Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Tyler Company acquired all of Jasmine Company's outstanding stock on January 1, 2019, for $286,400 in cash. Jasmine had a book
value of only $220,000 on that date. However, equipment (having an eight-year remaining life) was undervalued by $60,000 on
Jasmine's financial records. A building with a 20-year remaining life was overvalued by $15,700. Subsequent to the acquisition,
Jasmine reported the following:
2019
2020
2021
In accounting for this investment, Tyler has used the equity method. Selected accounts taken from the financial records of these two
companies as of December 31, 2021, follow:
Revenues-operating
Net Income
$ 74,400
62,500
47,800
Expenses
Equipment (net)
Buildings (net)
Common stock
Retained earnings, 12/31/21
a.
b.
C.
d.
Dividends
Declared
$10,000
40,000
20,000
e.
f.
Determine the following account balances as of December 31, 2021: (Input all amounts as positive values.)
Investment in Jasmine Company
Equity in Subsidiary Earnings
Consolidated Net Income
Consolidated…
Haresh
Tyler Company acquired all of Jasmine Company’s outstanding stock on January 1, 2022, for $274,700 in cash. Jasmine had a book value of only $204,900 on that date. However, equipment (having an eight-year remaining life) was undervalued by $71,200 on Jasmine’s financial records. A building with a 20-year remaining life was overvalued by $15,400. Subsequent to the acquisition, Jasmine reported the following:
Year
Net Income
Dividends Declared
2022
$ 73,800
$ 10,000
2023
74,500
40,000
2024
39,000
20,000
In accounting for this investment, Tyler has used the equity method. Selected accounts taken from the financial records of these two companies as of December 31, 2024, follow:
Accounts
Tyler Company
Jasmine Company
Revenues—operating
$ (430,000)
$ (195,000)
Expenses
215,000
156,000
Equipment (net)
462,000
97,500
Buildings (net)
340,000
93,600
Common stock
(290,000)
(64,500)
Retained earnings, 12/31/24
(446,000)
(225,000)
Required:
Determine the following…
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