Question

McGuire Company acquired 90 percent of Hogan Company on January 1, 2014, for $234,000 cash. This...

McGuire Company acquired 90 percent of Hogan Company on January 1, 2014, for $234,000 cash. This amount is reflective of Hogan's total fair value. Hogan's stockholders' equity consisted of common stock of $160,000 and retained earnings of $80,000. An analysis of Hogan's net assets revealed the following:

Building: Book Value=$10,000 Fair Value=$8,000

Any excess consideration transferred over fair value is attributable to an unamortized patent with a useful life of 5 years.

In consolidation at January 1, 2014, what adjustment is necessary for Hogan's Buildings account?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
January 1, 2014
Particulars $ $
Money paid for 90% share of Hogan Company 234000
Less:
Common Stock ( 90% share) 129600
Retained earnings ( 90% share) 64800 194400
Excess Contribution to be unamortized over 5 Year 39600
Per year amortized value 7920
Fair Value of building 8000
Proporsnate amortized value            326
(7,920/194,400 x 8,000)
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. McGuire Company acquired 90 percent of Hogan Company on January 1, 2019, for $234,000 cash....
1. McGuire Company acquired 90 percent of Hogan Company on January 1, 2019, for $234,000 cash. This amount is reflective of Hogan’s total acquisition-date fair value. Hogan's stockholders' equity consisted of common stock of $160,000 and retained earnings of $80,000. An analysis of Hogan's net assets revealed the following: Book Value Fair Value Buildings (10-year life) $ 10,000 $ 8,000 Equipment (4-year life) 14,000 18,000 Land 5,000 12,000 Any excess consideration transferred over fair value is attributable to an unamortized...
McGuire Company acquired 90 percent of Hogan Company on January 1, 2019, for $234,000 cash. This...
McGuire Company acquired 90 percent of Hogan Company on January 1, 2019, for $234,000 cash. This amount is reflective of Hogan’s total acquisition-date fair value. Hogan's stockholders' equity consisted of common stock of $160,000 and retained earnings of $80,000. An analysis of Hogan's net assets revealed the following: Book Value Fair Value Buildings (10-year life) $ 10,000 $ 8,000 Equipment (4-year life) 14,000 18,000 Land 5,000 12,000 Any excess consideration transferred over fair value is attributable to an unamortized patent...
McGuire Company acquired 90 percent of Hogan Company on January 1, 2019, for $234,000 cash. This...
McGuire Company acquired 90 percent of Hogan Company on January 1, 2019, for $234,000 cash. This amount is reflective of Hogan’s total acquisition-date fair value. Hogan's stockholders' equity consisted of common stock of $160,000 and retained earnings of $80,000. An analysis of Hogan's net assets revealed the following: Book Value Fair Value Buildings (10-year life) $ 10,000 $ 8,000 Equipment (4-year life) 14,000 18,000 Land 5,000 12,000 Any excess consideration transferred over fair value is attributable to an unamortized patent...
4. McGuire Company acquired 90 percent of Hogan Company on January 1, 2019, for $234,000 cash....
4. McGuire Company acquired 90 percent of Hogan Company on January 1, 2019, for $234,000 cash. This amount is reflective of Hogan’s total acquisition-date fair value. Hogan's stockholders' equity consisted of common stock of $160,000 and retained earnings of $80,000. An analysis of Hogan's net assets revealed the following: Book Value Fair Value Buildings (10-year life) $ 10,000 $ 8,000 Equipment (4-year life) 14,000 18,000 Land 5,000 12,000 Any excess consideration transferred over fair value is attributable to an unamortized...
McGuire Company acquired 90 percent of Hogan Company on January 1, 2019, for $234,000 cash. This...
McGuire Company acquired 90 percent of Hogan Company on January 1, 2019, for $234,000 cash. This amount is reflective of Hogan’s total acquisition-date fair value. Hogan's stockholders' equity consisted of common stock of $160,000 and retained earnings of $80,000. An analysis of Hogan's net assets revealed the following: Book Value Fair Value Buildings (10-year life) $ 10,000 $ 8,000 Equipment (4-year life) 14,000 18,000 Land 5,000 12,000 Any excess consideration transferred over fair value is attributable to an unamortized patent...
McGuire Company acquired 90 percent of Hogan Company on January 1, 20X1, for $243,000 cash. This...
McGuire Company acquired 90 percent of Hogan Company on January 1, 20X1, for $243,000 cash. This amount is reflective of Hogan's total fair value. Hogan's stockholders' equity consisted of common stock of $160,000 and retained earnings of $80,000. An analysis of Hogan's net assets revealed the following: Book Value Fair Value Buildings, 10-year life $10,000 $9,000 Equipment, 4-year life 14,000 18,000 Land 5,000 12,000 Any excess consideration transferred over fair value is attributable to an unrecorded patent with a useful...
On January 1, 2014, Penelope Company acquired a 100% interest in Leah Company for $200,000 cash....
On January 1, 2014, Penelope Company acquired a 100% interest in Leah Company for $200,000 cash. On January 1, 2014, Leah Company had the following assets and liabilities: Book Value Fair Value Cash $10,000 $10,000 Accounts Receivable 30,000 35,000 Inventory 40,000 50,000 Plant Assets 60,000 80,000 Total Assets $140,000 $175,000 Liabilities $25,000 $25,000 Capital Stock 100,000 Retained Earnings 15,000 Total Liabilities & Stockholders' Equity $140,000 Penelope used push down accounting to account for the acquisition. The total amount of push-down...
Problem 3: Assume that a parent company acquired 80% of a subsidiary on January 1, 2014....
Problem 3: Assume that a parent company acquired 80% of a subsidiary on January 1, 2014. The purchase price was $175,000 in excess of the subsidiary’s book value of Stockholders’ Equity on the acquisition date, and that excess was assigned entirely to an unrecorded Patent owned by the subsidiary. The assumed economic useful life of the patent is 10 years. Assume that subsidiary sells inventory to the parent. The parent, ultimately, sells the inventory to customers outside of the consolidated...
PAM Co. acquired all of the common stock of Sista Co. on January 1, 2017. As...
PAM Co. acquired all of the common stock of Sista Co. on January 1, 2017. As of that date, Sista had the following trial balance: Debit Credit Accounts payable $ 60,000 Accounts receivable $ 50,000 Additional paid-in capital 60,000 Buildings (net) (20-year life) 140,000 Cash and short-term investments 70,000 Common stock 300,000 Equipment (net) (8-year life) 240,000 Intangible assets (indefinite life) 110,000 Land 90,000 Long-term liabilities (mature 12/31/19) 180,000 Retained earnings, 1/1/17 120,000 Supplies 20,000 Totals $ 720,000 $ 720,000...
On January 1, 2020, Harrison, Inc., acquired 90 percent of Starr Company in exchange for $1,125,000...
On January 1, 2020, Harrison, Inc., acquired 90 percent of Starr Company in exchange for $1,125,000 fair-value consideration. The total fair value of Starr Company was assessed at $1,200,000. Harrison computed annual excess fair-value amortization of $8,000 based on the difference between Starr’s total fair value and its underlying book value. The subsidiary reported net income of $70,000 in 2020 and $90,000 in 2021 with dividend declarations of $30,000 each year. Apart from its investment in Starr, Harrison had net...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT