Question

On January 1, 20X8, Ramon Corporation acquired 75 percent of Tester Company's voting common stock for...

On January 1, 20X8, Ramon Corporation acquired 75 percent of Tester Company's voting common stock for $300,000. At the time of the combination, Tester reported common stock outstanding of $200,000 and retained earnings of $150,000, and the fair value of the noncontrolling interest was $100,000. The book value of Tester's net assets approximated market value except for patents that had a market value of $30,000 more than their book value. The patents had a remaining economic life of five years at the date of the business combination. Tester reported net income of $40,000 and paid dividends of $10,000 during 20X8.

What is the amount of Excess Depreciation that will be recorded for 20X8?

a.3000

b.5000

c.6000

d.30000

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

For answer this question only need this statement

* The book value of Tester's net assets approximated market value except for patents that had a market value of $30,000 more than their book value.

*The patents had a remaining economic life of five years at the date of the business combination

Calculation of Excess Depreciation

Assets excess value = $30000

Useful life = year

Depreciation is calculated based straight line method

Depreciation = Cost / useful life

Excess Depreciation = 30000 / 5 = $6000

What is the amount of Excess Depreciation that will be recorded for 20X8?

Answer : c.6000

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
2. On January 1, 20X8, Gregory Corporation acquired 90 percent of Nova Company's voting stock, at...
2. On January 1, 20X8, Gregory Corporation acquired 90 percent of Nova Company's voting stock, at underlying book value. The fair value of the noncontrolling interest was equal to 10 percent of the book value of Nova at that date. Gregory uses the equity method in accounting for its ownership of Nova. On December 31, 20X8, the trial balances of the two companies are as follows: Gregory Corp Nova Company Dr Cr Dr Cr Current Assets 200000 120000 Depreciable Assets...
On January 1, 20X8, Gregory Corporation acquired 90 percent of Nova Company's voting stock, at underlying...
On January 1, 20X8, Gregory Corporation acquired 90 percent of Nova Company's voting stock, at underlying book value. The fair value of the noncontrolling interest was equal to 10 percent of the book value of Nova at that date. Gregory uses the equity method in accounting for its ownership of Nova. On December 31, 20X8, the trial balances of the two companies are as follows: Gregory Corp Nova Company Dr Cr Dr Cr Current Assets 200000 120000 Depreciable Assets 300000...
2- Dubai Corporation acquired 100 percent of Sharjah Company's common stock on January 1, 2019. Balance...
2- Dubai Corporation acquired 100 percent of Sharjah Company's common stock on January 1, 2019. Balance sheet data for the two companies immediately following the acquisition follows: Item Dubai Corporation Sharjah Company Cash $ 30,000 $ 25,000 Accounts Receivable 80,000 40,000 Inventory 150,000 55,000 Land 65,000 40,000 Buildings and Equipment 260,000 160,000 Less: Accumulated Depreciation (120,000 ) (50,000 ) Investment in Spin Company Stock 150,000 Total Assets $ 615,000 $ 270,000 Accounts Payable $45,000 $33,000 Taxes Payable 20,000 8,000 Bonds...
Hamlen Corporation acquired 100 percent of Pink's Company's common stock on January 1, 2015. Balance sheet...
Hamlen Corporation acquired 100 percent of Pink's Company's common stock on January 1, 2015. Balance sheet data for the two companies immediately following the acquisition follow: .....................................................Hamlen.................. Pink's Cash.............................................$ 30,000 ..............$25,000 Accounts Receivable........................... 80,000 ................40,000 Inventory........................................ 150,000............... 55,000 Land.............................................. 65,000 ................40,000 Buildings and Equipment...................... 260,000............. 160,000 Less: Accumulated Depreciation............ (120,000)............. (50,000) Investment in Pong Company Stock.......... 150,000 Total Assets...................................... $615,000 ........$270,000 Accounts Payable...............................$ 45,000.......... $ 33,000 Taxes Payable.................................... 20,000............... 8,000 Bonds Payable ................................... 200,000........... 100,000 Common Stock..................................... 50,000 ............20,000 Retained...
Hamlen Corporation acquired 100 percent of Pink's Company's common stock on January 1, 2015. Balance sheet...
Hamlen Corporation acquired 100 percent of Pink's Company's common stock on January 1, 2015. Balance sheet data for the two companies immediately following the acquisition follow: .....................................................Hamlen.................. Pink's Cash.............................................$ 30,000 ..............$25,000 Accounts Receivable........................... 80,000 ................40,000 Inventory........................................ 150,000............... 55,000 Land.............................................. 65,000 ................40,000 Buildings and Equipment...................... 260,000............. 160,000 Less: Accumulated Depreciation............ (120,000)............. (50,000) Investment in Pong Company Stock.......... 150,000 Total Assets...................................... $615,000 ........$270,000 Accounts Payable...............................$ 45,000.......... $ 33,000 Taxes Payable.................................... 20,000............... 8,000 Bonds Payable ................................... 200,000........... 100,000 Common Stock..................................... 50,000 ............20,000 Retained...
. Pole Company acquired 80 percent ownership of South Company's voting shares on January 1, 20X8,...
. Pole Company acquired 80 percent ownership of South Company's voting shares on January 1, 20X8, at underlying book value. The fair value of the noncontrolling interest on that date was equal to 20 percent of the book value of South Company. During 20X8, Pole purchased inventory for $30,000 and sold the full amount to South Company for $50,000. On December 31, 20X8, South's ending inventory included $10,000 of items purchased from Pole. Also in 20X8, South purchased inventory for...
2- Dubai Corporation acquired 100 percent of Sharjah Company's common stock on January 1, 2019. Balance...
2- Dubai Corporation acquired 100 percent of Sharjah Company's common stock on January 1, 2019. Balance sheet data for the two companies immediately following the acquisition follows: Item Dubai Corporation Sharjah Company Cash $ 30,000 $ 25,000 Accounts Receivable 80,000 40,000 Inventory 150,000 55,000 Land 65,000 40,000 Buildings and Equipment 260,000 160,000 Less: Accumulated Depreciation (120,000 ) (50,000 ) Investment in Spin Company Stock 150,000 Total Assets $ 615,000 $ 270,000 Accounts Payable $45,000 $33,000 Taxes Payable 20,000 8,000 Bonds...
Princeton Company acquired 75 percent of the common stock of Sheffield Corporation on December 31, 2011....
Princeton Company acquired 75 percent of the common stock of Sheffield Corporation on December 31, 2011. On the date of acquisition, Princeton held land with a book value of $150,000 and a fair value of $300,000; Sheffield held land with a book value of $100,000 and fair value of $500,000. What amount would land be reported in the consolidated balance sheet prepared immediately after the combination? a.$650,000 b.$500,000 c.$550,000 d.$375,000 On January 1, 2011, Primer Corporation acquired 80 percent of...
Please explain this On January 1, 20X2, Pint Corporation acquired 80 percent of Size Corporation for...
Please explain this On January 1, 20X2, Pint Corporation acquired 80 percent of Size Corporation for $200,000 cash. Size reported net income of $25,000 each year and dividends of $5,000 each year for 20X2, 20X3, and 20X4. On January 1, 20X2, Size reported common stock outstanding of $160,000 and retained earnings of $40,000, and the fair value of the noncontrolling interest was $50,000. It held land with a book value of $90,000 and a market value of $100,000, and equipment...
Please explain the answers. On December 31, 20X8, Polaris Corporation acquired 100 percent ownership of Star...
Please explain the answers. On December 31, 20X8, Polaris Corporation acquired 100 percent ownership of Star Corporation. On that date, Star reported assets and liabilities with book values of $300,000 and $100,000, respectively, common stock outstanding of $50,000, and retained earnings of $150,000. The book values and fair values of Star's assets and liabilities were identical except for land which had increased in value by $10,000 and inventories which had decreased by $5,000. Based on the preceding information, what amount...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT