Question

Paar Corporation bought 100 percent of Kimmel, Inc., on January 1, 2015. On that date, Paar’s...

Paar Corporation bought 100 percent of Kimmel, Inc., on January 1, 2015. On that date, Paar’s equipment (10-year life) has a book value of $505,000 but a fair value of $695,000. Kimmel has equipment (10-year life) with a book value of $262,000 but a fair value of $462,000. Paar uses the equity method to record its investment in Kimmel. On December 31, 2017, Paar has equipment with a book value of $353,500 but a fair value of $587,700. Kimmel has equipment with a book value of $183,400 but a fair value of $441,500. What is the consolidated balance for the Equipment account as of December 31, 2017?

Multiple Choice

a. $536,900.

b. $736,900.

c. $1,029,200.

d. $676,900.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The Answer is “d. $676,900 “

Particulars

Amount

Paar Corporation's Equipment Book Value on December 31, 2017

$353,500

Add : Kimmel’s Equipment with a book value

183400

Add : Allocation to Kimmel's equipment [$462,000 – 262,000]

200,000

Less : Amortization of Kimmel's equipment Allocation for 3 Years

[ ($200,000 / 10 years) x 3 years ]

(60,000)

Consolidated balance for the Equipment account as of December 31, 2017

$ 676,900

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
Paar Corporation bought 100 percent of Kimmel, Inc., on January 1, 2015. On that date, Paar’s...
Paar Corporation bought 100 percent of Kimmel, Inc., on January 1, 2015. On that date, Paar’s equipment (10-year life) has a book value of $407,500 but a fair value of $534,500. Kimmel has equipment (10-year life) with a book value of $287,000 but a fair value of $414,000. Paar uses the equity method to record its investment in Kimmel. On December 31, 2017, Paar has equipment with a book value of $285,250 but a fair value of $445,950. Kimmel has...
Paar Corporation bought 100 percent of Kimmel, Inc., on January 1, 2015. On that date, Paar’s...
Paar Corporation bought 100 percent of Kimmel, Inc., on January 1, 2015. On that date, Paar’s equipment (10-year life) has a book value of $352,500 but a fair value of $507,500. Kimmel has equipment (10-year life) with a book value of $250,000 but a fair value of $408,000. Paar uses the equity method to record its investment in Kimmel. On December 31, 2017, Paar has equipment with a book value of $246,750 but a fair value of $434,950. Kimmel has...
Paar Corporation bought 100 percent of Kimmel, Inc., on January 1, 2018. On that date, Paar’s...
Paar Corporation bought 100 percent of Kimmel, Inc., on January 1, 2018. On that date, Paar’s equipment (10-year remaining life) has a book value of $335,000 but a fair value of $468,000. Kimmel has equipment (10-year remaining life) with a book value of $258,000 but a fair value of $391,000. Paar uses the equity method to record its investment in Kimmel. On December 31, 2020, Paar has equipment with a book value of $234,500 but a fair value of $390,000....
Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing...
Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 10,100 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $108,900. However, its equipment (with a five-year remaining life) was undervalued by $5,600 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $37,000, although no value had been recorded...
On January 1, 2016, Everett, Inc. purchased Barber Corporation for $750,000. On that date the net...
On January 1, 2016, Everett, Inc. purchased Barber Corporation for $750,000. On that date the net assets of Barber had a book value of $450,000, and book values were equal to fair values with the following exception: FIFO Inventory- Undervalued, $15,000 Land- Undervalued, $30,000 Equipment (4 years life)- undervalued, $40,000 Patent (10 year life)- undervalued, $60,000 During 2016, Everett had income from its own operations of $180,000 and Barber had net income of $75,000. What amount of goodwill appeared on...
Hamlen Corporation acquired 100 percent of Pink's Company's common stock on January 1, 2015. Balance sheet...
Hamlen Corporation acquired 100 percent of Pink's Company's common stock on January 1, 2015. Balance sheet data for the two companies immediately following the acquisition follow: .....................................................Hamlen.................. Pink's Cash.............................................$ 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...
1)Presents Inc. acquired all of the outstanding common stock of Santa Co. on January 1, 2017,...
1)Presents Inc. acquired all of the outstanding common stock of Santa Co. on January 1, 2017, for $257,000. Annual amortization of $19,000 resulted from this acquisition. Presents reported net income of $70,000 in 2017 and $50,000 in 2018 and paid $22,000 in dividends each year. Santa reported net income of $40,000 in 2017 and $47,000 in 2018 and paid $10,000 in dividends each year. On the consolidated financial statements for 2017, a)what amount should have been shown for Equity in...
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...
Perry Company acquires 100% of the stock of Hurley Corporation on January 1, 2010, for $3,800...
Perry Company acquires 100% of the stock of Hurley Corporation on January 1, 2010, for $3,800 cash. As of that date Hurley has the following trial balance: Debit Credit Cash $500 Accounts Receivable 600 Inventory 800 Buildings (net) (5 year life) 1,500 Equipment (net) (2 year life) 1,000 Land 900 Accounts Payable $400 Long-term liabilities (due 12/31/13) 1,800 Common Stock 1,000 Additional paid-in capital 600 Retained earnings 1,500 Total $5,300 $5,300 Net income and dividends reported by Hurley for 2010...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT