Advanced Accounting - Standalone book
12th Edition
ISBN: 9780077862220
Author: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 6, Problem 16P
On January 1, Coldwater Company has a net book value of $2,174,000 as follows:
| 2,000 |
$ 200,000 |
| 34,500 shares of common stock; par value $40 per share | 1,380,000 |
| 594,000 | |
| Total | $2,174,000 |
Westmont Company acquires all outstanding preferred shares for $214,000 and 60 percent of the common stock for $1,253,280. The acquisition-date fair value of the noncontrolling interest in Coldwater’s common stock was $835,520. Westmont believed that one of Coldwater’s buildings, with a 12-year remaining life, was undervalued by $63,600 on the company’s financial records.
What amount of consolidated
- a. $61,600
- b. $65,200
- c. $60,400
- d. $59,200
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
On January 1, Coldwater Company has a net book value of $1,780,000 as follows:
2,500 shares of preferred stock; par value $100 per share; cumulative, nonparticipating, nonvoting; call value $108 per share
$
250,000
24,500 shares of common stock; par value $40 per share
980,000
Retained earnings
550,000
Total
$
1,780,000
Westmont Company acquires all outstanding preferred shares for $268,800 and 60 percent of the common stock for $972,240. The acquisition-date fair value of the noncontrolling interest in Coldwater’s common stock was $648,160. Westmont believed that one of Coldwater’s buildings, with a 12-year remaining life, was undervalued by $52,200 on the company’s financial records.
What amount of consolidated goodwill would be recognized from this acquisition?
On January 1, 2018, Bast Co. had a net book value of $2,100,000 as follows:
Preferred stock, 2,000 shares $70 par value, cumulative, nonparticipating, nonvoting
$
140,000
Common stock, 22,400 shares $50 par value
1,120,000
Retained earnings
840,000
Total shareholders' equity
$
2,100,000
Fisher Co. acquired all of the outstanding preferred shares for $148,000 and 60% of the common stock for $1,281,000. Fisher believed that one of Bast's buildings, with a twelve-year life, was undervalued on the company's financial records by $70,000.
Required:What is the amount of goodwill to be recognized from this purchase?
On January 1, 2020, Leilanie Company reported the following shareholders' equity:
Share capital
1,500,000
Share premium
3,000,000
Retained earnings 5,000,000
The entity had 400,000 authorised shares of P5 par value, of which 300,000 shares were issued and outstanding.
On March 1, the entity acquired 50,000 shares for P10 per share to be held as treasury.
On July 1, the entity declared a property dividend of inventory payable on July 31. The inventory had a P1,200,000 carrying amount anda fair value of P1,500,000 on July 1
The net income for 2020 was P3,000,000.
How much is the appropriated retained earnings?
Select the correct response
O500,000
O 400.000
O 250,000
O 450,000
< Previous
Continue
Chapter 6 Solutions
Advanced Accounting - Standalone book
Ch. 6 - Prob. 1QCh. 6 - Prob. 2QCh. 6 - When is a firm required to consolidate the...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - How do noncontrolling interest balances affect the...Ch. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Prob. 17QCh. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Prob. 7PCh. 6 - Bens man Corporation is computing EPS. One of its...Ch. 6 - Prob. 9PCh. 6 - Prob. 10PCh. 6 - Prob. 11PCh. 6 - Prob. 12PCh. 6 - Prob. 13PCh. 6 - Prob. 14PCh. 6 - Prob. 15PCh. 6 - On January 1, Coldwater Company has a net book...Ch. 6 - Prob. 17PCh. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 20PCh. 6 - Prob. 21PCh. 6 - Prob. 22PCh. 6 - Prob. 23PCh. 6 - Prob. 24PCh. 6 - Prob. 25PCh. 6 - Prob. 26PCh. 6 - Prob. 27PCh. 6 - Prob. 28PCh. 6 - Prob. 29PCh. 6 - Prob. 30PCh. 6 - Prob. 31PCh. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - Prob. 35PCh. 6 - Prob. 36PCh. 6 - Prob. 37PCh. 6 - Prob. 38PCh. 6 - Prob. 39PCh. 6 - Prob. 40PCh. 6 - Prob. 41PCh. 6 - Prob. 42PCh. 6 - Prob. 43PCh. 6 - Prob. 44PCh. 6 - Prob. 45PCh. 6 - Prob. 46PCh. 6 - Prob. 47PCh. 6 - Prob. 48PCh. 6 - Prob. 1DYSCh. 6 - Prob. 2DYSCh. 6 - The FASB ASC Subtopic Variable Interest Entities...