Journal entries that Company F would record in case of transfer of its assets and accounts payable to Company K. Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

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Answer 1

Question

Chapter 1, Problem 1.7E

a.

To determine

To prepare: Journal entries that Company F would record in case of transfer of its assets and accounts payable to Company K.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

a.

Expert Solution

Explanation of Solution

In the books of Company F:

Record transfer of assets and liabilities:

Date	Account	Debit ($)	Credit($)
	Investment in Company K common stock	66,000
	Accumulated depreciation ($75,000−$47,000)	28,000
	Accounts Payable ($40,000−$18,000)	22,000
	Cash ($40,000−$25,000)		15,000
	Accounts Receivable ($65,000−$41,000)		24,000
	Inventory ($30,000−$21,000)		9,000
	Land ($15,000−$12,000)		3,000
	Depreciable Assets ($180,000−$115,000)		65,000
	(To record formation of subsidiary.)

Table (1)

Investment in Company K common stock is an asset and it is increased by $66,000. Therefore, Investment in Company K common stock account is debited with $66,000.

Accumulated depreciation is a contra asset and it is decreased by $40,000. Therefore, Accumulated depreciation account is debited with $40,000.

Accounts Payable is a liability and it is decreased by $22,000. Therefore, Accounts Payable account is debited with $22,000.

Cash is an asset and it is decreased by $15,000. Therefore, cash account is credited with $15,000.

Accounts Receivable is an asset and it is decreased by $24,000. Therefore, Accounts Receivable account is credited with $24,000.

Inventory is an asset and it is decreased by $9,000. Therefore, Inventory account is credited with $9,000.

Land is an asset and it is decreased by $3,000. Therefore, Land account is credited with $3,000.

Depreciable Asset is an asset and it is decreased by $65,000. Therefore, Depreciable Asset account is credited with $60,000.

b.

To determine

To prepare: Journal entries that subsidiary company would record.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

b.

Expert Solution

Explanation of Solution

In the books of subsidiary company:

Record transfer of assets and liabilities:

Date	Account	Debit ($)	Credit($)
	Cash	15,000
	Accounts Receivable	24,000
	Inventory	9,000
	Land	3,000
	Depreciable Assets	65,000
	Accumulated depreciation ($75,000−$47,000)		28,000
	Accounts Payable		22,000
	Common Stock		48,000
	Additional paid in capital (15,000+24,000+9,000+3,000+65,000−28,000−22,000−48,000−18,000)		18,000
	(To record receipt of assets and liabilities and issuance of stock.)

Table (2)

Cash is an asset and it is increased by $15,000. Therefore, cash account is debited with $15,000.

Accounts Receivable is an asset and it is increased by $24,000. Therefore, Accounts Receivable account is debited with $24,000.

Inventory is an asset and it is increased by $9,000. Therefore, Inventory account is debited with $9,000.

Land is an asset and it is increased by $3,000. Therefore, Land account is debited with $3,000.

Depreciable Assets is an asset and it is increased by $65,000. Therefore, Depreciable Assets account is debited with $65,000.

Accumulated depreciation is a contra asset and it is increased by $28,000. Therefore, Accumulated depreciation account is credited with $28,000.

Accounts Payable is a contra asset and it is increased by $22,000. Therefore, Accounts Payable account is credited with $22,000.

Common Stock is equity and it is increased by $48,000. Therefore, Common Stock account is credited with $48,000.

Additional paid in capital is equity and it is increased by $18,000. Therefore, Additional paid in capital account is credited with $18,000.

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Students have asked these similar questions

Asset acquisition vs. stock acquisition (fair value is different from book value) The following financial statement information is for an investor company and an investee company on January 1, 2013. On January 1, 2013, the investor company's common stock had a traded market value of $17.5 per share, and the investee company's common stock had a traded market value of $15.5 per share. Book Values Fair Values Investor Investee Investor Investee Receivables & inventories $50,000 $25,000 $45,000 $22,500 100.000 50,000 150,000 75.000 112,500 50,000 125,000 65,000 75.000 40,000 $262,500 $125,000 $395,000 $202,500 $75,000 $40,000 $90,000 $47,500 10.000 5,000 140,000 75,000 37.500 5,000 $262,500 $125,000 $187,500 $85,000 $305,000 $155,000 Land Property & equipment Trademarks & patents Total assets Liabilities Common stock ($1 par) Additional paid-in capital Retained earnings Total liabilities & equity Net assets Required (Parts a. and b. are independent of each other.)

