Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260110579
Author: Hoyle
Publisher: McGraw Hill Education
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Question
Chapter 2, Problem 26P
To determine
Find the consolidated balances for the following accounts.
a. Net income
b.
c. Patented technology
d.
e. Liabilities
f. Common stock
g. Additional paid-in capital.
Expert Solution & Answer
Answer to Problem 26P
| Accounts | Consolidated value | |
| a. | Net income | $ 210,000 |
| b. | Retained earnings, 1/1/17 | $ 800,000 |
| c. | Patented technology | $ 1,180,000 |
| d. | Goodwill | $ 50,000 |
| e. | Liabilities | $ 1,210,000 |
| f. | Common stock | $ 510,000 |
| g. | Additional paid-in capital | $ 680,000 |
Table: (1)
Explanation of Solution
The consolidated balances are as follows:
| Accounts | Book values in Company P | Fair values in Company S | Consolidated value | |
| a. | Net income (1) | $ 210,000 | ||
| b. | Retained earnings, 1/1/17 | $ 800,000 | $ 800,000 | |
| c. | Patented technology | $ 900,000 | $ 280,000 | $ 1,180,000 |
| d. | Goodwill (2) | $ 50,000 | ||
| e. | Liabilities (3) | $ 500,000 | $ 410,000 | $ 1,210,000 |
| f. | Common stock (4) | $ 510,000 | ||
| g. | Additional paid-in capital (5) | $ 680,000 |
Table: (2)
Working note:
Computation of net income:
Computation of Goodwill:
| Particulars | Amount | Amount |
|
Consideration paid | $ 900,000 | |
| Cash | $ 110,000 | |
| Receivables | $ 170,000 | |
| Patented Technology (net) | $ 280,000 | |
| Equipment (net) | $ 700,000 | |
| Liabilities | $ (410,000) | |
| Fair value of net identifiable assets | $ 850,000 | |
| Goodwill | $ 80,000 (2) | |
Table: (3)
Computation of liabilities:
Computation of Common Stock:
Computation of Additional paid-in capital:
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Chapter 2 Solutions
Soft Bound Version for Advanced Accounting 13th Edition
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Ch. 2 - Prob. 11QCh. 2 - Which of the following does not represent a...Ch. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4PCh. 2 - Prob. 5PCh. 2 - An acquired entity has a long-term operating lease...Ch. 2 - When does gain recognition accompany a business...Ch. 2 - Prob. 8PCh. 2 - Prob. 9PCh. 2 - Prob. 10PCh. 2 - On June 1, Cline Co. paid 800,000 cash for all of...Ch. 2 - On May 1, Donovan Company reported the following...Ch. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - Prob. 15PCh. 2 - Prob. 16PCh. 2 - On its acquisition-date consolidated balance...Ch. 2 - On its acquisition-date consolidated balance...Ch. 2 - Problems 19 and 20 are based on the following...Ch. 2 - In the December 31, 2017, consolidated balance...Ch. 2 - Prob. 21PCh. 2 - The following book and fair values were available...Ch. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 27PCh. 2 - Prob. 28PCh. 2 - Prob. 29PCh. 2 - Prob. 30PCh. 2 - Prob. 31PCh. 2 - SafeData Corporation has the following account...Ch. 2 - Prob. 33PCh. 2 - Prob. 34PCh. 2 - Prob. 35APACh. 2 - On February 1, Piscina Corporation completed a...Ch. 2 - Prob. 37APBCh. 2 - Prob. 38APBCh. 2 - Prob. 1DYSCh. 2 - Prob. 2DYSCh. 2 - Prob. 3DYSCh. 2 - Prob. 4DYS
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