Question

The following are selected account balances from Cheela Company and Jarjar Corporation as of December 31,...

The following are selected account balances from Cheela Company and Jarjar Corporation as of December 31, 2018:

Cheela

Jarjar

Revenues

P    980,000

P    560,000

Expenses

560,000

420,000

Dividend Income

84,000

Dividends Paid

112,000

84,000

Accumulated profits, 1/1/18

840,000

280,000

Current Assets

560,000

700,000

Building (net)

1,260,000

560,000

Equipment (net)

840,000

1,400,000

Investment in Jarjar Corp.

         ?

Liabilities

700,000

1,932,000

Ordinary Shares

840,000

(P20 par)

280,000

(P10 par)

Share Premium

210,000

112,000

On January 1, 2018, Cheela acquired all of the outstanding shares of Jarjar for P298,000 in cash and ordinary shares. Cheela also pays P24,000 in lawyers’ fees and other combination costs as well as P14,000 in share issuance costs. At the date of acquisition, Jarjar’s buildings (with a six-year remaining life) have a P616,000 book value and a fair market value of P784,000.

Required:

Prepare the consolidated statements worksheet and present all elimination entries that would have been included in the consolidated statements worksheet to prepare a full set of consolidated financial statements for the year 2018.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

a) Value of the shares of Jarjar Corporation as on date of acquisition:

Current Assets 700000
Buildings 784000
Equipment 1400000
Total Assets 2884000
Less: Liabilities 1932000
Net Asset value of the company 952000

Amount paid by Cheela Company to acquire the shares

Payment in cash 298000
Lawyer cost 24000
Share issuance cost 14000
Total cost of acquisition(A) 336000
Net asset value of the company(B) 952000
Capital Reserve(B)-(A) 616000

b) Elimination entries

1.

Dividends paid (Jarjar Corporation) Dr 84000

To DIvidend Income 84000

2.

Share Capital (Jarjar Corporation) Dr 280000

Share premium (jarjar Corporation) Dr 112000

To Investments in Jarjar Corporation 336000

To Capital Reserve 56000.