(a) Prepare a consolidated statement of financial position in order of liquidity ie starting with cash at the date of acquisition under each of the following: (i) Identifiable net assets method

Prepare the set of consolidated financial statements at the end of the year.

Answer 2

Question

Chapter 1, Problem 1.7E

a.

To determine

To prepare: Journal entries that Company F would record in case of transfer of its assets and accounts payable to Company K.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

a.

Expert Solution

Explanation of Solution

In the books of Company F:

Record transfer of assets and liabilities:

Date	Account	Debit ($)	Credit($)
	Investment in Company K common stock	66,000
	Accumulated depreciation ($75,000−$47,000)	28,000
	Accounts Payable ($40,000−$18,000)	22,000
	Cash ($40,000−$25,000)		15,000
	Accounts Receivable ($65,000−$41,000)		24,000
	Inventory ($30,000−$21,000)		9,000
	Land ($15,000−$12,000)		3,000
	Depreciable Assets ($180,000−$115,000)		65,000
	(To record formation of subsidiary.)

Table (1)

Investment in Company K common stock is an asset and it is increased by $66,000. Therefore, Investment in Company K common stock account is debited with $66,000.

Accumulated depreciation is a contra asset and it is decreased by $40,000. Therefore, Accumulated depreciation account is debited with $40,000.

Accounts Payable is a liability and it is decreased by $22,000. Therefore, Accounts Payable account is debited with $22,000.

Cash is an asset and it is decreased by $15,000. Therefore, cash account is credited with $15,000.

Accounts Receivable is an asset and it is decreased by $24,000. Therefore, Accounts Receivable account is credited with $24,000.

Inventory is an asset and it is decreased by $9,000. Therefore, Inventory account is credited with $9,000.

Land is an asset and it is decreased by $3,000. Therefore, Land account is credited with $3,000.

Depreciable Asset is an asset and it is decreased by $65,000. Therefore, Depreciable Asset account is credited with $60,000.

b.

To determine

To prepare: Journal entries that subsidiary company would record.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

b.

Expert Solution

Explanation of Solution

In the books of subsidiary company:

Record transfer of assets and liabilities:

Date	Account	Debit ($)	Credit($)
	Cash	15,000
	Accounts Receivable	24,000
	Inventory	9,000
	Land	3,000
	Depreciable Assets	65,000
	Accumulated depreciation ($75,000−$47,000)		28,000
	Accounts Payable		22,000
	Common Stock		48,000
	Additional paid in capital (15,000+24,000+9,000+3,000+65,000−28,000−22,000−48,000−18,000)		18,000
	(To record receipt of assets and liabilities and issuance of stock.)

Table (2)

Cash is an asset and it is increased by $15,000. Therefore, cash account is debited with $15,000.

Accounts Receivable is an asset and it is increased by $24,000. Therefore, Accounts Receivable account is debited with $24,000.

Inventory is an asset and it is increased by $9,000. Therefore, Inventory account is debited with $9,000.

Land is an asset and it is increased by $3,000. Therefore, Land account is debited with $3,000.

Depreciable Assets is an asset and it is increased by $65,000. Therefore, Depreciable Assets account is debited with $65,000.

Accumulated depreciation is a contra asset and it is increased by $28,000. Therefore, Accumulated depreciation account is credited with $28,000.

Accounts Payable is a contra asset and it is increased by $22,000. Therefore, Accounts Payable account is credited with $22,000.

Common Stock is equity and it is increased by $48,000. Therefore, Common Stock account is credited with $48,000.

Additional paid in capital is equity and it is increased by $18,000. Therefore, Additional paid in capital account is credited with $18,000.

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Answer 3

Question

Chapter 1, Problem 1.7E

a.

To determine

To prepare: Journal entries that Company F would record in case of transfer of its assets and accounts payable to Company K.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

a.

Expert Solution

Explanation of Solution

In the books of Company F:

Record transfer of assets and liabilities:

Date	Account	Debit ($)	Credit($)
	Investment in Company K common stock	66,000
	Accumulated depreciation ($75,000−$47,000)	28,000
	Accounts Payable ($40,000−$18,000)	22,000
	Cash ($40,000−$25,000)		15,000
	Accounts Receivable ($65,000−$41,000)		24,000
	Inventory ($30,000−$21,000)		9,000
	Land ($15,000−$12,000)		3,000
	Depreciable Assets ($180,000−$115,000)		65,000
	(To record formation of subsidiary.)