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Silva Company is authorized to issue 5,000,000 shares of $2 par value common stock. In its IPO, the company has the following transaction: Mar. 1, issued 500,000 shares of stock at $15.75 per share for cash to investors. Journalize this transaction.arrow_forwardSelected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows: a. Issued 15,000 shares of 20 par common stock at 30, receiving cash. b. Issued 4, 000 shares of 80 par preferred 5% stock at 100, receiving cash. c. Issued 500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. d. Declared a quarterly dividend of 0.50 per share on common stock and 1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. e. Paid the cash dividends declared in (d). f. Purchased 7,500 shares of Solstice Corp. at 40 per share, plus a 150 brokerage commission. The investment is classified as an available-for-sale investment. g. Purchased 8,000 shares of treasury common stock at 33 per share. h. Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for 24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. i. Declared a 1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. j. Paid the cash dividends to the preferred stockholders. k. Received 27,500 dividend from Pinkberry Co. investment in (h). l. Purchased 90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of 37 5. The bonds are classified as a held-to-maturity long -term investment. m. Sold, at 38 per share, 2,600 shares of treasury common stock purchased in (g). n. Received a dividend of 0 .60 per share from the Solstice Corp. investment in (f). o. Sold 1,000 shares of Solstice Corp. at 45, including commission. p. Recorded the payment of semiannual interest on the bonds issue d in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method . q. Accrued interest for three months on the Dream Inc. bonds purchased in (I). r. Pinkberry Co. recorded total earnings of 240 ,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. s. The fair value for Solstice Corp. stock was 39. 02 per share on December 31, 2016. The investment is adjusted to fair value , using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments h ad a beginning balance of zero. Instructions 1. Journalize the selected transactions. 2. After all of the transaction s for the year ended December 31, 201 6, had been poste d [including the transactions recorded in part (1) and all adjusting entries), the data that follows were taken from the records of Equinox Products Inc. a. Prepare a multiple-step in come statement for the year ended December 31, 201 6, concluding with earnings per share . In computing earnings per share, assume that the average number of common shares outstanding was 100,000 and preferred dividends were 100,000. ( Round earnings per share to the nearest cent.) b. Prepare a retained earnings statement for the year ended December 31, 20 6. c. Prepare a balance sheet in report form as of December 31, 2016.arrow_forwardCary Corporation has 50,000 shares of 10 par common stock authorized. The following transactions took place during 2019, the first year of the corporations existence: Sold 5,000 shares of common stock for 18 per share. Issued 5,000 shares of common stock in exchange for a patent valued at 100,000. At the end of Carys first year, total contributed capital amounted to: a. 40,000 b. 90,000 c. 100,000 d. 190,000arrow_forward
- Ames Corporation repurchases 10,000 shares of its common stock for $12 per share. The shares were originally issued at an average price of $10 per share. Later it resells 6,000 of the shares for $15 per share and the remaining 4,000 shares for $17 per share. How much gain or loss should Ames report on its income statement as a result of these transactions? $38.000 gain $0 $20,000 loss $20,000 loss and $38,000 gainarrow_forwardContributed Capital Adams Companys records provide the following information on December 31, 2019: Additional information: 1. Common stock has a 5 par value, 50,000 shares are authorized, 15,000 shares have been issued and are outstanding. 2. Preferred stock has a 100 par value, 3,000 shares are authorized, 800 shares have been issued and are outstanding. Two hundred shares have been subscribed at 120 per share. The stock pays an 8% dividend, is cumulative, and is callable at 130 per share. 3. Bonds payable mature on January 1, 2023. They carry a 12% annual interest rate, payable semiannually. Required: Prepare the Contributed Capital section of the December 31, 2019, balance sheet for Adams. Include appropriate parenthetical notes.arrow_forwardSelected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 20Y8, were as follows: A. Issued 15,000 shares of 20 par common stock at 30, receiving cash. B. Issued 4,000 shares of 80 par preferred 5% stock at 100, receiving cash. C. Issued 500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. D. Declared a quarterly dividend of 0.50 per share on common stock and 1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. E. Paid the cash dividends declared in (D). F. Purchased 8,000 shares of treasury common stock at 33 per share. G. Declared a 1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. H. Paid the cash dividends to the preferred stockholders. I. Sold, at 38 per share, 2,600 shares of treasury common stock purchased in (F). J. Recorded the payment of semiannual interest on the bonds issued in (C) and the amortization of the premium for six months. The amortization is determined using the straight-line method. Instructions 1. Journalize the selected transactions. 2. After all of the transactions for the year ended December 31, 20Y8, had been posted [including the transactions recorded in part (1) and all adjusting entries], the data that follow were taken from the records of Equinox Products Inc. Income statement data: Advertising expense 150,000 Cost of goods sold 3,700,000 Delivery expense 30,000 Depreciation expenseoffice buildings and equipment 30,000 Depreciation expensestore buildings and equipment 100,000 Income tax expense 140,500 Interest expense 21,000 Interest revenue 30,000 Miscellaneous administrative expense 7,500 Miscellaneous selling expense 14,000 Office rent expense 50,000 Office salaries expense 170,000 Office supplies expense 10,000 Sales 5,313,000 Sales commissions 185,000 Sales salaries expense 385,000 Store supplies expense 21,000 Retained earnings and balance sheet data: Accounts payable 194,300 Accounts receivable 545,000 Accumulated depreciationoffice buildings and equipment 1,580,000 Accumulated depreciationstore buildings and equipment 4,126,000 Allowance for doubtful accounts 8,450 Bonds payable, 5%, due in 10 years 500,000 Cash 282,850 Common stock, 20 par (400,000 shares authorized; 100,000 shares issued, 94,600 outstanding) 2,000,000 Dividends: Cash dividends for common stock 155,120 Cash dividends for preferred stock 100,000 Goodwill 700,000 Income tax payable 44,000 Interest receivable 1,200 Inventory (December 31, 20Y8),at lower of cost (FIFO) or market 778,000 Office buildings and equipment 4,320,000 Paid-in capital from sale of treasury stock 13,000 Excess of issue price over parcommon stock 886,800 Excess of issue price over parpreferred stock 150,000 Preferred 5% stock, 80 par (30,000 shares authorized; 20,000 shares issued) 1,600,000 Premium on bonds payable 19,000 Prepaid expenses 27,400 Retained earnings, January 1, 20Y8 8,197,220 Store buildings and equipment 12,560,000 Treasury stock (5,400 shares of common stock at cost of 33 per share) 178,200 A. Prepare a multiple-step income statement for the year ended December 31, 20Y8. B. Prepare a retained earnings statement for the year ended December 31, 20Y8. C. Prepare a balance sheet in report form as of December 31, 20Y8.arrow_forward
- On January 1, 2020, LeiLanie Company reported the following shareholders' equity: Share capital 1,500,000 Share premium 3,000,000 Retained earnings 5,000,000 The entity had 400,000 authorised shares of P5 par value, of which 300,000 shares were issued and outstanding. On March 1, the entity acquired 50,000 shares for P10 per share to be held as treasury. On July 1, the entity declared a property dividend of inventory payable on July 31. The inventory had a P1,200,000 carrying amount and a fair value of P1,500,000 on July 1. The net income for 2020 was P3,000,000 How many shares are issued and outstanding? Select the correct response: O250,000 O 350,000 O 300,000 O 400,000 < Previousarrow_forwardOn January 1, 2020, Marimar Company reported the following