Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Question
Chapter 4, Problem 3P
To determine
Identify the appropriate answer for the given statement from the given choices.
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Brooks Company purchases debt investments as trading securities at a cost of $71,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $90,000. Brooks sells a portion of its trading securities (costing $35,500) for $40,250 cash. Analyze each transaction above by showing its effects on the accounting equation-specifically, identify the accounts and amounts (including + or -) for each transaction.
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[The following information applies to the questions displayed below.]
Brooks Company purchases debt investments as trading securities at a cost of $77,000 on December 27.
This is its first and only purchase of such securities. At December 31, these securities had a fair value of
$87,000.
Brooks sells a portion of its trading securities (costing $38,500) for $41,000 cash. Analyze each transaction above by
showing its effects on the accounting equation-specifically, identify the accounts and amounts (including + or -) for each
transaction.
3. On April 1, 20X2, Pack Company paid $800,000 for all of Sack Corporation's issued and outstanding common stock Sack's recorded assets and liabilities on April 1, 20X2, were as follows:
$ 80,000
240,000
Cash
Inventory
Property and equipment (net of accumulated
depreciation of $320,000)
Liabilities
On April 1, 20X2, Sack's inventory was determined to have a fair value of $190.000, and the property and equipment had a fair value of $560.000. What is the amount of goodwill resulting from the
business combination?
Multiple Choice
$180.000.
$0.
$50,000
480,000
(180,000)
$150.000.
Chapter 4 Solutions
Advanced Accounting
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