Table (1)

Investment in Company K common stock is an asset and it is increased by $66,000. Therefore, Investment in Company K common stock account is debited with $66,000.

Accumulated depreciation is a contra asset and it is decreased by $40,000. Therefore, Accumulated depreciation account is debited with $40,000.

Accounts Payable is a liability and it is decreased by $22,000. Therefore, Accounts Payable account is debited with $22,000.

Cash is an asset and it is decreased by $15,000. Therefore, cash account is credited with $15,000.

Accounts Receivable is an asset and it is decreased by $24,000. Therefore, Accounts Receivable account is credited with $24,000.

Inventory is an asset and it is decreased by $9,000. Therefore, Inventory account is credited with $9,000.

Land is an asset and it is decreased by $3,000. Therefore, Land account is credited with $3,000.

Depreciable Asset is an asset and it is decreased by $65,000. Therefore, Depreciable Asset account is credited with $60,000.

b.

To determine

To prepare: Journal entries that subsidiary company would record.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

b.

Expert Solution

Explanation of Solution

In the books of subsidiary company:

Record transfer of assets and liabilities:

Date	Account	Debit ($)	Credit($)
	Cash	15,000
	Accounts Receivable	24,000
	Inventory	9,000
	Land	3,000
	Depreciable Assets	65,000
	Accumulated depreciation ($75,000−$47,000)		28,000
	Accounts Payable		22,000
	Common Stock		48,000
	Additional paid in capital (15,000+24,000+9,000+3,000+65,000−28,000−22,000−48,000−18,000)		18,000
	(To record receipt of assets and liabilities and issuance of stock.)

Table (2)

Cash is an asset and it is increased by $15,000. Therefore, cash account is debited with $15,000.

Accounts Receivable is an asset and it is increased by $24,000. Therefore, Accounts Receivable account is debited with $24,000.

Inventory is an asset and it is increased by $9,000. Therefore, Inventory account is debited with $9,000.

Land is an asset and it is increased by $3,000. Therefore, Land account is debited with $3,000.

Depreciable Assets is an asset and it is increased by $65,000. Therefore, Depreciable Assets account is debited with $65,000.

Accumulated depreciation is a contra asset and it is increased by $28,000. Therefore, Accumulated depreciation account is credited with $28,000.

Accounts Payable is a contra asset and it is increased by $22,000. Therefore, Accounts Payable account is credited with $22,000.

Common Stock is equity and it is increased by $48,000. Therefore, Common Stock account is credited with $48,000.

Additional paid in capital is equity and it is increased by $18,000. Therefore, Additional paid in capital account is credited with $18,000.

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Answer 4

Question

Chapter 1, Problem 1.7E

a.

To determine

To prepare: Journal entries that Company F would record in case of transfer of its assets and accounts payable to Company K.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

a.

Expert Solution

Explanation of Solution

In the books of Company F:

Record transfer of assets and liabilities:

Date	Account	Debit ($)	Credit($)
	Investment in Company K common stock	66,000
	Accumulated depreciation ($75,000−$47,000)	28,000
	Accounts Payable ($40,000−$18,000)	22,000
	Cash ($40,000−$25,000)		15,000
	Accounts Receivable ($65,000−$41,000)		24,000
	Inventory ($30,000−$21,000)		9,000
	Land ($15,000−$12,000)		3,000
	Depreciable Assets ($180,000−$115,000)		65,000
	(To record formation of subsidiary.)

Table (1)

Investment in Company K common stock is an asset and it is increased by $66,000. Therefore, Investment in Company K common stock account is debited with $66,000.

Accumulated depreciation is a contra asset and it is decreased by $40,000. Therefore, Accumulated depreciation account is debited with $40,000.

Accounts Payable is a liability and it is decreased by $22,000. Therefore, Accounts Payable account is debited with $22,000.

Cash is an asset and it is decreased by $15,000. Therefore, cash account is credited with $15,000.

Accounts Receivable is an asset and it is decreased by $24,000. Therefore, Accounts Receivable account is credited with $24,000.

Inventory is an asset and it is decreased by $9,000. Therefore, Inventory account is credited with $9,000.

Land is an asset and it is decreased by $3,000. Therefore, Land account is credited with $3,000.

Depreciable Asset is an asset and it is decreased by $65,000. Therefore, Depreciable Asset account is credited with $60,000.

b.

To determine

To prepare: Journal entries that subsidiary company would record.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

b.

Expert Solution

Explanation of Solution

In the books of subsidiary company:

Record transfer of assets and liabilities:

Date	Account	Debit ($)	Credit($)
	Cash	15,000
	Accounts Receivable	24,000
	Inventory	9,000
	Land	3,000
	Depreciable Assets	65,000
	Accumulated depreciation ($75,000−$47,000)		28,000
	Accounts Payable		22,000
	Common Stock		48,000
	Additional paid in capital (15,000+24,000+9,000+3,000+65,000−28,000−22,000−48,000−18,000)		18,000
	(To record receipt of assets and liabilities and issuance of stock.)

Table (2)

Cash is an asset and it is increased by $15,000. Therefore, cash account is debited with $15,000.

Accounts Receivable is an asset and it is increased by $24,000. Therefore, Accounts Receivable account is debited with $24,000.

Inventory is an asset and it is increased by $9,000. Therefore, Inventory account is debited with $9,000.

Land is an asset and it is increased by $3,000. Therefore, Land account is debited with $3,000.

Depreciable Assets is an asset and it is increased by $65,000. Therefore, Depreciable Assets account is debited with $65,000.

Accumulated depreciation is a contra asset and it is increased by $28,000. Therefore, Accumulated depreciation account is credited with $28,000.

Accounts Payable is a contra asset and it is increased by $22,000. Therefore, Accounts Payable account is credited with $22,000.

Common Stock is equity and it is increased by $48,000. Therefore, Common Stock account is credited with $48,000.

Additional paid in capital is equity and it is increased by $18,000. Therefore, Additional paid in capital account is credited with $18,000.

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Answer 5

Chapter 1, Problem 1.7E

a.

To determine

To prepare: Journal entries that Company F would record in case of transfer of its assets and accounts payable to Company K.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

a.

Expert Solution

Explanation of Solution

In the books of Company F:

Record transfer of assets and liabilities:

Date	Account	Debit ($)	Credit($)
	Investment in Company K common stock	66,000
	Accumulated depreciation ($75,000−$47,000)	28,000
	Accounts Payable ($40,000−$18,000)	22,000
	Cash ($40,000−$25,000)		15,000
	Accounts Receivable ($65,000−$41,000)		24,000
	Inventory ($30,000−$21,000)		9,000
	Land ($15,000−$12,000)		3,000
	Depreciable Assets ($180,000−$115,000)		65,000
	(To record formation of subsidiary.)

Table (1)

Investment in Company K common stock is an asset and it is increased by $66,000. Therefore, Investment in Company K common stock account is debited with $66,000.

Accumulated depreciation is a contra asset and it is decreased by $40,000. Therefore, Accumulated depreciation account is debited with $40,000.

Accounts Payable is a liability and it is decreased by $22,000. Therefore, Accounts Payable account is debited with $22,000.

Cash is an asset and it is decreased by $15,000. Therefore, cash account is credited with $15,000.

Accounts Receivable is an asset and it is decreased by $24,000. Therefore, Accounts Receivable account is credited with $24,000.

Inventory is an asset and it is decreased by $9,000. Therefore, Inventory account is credited with $9,000.

Land is an asset and it is decreased by $3,000. Therefore, Land account is credited with $3,000.

Depreciable Asset is an asset and it is decreased by $65,000. Therefore, Depreciable Asset account is credited with $60,000.

b.

To determine

To prepare: Journal entries that subsidiary company would record.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

b.

Expert Solution

Explanation of Solution

In the books of subsidiary company:

Record transfer of assets and liabilities:

Date	Account	Debit ($)	Credit($)
	Cash	15,000
	Accounts Receivable	24,000
	Inventory	9,000
	Land	3,000
	Depreciable Assets	65,000
	Accumulated depreciation ($75,000−$47,000)		28,000
	Accounts Payable		22,000
	Common Stock		48,000
	Additional paid in capital (15,000+24,000+9,000+3,000+65,000−28,000−22,000−48,000−18,000)		18,000
	(To record receipt of assets and liabilities and issuance of stock.)

Table (2)

Cash is an asset and it is increased by $15,000. Therefore, cash account is debited with $15,000.

Accounts Receivable is an asset and it is increased by $24,000. Therefore, Accounts Receivable account is debited with $24,000.

Inventory is an asset and it is increased by $9,000. Therefore, Inventory account is debited with $9,000.

Land is an asset and it is increased by $3,000. Therefore, Land account is debited with $3,000.

Depreciable Assets is an asset and it is increased by $65,000. Therefore, Depreciable Assets account is debited with $65,000.

Accumulated depreciation is a contra asset and it is increased by $28,000. Therefore, Accumulated depreciation account is credited with $28,000.

Accounts Payable is a contra asset and it is increased by $22,000. Therefore, Accounts Payable account is credited with $22,000.

Common Stock is equity and it is increased by $48,000. Therefore, Common Stock account is credited with $48,000.

Additional paid in capital is equity and it is increased by $18,000. Therefore, Additional paid in capital account is credited with $18,000.

Answer 6

Chapter 1, Problem 1.7E

a.

To determine

To prepare: Journal entries that Company F would record in case of transfer of its assets and accounts payable to Company K.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

a.

Expert Solution

Explanation of Solution

In the books of Company F:

Record transfer of assets and liabilities:

Date	Account	Debit ($)	Credit($)
	Investment in Company K common stock	66,000
	Accumulated depreciation ($75,000−$47,000)	28,000
	Accounts Payable ($40,000−$18,000)	22,000
	Cash ($40,000−$25,000)		15,000
	Accounts Receivable ($65,000−$41,000)		24,000
	Inventory ($30,000−$21,000)		9,000
	Land ($15,000−$12,000)		3,000
	Depreciable Assets ($180,000−$115,000)		65,000
	(To record formation of subsidiary.)

Table (1)

Investment in Company K common stock is an asset and it is increased by $66,000. Therefore, Investment in Company K common stock account is debited with $66,000.

Accumulated depreciation is a contra asset and it is decreased by $40,000. Therefore, Accumulated depreciation account is debited with $40,000.

Accounts Payable is a liability and it is decreased by $22,000. Therefore, Accounts Payable account is debited with $22,000.

Cash is an asset and it is decreased by $15,000. Therefore, cash account is credited with $15,000.

Accounts Receivable is an asset and it is decreased by $24,000. Therefore, Accounts Receivable account is credited with $24,000.

Inventory is an asset and it is decreased by $9,000. Therefore, Inventory account is credited with $9,000.

Land is an asset and it is decreased by $3,000. Therefore, Land account is credited with $3,000.

Depreciable Asset is an asset and it is decreased by $65,000. Therefore, Depreciable Asset account is credited with $60,000.

Answer 7

Chapter 1, Problem 1.7E

a.

To determine

To prepare: Journal entries that Company F would record in case of transfer of its assets and accounts payable to Company K.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

Answer 8

a.

Expert Solution

Explanation of Solution

In the books of Company F:

Record transfer of assets and liabilities:

Date	Account	Debit ($)	Credit($)
	Investment in Company K common stock	66,000
	Accumulated depreciation ($75,000−$47,000)	28,000
	Accounts Payable ($40,000−$18,000)	22,000
	Cash ($40,000−$25,000)		15,000
	Accounts Receivable ($65,000−$41,000)		24,000
	Inventory ($30,000−$21,000)		9,000
	Land ($15,000−$12,000)		3,000
	Depreciable Assets ($180,000−$115,000)		65,000
	(To record formation of subsidiary.)

Table (1)

Investment in Company K common stock is an asset and it is increased by $66,000. Therefore, Investment in Company K common stock account is debited with $66,000.

Accumulated depreciation is a contra asset and it is decreased by $40,000. Therefore, Accumulated depreciation account is debited with $40,000.

Accounts Payable is a liability and it is decreased by $22,000. Therefore, Accounts Payable account is debited with $22,000.

Cash is an asset and it is decreased by $15,000. Therefore, cash account is credited with $15,000.

Accounts Receivable is an asset and it is decreased by $24,000. Therefore, Accounts Receivable account is credited with $24,000.

Inventory is an asset and it is decreased by $9,000. Therefore, Inventory account is credited with $9,000.

Land is an asset and it is decreased by $3,000. Therefore, Land account is credited with $3,000.

Depreciable Asset is an asset and it is decreased by $65,000. Therefore, Depreciable Asset account is credited with $60,000.

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

b.

To determine

To prepare: Journal entries that subsidiary company would record.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

b.

Expert Solution

Explanation of Solution

In the books of subsidiary company:

Record transfer of assets and liabilities:

Date	Account	Debit ($)	Credit($)
	Cash	15,000
	Accounts Receivable	24,000
	Inventory	9,000
	Land	3,000
	Depreciable Assets	65,000
	Accumulated depreciation ($75,000−$47,000)		28,000
	Accounts Payable		22,000
	Common Stock		48,000
	Additional paid in capital (15,000+24,000+9,000+3,000+65,000−28,000−22,000−48,000−18,000)		18,000
	(To record receipt of assets and liabilities and issuance of stock.)

Table (2)

Cash is an asset and it is increased by $15,000. Therefore, cash account is debited with $15,000.

Accounts Receivable is an asset and it is increased by $24,000. Therefore, Accounts Receivable account is debited with $24,000.

Inventory is an asset and it is increased by $9,000. Therefore, Inventory account is debited with $9,000.

Land is an asset and it is increased by $3,000. Therefore, Land account is debited with $3,000.

Depreciable Assets is an asset and it is increased by $65,000. Therefore, Depreciable Assets account is debited with $65,000.

Accumulated depreciation is a contra asset and it is increased by $28,000. Therefore, Accumulated depreciation account is credited with $28,000.

Accounts Payable is a contra asset and it is increased by $22,000. Therefore, Accounts Payable account is credited with $22,000.

Common Stock is equity and it is increased by $48,000. Therefore, Common Stock account is credited with $48,000.

Additional paid in capital is equity and it is increased by $18,000. Therefore, Additional paid in capital account is credited with $18,000.

Answer 13

b.

To determine

To prepare: Journal entries that subsidiary company would record.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

Answer 14

b.

Expert Solution

Explanation of Solution

In the books of subsidiary company:

Record transfer of assets and liabilities:

Date	Account	Debit ($)	Credit($)
	Cash	15,000
	Accounts Receivable	24,000
	Inventory	9,000
	Land	3,000
	Depreciable Assets	65,000
	Accumulated depreciation ($75,000−$47,000)		28,000
	Accounts Payable		22,000
	Common Stock		48,000
	Additional paid in capital (15,000+24,000+9,000+3,000+65,000−28,000−22,000−48,000−18,000)		18,000
	(To record receipt of assets and liabilities and issuance of stock.)

Table (2)

Cash is an asset and it is increased by $15,000. Therefore, cash account is debited with $15,000.

Accounts Receivable is an asset and it is increased by $24,000. Therefore, Accounts Receivable account is debited with $24,000.

Inventory is an asset and it is increased by $9,000. Therefore, Inventory account is debited with $9,000.

Land is an asset and it is increased by $3,000. Therefore, Land account is debited with $3,000.

Depreciable Assets is an asset and it is increased by $65,000. Therefore, Depreciable Assets account is debited with $65,000.

Accumulated depreciation is a contra asset and it is increased by $28,000. Therefore, Accumulated depreciation account is credited with $28,000.

Accounts Payable is a contra asset and it is increased by $22,000. Therefore, Accounts Payable account is credited with $22,000.

Common Stock is equity and it is increased by $48,000. Therefore, Common Stock account is credited with $48,000.

Additional paid in capital is equity and it is increased by $18,000. Therefore, Additional paid in capital account is credited with $18,000.

Answer 15

b.

Expert Solution

Answer 16

b.

Expert Solution

Answer 17

Expert Solution

Answer 18

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. 1.8Q Ch. 1 - Prob. 1.9Q Ch. 1 - Prob. 1.10Q Ch. 1 - Prob. 1.11Q

Concept explainers

Explanation of Solution

To prepare: Journal entries that subsidiary company would record.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

Explanation of Solution

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Chapter 1 Solutions

Concept explainers

Explanation of Solution

To prepare: Journal entries that subsidiary company would record. Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.

Explanation of Solution

Want to see more full solutions like this?

Chapter 1 Solutions

To prepare: Journal entries that subsidiary company would record.

Introduction: An asset is a resource owned by business either tangible or intangible form to produce economic value. It provides the future benefits to the business. It is used to increase the value of firm by providing benefits.