ADVANCED FIN. ACCT. LL W/ACCESS>CUSTOM<
12th Edition
ISBN: 9781265074623
Author: Christensen
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 1.4.1E
To determine
Introduction:
Transfer of assets in case of consolidation: The transfer of assets is at book value in case of holding and subsidiary unless stated otherwise in the question.
The value at which the subsidiary company should record the assets in its book from among the 4 alternatives.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Questions
1. Assuming at the date of acquisition, the fair value of all the assets of CONVEX Ltd. were the same as
their carrying amounts with the exception of one of its equipment. This had a fair value of $2million. The book value of this equipment was $1.6 million before the acquisition. As a result of the fair valuation, the useful life of the equipment has been reviewed to 10 years remaining life. How will you treat this?
2. Assuming at the acquisition date, CONVEX Ltd. paid $20 million cash and promised to pay additional $2 million if the vaccine production is successful. However, the value of net assets of CONCAVE Ltd. was just $16 million.
How will you treat this in account?
In a prior year, a wholly-owned subsidiary sold land costing $100,000 to its parent for $125,000. In the current year,
the parent sold the land to an outside company for $170,000. On a working paper prepared to consolidate the
accounts of the parent and its subsidiary at the end of the current year, the eliminating entry connected with this land
sale includes
Select one:
a. a $25,000 debit to the investment in subsidiary account
b. a $45,000 debit to beginning retained earnings
c. a $25,000 credit to gain on sale of land
Od. no entry; the land is no longer in the consolidated entity
O
O
ff
Chapter 1 Solutions
ADVANCED FIN. ACCT. LL W/ACCESS>CUSTOM<
Ch. 1 - What types of circumstances would encourage...Ch. 1 - How would the decision to dispose of a segment of...Ch. 1 - Prob. 1.3QCh. 1 - Prob. 1.4QCh. 1 - Prob. 1.5QCh. 1 - Prob. 1.6QCh. 1 - Prob. 1.7QCh. 1 - Prob. 1.8QCh. 1 - Prob. 1.9QCh. 1 - Prob. 1.10Q
Ch. 1 - Prob. 1.11QCh. 1 - Prob. 1.12QCh. 1 - Prob. 1.13QCh. 1 - Prob. 1.14QCh. 1 - Within the measurement period following a business...Ch. 1 - Prob. 1.16QCh. 1 - Prob. 1.1CCh. 1 - Prob. 1.2CCh. 1 - Prob. 1.3CCh. 1 - Prob. 1.4CCh. 1 - Risks Associated with Acquisitions Not all...Ch. 1 - Prob. 1.6CCh. 1 - Prob. 1.1.1ECh. 1 - Prob. 1.1.2ECh. 1 - Prob. 1.1.3ECh. 1 - Multiple-Choice Questions on Complex Organizations...Ch. 1 - Prob. 1.1.5ECh. 1 - Prob. 1.2.1ECh. 1 - Prob. 1.2.2ECh. 1 - Multiple-Choice Questions on Recording Business...Ch. 1 - Prob. 1.2.4ECh. 1 - Multiple-Choice Questions on Recording Business...Ch. 1 - Multiple-Choice Questions on Reported Balances...Ch. 1 - Multiple-Choice Questions on Reported Balances...Ch. 1 - Prob. 1.3.3ECh. 1 - Prob. 1.3.4ECh. 1 - Prob. 1.4.1ECh. 1 - Prob. 1.4.2ECh. 1 - Prob. 1.4.3ECh. 1 - Multiple-Choice Questions Involving Account...Ch. 1 - Prob. 1.4.5ECh. 1 - Prob. 1.5ECh. 1 - Prob. 1.6ECh. 1 - Prob. 1.7ECh. 1 - Prob. 1.8ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.10ECh. 1 - Balances Reported Following Combination Palm...Ch. 1 - Goodwill Recognition Spur Corporation reported the...Ch. 1 - Acquisition Using Debentures Planter Corporation...Ch. 1 - Bargain Purchase Using the data resented in E1-13,...Ch. 1 - Prob. 1.15ECh. 1 - Prob. 1.16ECh. 1 - Prob. 1.17ECh. 1 - Prob. 1.18ECh. 1 - Prob. 1.19ECh. 1 - Prob. 1.20ECh. 1 - Prob. 1.21ECh. 1 - Prob. 1.22ECh. 1 - Prob. 1.23ECh. 1 - Prob. 1.24PCh. 1 - Prob. 1.25PCh. 1 - Prob. 1.26PCh. 1 - Acquisition in Multiple Steps Peal Corporation...Ch. 1 - Prob. 1.28PCh. 1 - Prob. 1.29PCh. 1 - Prob. 1.30PCh. 1 - Prob. 1.31PCh. 1 - Computation of Account Balances Saspro Division is...Ch. 1 - Prob. 1.33PCh. 1 - Prob. 1.34PCh. 1 - Prob. 1.35PCh. 1 - Business Combination Following are the balance...Ch. 1 - Prob. 1.37PCh. 1 - Prob. 1.38PCh. 1 - Prob. 1.39PCh. 1 - Prob. 1.40P
Knowledge Booster
Similar questions
- Dynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items: Patent with 4 remaining years of legal life Goodwill Required: a. Compute the annual amortization expense for these items. $ 39,800 44,000 b. Record the acquisition of the intangible assets and the related amortization expense for Year 1 in a horizontal statements model. Complete this question by entering your answers in the tabs below. Required A Required B Record the acquisition of the intangible assets and the related amortization expense for Year 1 in a horizontal statements model. Note: In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, and FA for financing activity. Enter any decreases to outflows with a minus sign. Not all cells require input. Round final answers to the nearest whole dollar amount. DYNAMO MANUFACTURING Horizontal Statements Model Balance Sheet Income Statement…arrow_forwardCan you explain in detail why the answer is A please?arrow_forwardDynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items: Patent with 4 remaining years of legal life $ 31,000 Goodwill 42,000 Dynamo’s financial condition just prior to the acquisition of these assets is shown in Required B. Required Compute the annual amortization expense for these items. Record the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model.arrow_forward
