COLLEGE ACCOUNTING LOOSE-LEAF + CONNECT
16th Edition
ISBN: 9781265167943
Author: Haddock
Publisher: MCG
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Textbook Question
Chapter 5, Problem 1CTP
The Effect of Adjustments
Assume you are the accountant for Austin Industries. Ellis Austin, the owner of the company, is in a hurry to receive the financial statements for the year ended December 31, 2019, and asks you how soon they will be ready. You tell him you have just completed the
If the income statement were prepared using trial balance amounts, the net income would be $95,560. A review of the company's records reveals the following information:
- 1. Rent of $42,000 was paid on July 1, 2019, for 12 months.
- 2. Purchases of supplies during the year totaled $8,000. An inventory of supplies taken at year-end showed supplies on hand of $2,720.
- 3. The building was purchased three years ago and has an estimated life of 30 years.
- 4. No adjustments have been made to any of the accounts during the year.
Write a memo to Mr. Austin explaining the effect on the financial statements of omitting the adjustments. Indicate the change to net income that results from the adjusting entries.
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General Accounting question
Wilson Corporation acquires Greatbatch Company for $80 million cash in a merger. The balance sheets of both companies at the date of acquisition are as follows:
Balance Sheet
(in millions)
Wilson Greatbatch
Current assets $96 $8
Property and equipment 800 144
Intangibles 32 4.8
Total assets $928 $156.8
Current liabilities $40 $3.2
Long-term debt 640 104
Capital stock 80 19.2
Retained earnings 192 24
Accumulated other comprehensive income (loss) (24) 6.4
Total liabilities and equity $928 $156.8
Greatbatch's property and equipment is overvalued by $48 million, its reported intangibles are undervalued by $32 million, and it has unreported intangibles, in the form of customer databases and marketing agreements, valued at $11.2 million.
Required
Prepare Wilson's balance sheet immediately following the merger.
Use a negative sign with your answer for AOCI if the balance is a loss.
Not use ai solution given correct answer
Chapter 5 Solutions
COLLEGE ACCOUNTING LOOSE-LEAF + CONNECT
Ch. 5 - What are adjustments?Ch. 5 - Prob. 1.2SRQCh. 5 - Prob. 1.3SRQCh. 5 - Prob. 1.4SRECh. 5 - Prob. 1.5SRECh. 5 - Prob. 1.6SRACh. 5 - Prob. 2.1SRQCh. 5 - Prob. 2.2SRQCh. 5 - Prob. 2.3SRQCh. 5 - Prob. 2.4SRE
Ch. 5 - On a worksheet, the adjusted balance of the...Ch. 5 - Prob. 2.6SRACh. 5 - Prob. 1CSRCh. 5 - Prob. 2CSRCh. 5 - Prob. 3CSRCh. 5 - Prob. 4CSRCh. 5 - The Supplies account has a debit balance of 9,000...Ch. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - Prob. 3DQCh. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Prob. 8DQCh. 5 - What effect does each item in Question 8 have on...Ch. 5 - Why is it necessary to journalize and post...Ch. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - How does a contra asset account differ from a...Ch. 5 - Prob. 14DQCh. 5 - Prob. 1ECh. 5 - Prob. 2ECh. 5 - Prob. 3ECh. 5 - Prob. 4ECh. 5 - Journalizing and posting adjustments. Desoto...Ch. 5 - Prob. 1PACh. 5 - Prob. 2PACh. 5 - Prob. 3PACh. 5 - Prob. 4PACh. 5 - Prob. 1PBCh. 5 - Prob. 2PBCh. 5 - Prob. 3PBCh. 5 - Sam Nix owns Nix Estate Planning and Investments....Ch. 5 - The Effect of Adjustments Assume you are the...Ch. 5 - The account balances for the Patterson...Ch. 5 - Prob. 1MFCh. 5 - Prob. 2MFCh. 5 - Prob. 3MFCh. 5 - Prob. 4MFCh. 5 - Prob. 1ED
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