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
The following are selected account balances from Cheela Company and Jarjar Corporation as of December 31,...
The following are selected account balances from Cheela Company and Jarjar Corporation as of December 31, 2018: Cheela Jarjar Revenues P    980,000 P    560,000 Expenses 560,000 420,000 Dividend Income 84,000 Dividends Paid 112,000 84,000 Accumulated profits, 1/1/18 840,000 280,000 Current Assets 560,000 700,000 Building (net) 1,260,000 560,000 Equipment (net) 840,000 1,400,000 Investment in Jarjar Corp.          ? Liabilities 700,000 1,932,000 Ordinary Shares 840,000 (P20 par) 280,000 (P10 par) Share Premium 210,000 112,000 On January 1, 2018, Cheela acquired all of...
Papilon Corporation acquired 90,000 shares of the 100,000 outstanding no-par ordinary share capital of Silicon Company...
Papilon Corporation acquired 90,000 shares of the 100,000 outstanding no-par ordinary share capital of Silicon Company for a price of P1,200,000 on January 1, 2011 at the time when Silicon Company had book and fair values as shown below. Papilon Corporation also paid P96,000 direct acquisition costs in the form of legal fees to outside consultants.   Ordinary Share Capital P480,000 Accumulated Profits 600,000 Total net assets at book value P1,080,000 Add: Differences between current fair value and book value Inventories...
Papilon Corporation acquired 90,000 shares of the 100,000 outstanding no-par ordinary share capital of Silicon Company...
Papilon Corporation acquired 90,000 shares of the 100,000 outstanding no-par ordinary share capital of Silicon Company for a price of P1,200,000 on January 1, 2011 at the time when Silicon Company had book and fair values as shown below. Papilon Corporation also paid P96,000 direct acquisition costs in the form of legal fees to outside consultants.   Ordinary Share Capital P480,000 Accumulated Profits 600,000 Total net assets at book value P1,080,000 Add: Differences between current fair value and book value Inventories...
The books of Ivanhoe Corporation carried the following account balances as of December 31, 2020. Cash...
The books of Ivanhoe Corporation carried the following account balances as of December 31, 2020. Cash $ 191,000 Preferred Stock (6% cumulative, nonparticipating, $50 par) 292,000 Common Stock (no-par value, 324,000 shares issued) 1,620,000 Paid-in Capital in Excess of Par—Preferred Stock 135,000 Treasury Stock (common 2,700 shares at cost) 36,100 Retained Earnings 98,900 The company decided not to pay any dividends in 2020. The board of directors, at their annual meeting on December 21, 2021, declared the following: “The current...
The books of Skysong Corporation carried the following account balances as of December 31, 2020. Cash...
The books of Skysong Corporation carried the following account balances as of December 31, 2020. Cash $ 182,000 Preferred Stock (6% cumulative, nonparticipating, $50 par) 272,000 Common Stock (no-par value, 318,000 shares issued) 1,590,000 Paid-in Capital in Excess of Par—Preferred Stock 160,000 Treasury Stock (common 2,600 shares at cost) 30,800 Retained Earnings 110,600 The company decided not to pay any dividends in 2020. The board of directors, at their annual meeting on December 21, 2021, declared the following: “The current...
The books of Headland Corporation carried the following account balances as of December 31, 2020. Cash...
The books of Headland Corporation carried the following account balances as of December 31, 2020. Cash $ 190,000 Preferred Stock (6% cumulative, nonparticipating, $50 par) 316,000 Common Stock (no-par value, 284,000 shares issued) 1,420,000 Paid-in Capital in Excess of Par—Preferred Stock 140,000 Treasury Stock (common 2,700 shares at cost) 31,700 Retained Earnings 99,500 The company decided not to pay any dividends in 2020. The board of directors, at their annual meeting on December 21, 2021, declared the following: “The current...
The following account balances were taken from the ledger of ABC Company at December 31, 2019...
The following account balances were taken from the ledger of ABC Company at December 31, 2019 before adjustments: Cash $ 42,000 Accounts Receivable 86.000 Allowance for Doubtful Accounts 2,400 Inventory 97,000 Land 62,300 Buildings 142,500 Accumulated Depreciation---Buildings 32,560 Long Term Investments 31,500 Accounts Payable 51,800 Mortgage Payable 122,500 Capital Stock, $5 par 200,000 Retained Earnings, December 31, 2017 26,950 Dividends 40,540 Sales 431,000 Sales Returns 9,560 Sales Discounts 8,440 Cost of Goods Sold 203,420 Selling Expenses 58,300 Administrative Expenses 44,200...
Question 1 The accounts for Orange Corporation reported the following equity account balances July 31, 2017:...
Question 1 The accounts for Orange Corporation reported the following equity account balances July 31, 2017: Common shares, unlimited shares authorized, 1,800 shares issued and outstanding $43,200 Retained earnings $109,000 Required: June 28, 2018 Prepare the journal entry to record the purchase and retirement of 700 common shares. Orange Corporation paid the shareholders $21 per share. This is the first repurchase of shares. September 26, 2018 Prepare the journal entry to record the purchase and retirement of 400 common shares....
Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also...
Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts. Padre Company Sol Company Book Values Book Values Fair Values 12/31 12/31 12/31 Cash $ 486,500 67,350 $ 67,350 Receivables 250,500 391,000 391,000 Inventory 490,000 301,000 356,300 Land 637,500 203,000 182,700 Building and equipment (net) 840,000 303,000 364,900 Franchise agreements 317,000 226,000 260,100 Accounts payable (382,000 ) (166,000 ) (166,000 ) Accrued expenses (169,000 ) (42,750...
Following are selected accounts for Green Corporation and Vega Company as of December 31, 2023. Several...
Following are selected accounts for Green Corporation and Vega Company as of December 31, 2023. Several of Green's accounts have been omitted.                                                    Green          Vega Revenues                               $ 900,000 $ 500,000 Cost of goods sold                   360,000    200,000 Depreciation expense              140,000      40,000 Other expenses                        100,000        60,000 Equity in Vega’s income             ? Retained earnings, 1/1/2023 1,350,000 1,200,000 Dividends                                 195,000      80,000 Current assets                         300,000 1,380,000 Land                                        450,000    180,000 Building (net)                          750,000       280,000 Equipment (net)...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT