Total	995,000

c.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: journal entry to be recorded by P if it acquired all of S’s common Stock (instead of S’s net assets) for $178,000 .

c.

Expert Solution

Explanation of Solution

Journal entry to be recorded:

In the books of P Corporation
Journal Entry Register
	Particulars	Debit	Credit
	Investment in Zink Co.	178,000
	To Cash		178,000
	Being legal fees paid recorded

Note 1: Computation of Goodwill

Fair Value of consideration given: 178,000

Fair Value of net assets acquired:

(20,000+35,000+50,000+60,000+150,000−55,000−120,000)

Therefore, value of goodwill is 38,000 .

Answer 6

Chapter 1, Problem 1.30P

a.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: Journal entry recorded by P Corporation when it acquired S’s net assets.

a.

Expert Solution

Explanation of Solution

Following journal entry would be recorded:

In the books of P Corporation
Journal Entry Register
	Particulars	Debit	Credit
(1)	Merger Expense	178000
	To cash		178000
	Being legal fees paid recorded

(2)	Cash	20000
	Accounts Receivable	35,000
	Inventory	50,000
	Patents	60,000
	Building & Equipment	150,000
	Goodwill	38,000
	To Accounts Payable		55,000
	To Notes Payable		120,000
	Being purchase of S corporation recoded

Answer 7

Chapter 1, Problem 1.30P

a.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: Journal entry recorded by P Corporation when it acquired S’s net assets.

Answer 8

a.

Expert Solution

Explanation of Solution

Following journal entry would be recorded:

In the books of P Corporation
Journal Entry Register
	Particulars	Debit	Credit
(1)	Merger Expense	178000
	To cash		178000
	Being legal fees paid recorded

(2)	Cash	20000
	Accounts Receivable	35,000
	Inventory	50,000
	Patents	60,000
	Building & Equipment	150,000
	Goodwill	38,000
	To Accounts Payable		55,000
	To Notes Payable		120,000
	Being purchase of S corporation recoded

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

b.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Prepare: a balance sheet for P immediately after acquisition.

b.

Expert Solution

Explanation of Solution

Combined Balance Sheet
February 1, 20X3
Liabilities	Amount	Assets	Amount
Accounts Payable	140,000	Cash	82,000
Notes Payable	270,000	Accounts Receivable	175,000
Common Stock	200,000	Inventory	220,000
Additional Paid in Capital	160,000	Patents	140,000
Retained Earnings	225,000	Buildings and Equipment	530,000
		Less: Accumulated Dep.	(190,000)
		Goodwill	38,000
Total	995,000	Total	995,000

Answer 13

b.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Prepare: a balance sheet for P immediately after acquisition.

Answer 14

b.

Expert Solution

Explanation of Solution

Combined Balance Sheet
February 1, 20X3
Liabilities	Amount	Assets	Amount
Accounts Payable	140,000	Cash	82,000
Notes Payable	270,000	Accounts Receivable	175,000
Common Stock	200,000	Inventory	220,000
Additional Paid in Capital	160,000	Patents	140,000
Retained Earnings	225,000	Buildings and Equipment	530,000
		Less: Accumulated Dep.	(190,000)
		Goodwill	38,000
Total	995,000	Total	995,000

Answer 15

b.

Expert Solution

Answer 16

b.

Expert Solution

Answer 17

Expert Solution

Answer 18

c.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: journal entry to be recorded by P if it acquired all of S’s common Stock (instead of S’s net assets) for $178,000 .

c.

Expert Solution

Explanation of Solution

Journal entry to be recorded:

In the books of P Corporation
Journal Entry Register
	Particulars	Debit	Credit
	Investment in Zink Co.	178,000
	To Cash		178,000
	Being legal fees paid recorded

Note 1: Computation of Goodwill

Fair Value of consideration given: 178,000

Fair Value of net assets acquired:

(20,000+35,000+50,000+60,000+150,000−55,000−120,000)

Therefore, value of goodwill is 38,000 .

Answer 19

c.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: journal entry to be recorded by P if it acquired all of S’s common Stock (instead of S’s net assets) for $178,000 .

Answer 20

c.

Expert Solution

Explanation of Solution

Journal entry to be recorded:

In the books of P Corporation
Journal Entry Register
	Particulars	Debit	Credit
	Investment in Zink Co.	178,000
	To Cash		178,000
	Being legal fees paid recorded

Note 1: Computation of Goodwill

Fair Value of consideration given: 178,000

Fair Value of net assets acquired:

(20,000+35,000+50,000+60,000+150,000−55,000−120,000)

Therefore, value of goodwill is 38,000 .

Answer 21

c.

Expert Solution

Answer 22

c.

Expert Solution

Answer 23

Expert Solution

Answer 24

Ch. 1 - What types of circumstances would encourage...Ch. 1 - How would the decision to dispose of a segment of...Ch. 1 - Prob. 1.3Q Ch. 1 - Prob. 1.4Q Ch. 1 - Prob. 1.5Q Ch. 1 - Prob. 1.6Q Ch. 1 - Prob. 1.7Q Ch. 1 - Prob. 1.8Q Ch. 1 - Prob. 1.9Q Ch. 1 - Prob. 1.10Q

Concept explainers

Explanation of Solution

Explanation of Solution

Explanation of Solution

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