- Subject : Accountingarrow_forwardSontag Corporation’s net assets have fair values as described below. Fair Value Current assets $250,000 Land 800,000 Buildings and equipment 1,000,000 Loans payable (300,000) The Pratt Company pays $3,000,000 for Sontag Corporation, and records the acquisition as a merger. Pratt Company determines that identifiable intangibles valued at $1,500,000, not previously reported on Sontag’s books, also are recognized as acquired assets. Required a. Prepare a schedule to calculate the gain on acquisition. Use a negative sign with any answer that reduces the fair value of net assets (left column only). Price paid Answer Fair value of identifiable net assets: Current assets 250,000 Land Answer Buildings and equipment Answer Identifiable intangibles Answer Loans payable Answer Answer Gain on acquisition Answerarrow_forwardcould you answer part B please? Pagle Corporation established a subsidiary to enter into a new line of business considered to be substantially more risky than Pagle's current business. Pagle transferred the following assets and accounts payable to Sand Corporation in exchange for 5,000 shares of $10 par value stock of Sand: Cash Accounts Receivable Inventory Land Buildings and Equipment Accounts Payable Cost $ 30,000 45,000 60,000 20,000 300,000 10,000 Required B Book Value $ 30,000 40,000 60,000 20,000 260,000 10,000 Required: a. Prepare the journal entry that Pagle recorded for the transfer of assets and accounts payable to Sand. b. Prepare the journal entry that Sand recorded for receipt of the assets and accounts payable from Pagle. Complete this question by entering your answers in the tabs below. Required A Prepare the journal entry that Sand recorded for receipt of the assets and accounts payable from Pagle. Note: If no entry is required for a transaction/event, select "No…arrow_forward
- Provide a detailed answer.arrow_forward1. Entity A, a government entity, acquires a machine for $10,000 on November 1, 20x1, on account, and settles the account on January 3, 20x2. The machine is estimated to have a useful life of 5 years and a residual value of 5% of cost. Entity A uses the straight line method of depreciation. The exchange rates are as follows. November 1, 20x1 $1 P50 December 31 20x1 $1 P40 January 3 20x2 $1P45 How much is the net foreign exchange gain (loss) recognized in surplus or deficit from the transaction?| a. P10.000 C. (P5 000) b. (P10,000) d. P5000arrow_forwardJarrow_forward
- High, a parent company, acquired Low, an unincorporated entity, for $2,800,000. A fair value exercise performed on Low's net assets at the date of purchase showed: $'000 Property, plant and equipment 3,000 Identifiable intangible asset 500 Inventory 300 Trade receivables less payables 200 4,000 How should the purchase of Low be reflected in High's consolidated statement of financial position? Record the net assets at their values shown above and credit profit or loss with $1,200,000 Record the net assets at their values shown above and credit High's consolidated goodwill with $1,200,000 Write off the intangible asset ($500,000), record the remaining net assets at their values shown above and credit profit or loss with $700,000,000 Record the purchase as a financial asset investment at $2,800,000arrow_forwardDynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items: Patent with 4 remaining years of legal life Goodwill Dynamo's financial condition just prior to the acquisition of these assets is shown in Required B. Required a. Compute the annual amortization expense for these items. b. Record the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model. Complete this question by entering your answers in the tabs below. Required A Required B Record the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model. (In the Cash Flo operating activities, FA for financing activities, or IA for investing activity. Leave the cell blank if there is no effect. Enter any decreases to accoun all cells will require entry.) Event Acquisition Amortization Cash + 86,400 + + + Balance Sheet Assets Patent + Goodwill $…arrow_forwardPreston Company acquired the assets (except for cash) and assumed the liabilities of Saville Company. Immediately prior to the acquisition, Saville Company’s balance sheet was as follows: Book Value Fair Value Cash $129,480 $129,480 Receivables (net) 177,290 209,150 Inventory 362,130 412,850 Plant and equipment (net) 485,520 490,050 Land 440,090 647,770 Total assets $1,594,510 $1,889,300 Current Liabilities $586,310 $568,060 Common stock ($5 par value) 486,050 Other contributed capital 122,210 Retained earnings 399,940 Total equities $1,594,510 (a) Prepare the journal entries on the books of Preston Company to record the purchase of the assets and assumption of the liabilities of Saville Company if the amount paid was $1,428,550 in cash. (If no entry is required, select "No Entry" for the account titles and enter 0 for the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning