FUNDAMENTALS OF FINANCIAL ACCOUNTING LL
6th Edition
ISBN: 9781265554927
Author: PHILLIPS
Publisher: MCG
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Textbook Question
Chapter 4, Problem 6Q
Explain the differences between
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On May 31, 2026, Oriole Company paid $3,290,000 to acquire all of the common stock of Pharoah Corporation, which became a
division of Oriole. Pharoah reported the following balance sheet at the time of the acquisition:
Current assets
$846,000
Current liabilities
$564,000
Noncurrent assets
2,538,000
Long-term liabilities
470,000
Stockholder's equity
2,350,000
Total assets
$3,384,000
Total liabilities and stockholder's equity
$3,384,000
It was determined at the date of the purchase that the fair value of the identifiable net assets of Pharoah was $2,914,000. At
December 31, 2026, Pharoah reports the following balance sheet information:
Current assets
$752,000
Noncurrent assets (including goodwill recognized in purchase)
2,256,000
Current liabilities
(658,000)
Long-term liabilities
(470,000)
Net assets
$1,880,000
It is determined that the fair value of the Pharoah division is $2,068,000.
On May 31, 2026, Oriole Company paid $3,290,000 to acquire all of the common stock of Pharoah Corporation, which became a
division of Oriole. Pharoah reported the following balance sheet at the time of the acquisition:
Current assets
$846,000
Current liabilities
$564,000
Noncurrent assets
2,538,000
Long-term liabilities
470,000
Stockholder's equity
2,350,000
Total assets
$3,384,000
Total liabilities and stockholder's equity
$3,384,000
It was determined at the date of the purchase that the fair value of the identifiable net assets of Pharoah was $2,914,000. At
December 31, 2026, Pharoah reports the following balance sheet information:
Current assets
$752,000
Noncurrent assets (including goodwill recognized in purchase)
2,256,000
Current liabilities
(658,000)
Long-term liabilities
(470,000)
Net assets
$1,880,000
It is determined that the fair value of the Pharoah division is $2,068,000.
The following transactions involving intangible assets of Oriole Corporation occurred on or near December 31, 2025.
1.) Oriole paid Grand Company $520,000 for the exclusive right to market a particular product, using the Grand name and logo in promotional material. The franchise runs for as long as Oriole is in business.
2.) Oriole spent $654,000 developing a new manufacturing process. It has applied for a patent, and it believes that its application will be successful.
3.) In January 2026, Oriole's application for a patent (#2 above) was granted. Legal and registration costs incurred were $247,800. The patent runs for 20 years. The manufacturing process will be useful to Oriole for 10 years.
4.) Oriole incurred $168,000 in successfully defending one of its patents in an infringement suit. The patent expires during December 2029.
5.) Oriole incurred $446,400 in an unsuccessful patent defense. As a result of the adverse verdict, the patent, with a remaining unamortized cost of…
Chapter 4 Solutions
FUNDAMENTALS OF FINANCIAL ACCOUNTING LL
Ch. 4 - Prob. 1QCh. 4 - Explain the relationships between adjustments and...Ch. 4 - Prob. 3QCh. 4 - Prob. 4QCh. 4 - What is a contra-asset? Give an example of one.Ch. 4 - Explain the differences between depreciation...Ch. 4 - What is an adjusted trial balance? What is its...Ch. 4 - On December 31, a company makes a 59,000 payment...Ch. 4 - Using the information in question 8, determine the...Ch. 4 - Using the information in question 8, prepare the...
Ch. 4 - What is the equation for each of the following...Ch. 4 - Prob. 12QCh. 4 - What is the purpose of closing journal entries?Ch. 4 - Prob. 14QCh. 4 - Prob. 15QCh. 4 - What is a post-closing trial balance? Is it a...Ch. 4 - The owner of a local business complains that the...Ch. 4 - Which of the following accounts would not appear...Ch. 4 - Which account is least likely to appear in an...Ch. 4 - When a concert promotions company collects cash...Ch. 4 - On December 31, an adjustments made to reduce...Ch. 4 - An adjusting journal entry to recognize accrued...Ch. 4 - Prob. 6MCCh. 4 - Company A has owned a building for several years....Ch. 4 - Which of the following trial balances is used as a...Ch. 4 - Assume the balance in Prepaid Insurance is 2,500...Ch. 4 - Assume a company receives a bill for 10,000 for...Ch. 4 - Prob. 1MECh. 4 - Understanding Concepts Related to Adjustments...Ch. 4 - Matching Transactions with Type of Adjustment...Ch. 4 - Recording Adjusting Journal Entries Using the...Ch. 4 - Determine Accounting Equation Effects of Deferral...Ch. 4 - Prob. 6MECh. 4 - Determining Accounting Equation Effects of Accrual...Ch. 4 - Recording Adjusting Journal Entries Using be...Ch. 4 - Preparing Journal Entries for Deferral...Ch. 4 - Preparing Journal Entries for Deferral...Ch. 4 - Preparing Journal Entries for Deferral and Accrual...Ch. 4 - Reporting Adjusted Account Balances Indicate...Ch. 4 - Preparing an Adjusted Trial Balance Macro Company...Ch. 4 - Reporting an Income Statement The Sky Blue...Ch. 4 - Reporting a Statement of Retained Earnings Refer...Ch. 4 - Prob. 16MECh. 4 - Recording Closing Journal Entries Refer to the...Ch. 4 - Preparing and Posting Adjusting Journal Entries At...Ch. 4 - Preparing and Posting Adjusting Journal Entries At...Ch. 4 - Prob. 20MECh. 4 - Prob. 21MECh. 4 - Prob. 22MECh. 4 - Prob. 23MECh. 4 - Prob. 24MECh. 4 - Prob. 25MECh. 4 - Prob. 26MECh. 4 - Prob. 1ECh. 4 - Identifying Adjustments and Preparing Financial...Ch. 4 - Prob. 3ECh. 4 - Determining Adjustments and Accounting Equation...Ch. 4 - Determining Adjustments and Accounting Equation...Ch. 4 - Determining Adjustments and Accounting Equation...Ch. 4 - Recording Adjusting Journal Entries Refer to E4-6....Ch. 4 - Recording Typical Adjusting Journal Entries...Ch. 4 - Determining Accounting Equation Effects of Typical...Ch. 4 - Determining Adjusted Income Statement Account...Ch. 4 - Reporting Depreciation The adjusted trial balance...Ch. 4 - Recording Transactions Including Adjusting and...Ch. 4 - Analyzing the Effects of Adjusting Journal Entries...Ch. 4 - Reporting an Adjusted Income Statement Dyer, Inc.,...Ch. 4 - Recording Adjusting Entries and Preparing an...Ch. 4 - Recording Four Adjusting Journal Entries and...Ch. 4 - Recording Four Adjusting Journal Entries and...Ch. 4 - Prob. 18ECh. 4 - Analyzing, Recording, and Summarizing Business...Ch. 4 - Preparing Adjusting Entries, an Adjusted Trial...Ch. 4 - Preparing an Adjusted Trial Balance, Closing...Ch. 4 - Analyzing and Recording Adjusting Journal Entries...Ch. 4 - Prob. 3CPCh. 4 - Identifying and Preparing Adjusting Journal...Ch. 4 - Preparing a Trial Balance, Closing Journal Entry,...Ch. 4 - Analyzing and Recording Adjusting Journal Entries...Ch. 4 - Prob. 3PACh. 4 - Identifying and Preparing Adjusting Journal...Ch. 4 - Preparing a Trial Balance, Closing Journal Entry,...Ch. 4 - Recording Adjusting Journal Entries Cactus...Ch. 4 - Determining Accounting Equation Effects of...Ch. 4 - Identifying and Preparing Adjusting Journal...Ch. 4 - From Recording Transactions to Preparing Accrual...Ch. 4 - Prob. 2COPCh. 4 - Recording Transactions (Including Adjusting...Ch. 4 - From Recording Transactions (Including Adjusting...Ch. 4 - From Recording Transactions to Preparing Accrual...Ch. 4 - Prob. 6COPCh. 4 - Finding Financial Information Refer to the...Ch. 4 - Prob. 2SDCCh. 4 - Ethical Decision Making: A Mini-Case Assume you...Ch. 4 - Adjusting the Accounting Records Assume it is now...
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- Reffering to fair value of an asset, division, or organization, What exactly is fair value and how is it assessed?arrow_forwardThe following transactions involving intangible assets of Oriole Corporation occurred on or near December 31, 2025. 1.) Oriole paid Grand Company $520,000 for the exclusive right to market a particular product, using the Grand name and logo in promotional material. The franchise runs for as long as Oriole is in business. 2.) Oriole spent $654,000 developing a new manufacturing process. It has applied for a patent, and it believes that its application will be successful. 3.) In January 2026, Oriole's application for a patent (#2 above) was granted. Legal and registration costs incurred were $247,800. The patent runs for 20 years. The manufacturing process will be useful to Oriole for 10 years. 4.) Oriole incurred $168,000 in successfully defending one of its patents in an infringement suit. The patent expires during December 2029. Oriole incurred 5.) $446,400 in an unsuccessful patent defense. As a result of the adverse verdict, the patent, with a remaining unamortized cost of…arrow_forwardNonearrow_forward
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