shareholder's equity: Share capital, P100 par 6,000,000 Share premium 500,000 Retained earnings 1,800,000 Transactions during the year and othe rinformation relating to shareholders' equity were as follows: On January 26, the entity reacquired for cash 5,000 shares for P110 per share. On April 4, the entity sold for cash 3,000 shares of treasury for P140 per share. On June 1, the entity declared a cash dividend of P20 per share, payable July 5 to shareholders of record on July 1. On November 1, the entity declared a 2 for 1 split and changed the par value from P100 to P50. On November 20, shares were issued for the share split. On December 5, 4,000 shares were issued in exchange for aa second hand equipment. The equipment originally cost P400,000, was carried by the previous owner at a carrying amount…arrow_forwardAred Company showed the following shareholders’ equity on January 1, 2020: Share capital 1,000,000 Share premium 2,000,000 Retained earnings 4,000,000 The entity had 400,000 authorized shares of P5 par value, of which 200,000 shares were issued and outstanding. On July 1, 2020, the entity declared a property dividend of inventory payable on March 1, 2021. The inventory had a P1,200,000 carrying amount and a fair value less cost to distribute of P1,000,000 on July 1, 2020. The fair value less cost to distribute is P1,500,000 on December 31, 2020, and P900,000 on March 1, 2021. The net income for 2020 was P3,000,000. - What is the carrying amount of the inventory on December 31, 2020? - What is the amount to be recognized in profit or loss for the distribution of the non- cash dividend?arrow_forward
- ABC Company provided the following information for the year ended December 31, 2020: Share Capital P1,000,000 Loss from inventory write-down 150,000 Share premium 1,500,000 Retained earnings, January 1 550,000 Dividends paid 450,000 Loss on sale of trading securities 50,000 Additional information: During the current year ABCCompany issued additional 20,000 shares, 25 par value, for P1,000,000. On October 1, ABCCompany approved a formal plan to discontinue and sell a business segment. The segment had income of P2,000,000 from January 1 to September 30. On December 31, the carrying amount of the assets of the segment was P4,000,000 and the fair value less cost of disposal was P3,000,000. The income tax rate is 30% Required: Prepare statement of changes in shareholders equityarrow_forwardWatusi Inc. began operations in January 2021 and reported the following results for each of its 3 years of operations. P260,000 net loss P40,000 net loss P700,000 net income 2021 2022 2023 At December 31, 2023, Watusi Inc. share capital accounts were as follows. Share Capital-Preference, 6% cumulative, par value P100; authorized, issued, and outstanding 5,000 shares Share Capital-Ordinary, par value P1.00; authorized 1,000,000 shares; issued and outstanding 750,000 shares P260,000 750,000 Watusi Inc. has never paid a cash or share dividend. There has been no change in the share capital accounts since Watusi began operations. The country law permits dividends only from retained earnings. Instructions a. Compute the book value of the ordinary shares at December 31, 2023. b. Compute the book value of the ordinary shares at December 31, 2023, assuming that the preference shares have a liquidating value of P106 per share.arrow_forwardAt year end, National Corporation balance sheet showed total assets of P70,000,000, total liabilities of P35,000,000, total preferred share capital of P10,000,000, and 1,000,000 shares of common stock outstanding. If National Corporation could sell its assets for P60,500,000, its liquidation value per share of common stock is Format: 11.11arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Corporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Accounting (Text Only)AccountingISBN:9781285743615Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Corporate Financial Accounting
Accounting
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Accounting (Text Only)
Accounting
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Earnings per share (EPS), basic and diluted; Author: Bionic Turtle;https://www.youtube.com/watch?v=i2IJTpvZmH4;License: Standard Youtube License