Question

On January 1, 2018, Morey, Inc., exchanged $182,250 for 25 percent of Amsterdam Corporation. Morey appropriately...

On January 1, 2018, Morey, Inc., exchanged $182,250 for 25 percent of Amsterdam Corporation. Morey appropriately applied the equity method to this investment. At January 1, the book values of Amsterdam’s assets and liabilities approximated their fair values.

On June 30, 2018, Morey paid $563,500 for an additional 70 percent of Amsterdam, thus increasing its overall ownership to 95 percent. The price paid for the 70 percent acquisition was proportionate to Amsterdam’s total fair value. At June 30, the carrying amounts of Amsterdam’s assets and liabilities approximated their fair values. Any remaining excess fair value was attributed to goodwill.

Amsterdam reports the following amounts at December 31, 2018 (credit balances shown in parentheses):

Revenues $ (279,000 )
Expenses 201,000
Retained earnings, January 1 (193,800 )
Dividends declared, October 1 20,000
Common stock (500,000 )

Amsterdam’s revenue and expenses were distributed evenly throughout the year and no changes in Amsterdam’s stock have occurred.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
On January 1, 2018, Morey, Inc., exchanged $183,200 for 25 percent of Amsterdam Corporation. Morey appropriately...
On January 1, 2018, Morey, Inc., exchanged $183,200 for 25 percent of Amsterdam Corporation. Morey appropriately applied the equity method to this investment. At January 1, the book values of Amsterdam’s assets and liabilities approximated their fair values. On June 30, 2018, Morey paid $630,000 for an additional 70 percent of Amsterdam, thus increasing its overall ownership to 95 percent. The price paid for the 70 percent acquisition was proportionate to Amsterdam’s total fair value. At June 30, the carrying...
On January 1, 2018 Casey Corporation exchanged $3,298,000 cash for 100 percent of the outstanding voting...
On January 1, 2018 Casey Corporation exchanged $3,298,000 cash for 100 percent of the outstanding voting stock of Kennedy Corporation. Casey plans to maintain Kennedy as a wholly owned subsidiary with separate legal status and accounting information systems. At the acquisition date, Casey prepared the following fair-value allocation schedule: Fair value of Kennedy (consideration transferred) $ 3,298,000 Carrying amount acquired 2,600,000 Excess fair value $ 698,000 to buildings (undervalued) $ 329,000 to licensing agreements (overvalued) (106,000 ) 223,000 to goodwill...
On January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company...
On January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company for $1,649,200 in cash. The price paid was proportionate to Sellinger’s total fair value, although at the acquisition date, Sellinger had a total book value of $2,100,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger’s accounting records by $246,000. On January 1, 2018, Palka acquired an additional...
On January 1, 2018, Access IT Company exchanged $890,000 for 40 percent of the outstanding voting...
On January 1, 2018, Access IT Company exchanged $890,000 for 40 percent of the outstanding voting stock of Net Connect. Especially attractive to Access IT was a research project underway at Net Connect that would enhance both the speed and quantity of client-accessible data. Although not recorded in Net Connect's financial records, the fair value of the research project was considered to be $1,850,000. In contractual agreements with the sole owner of the remaining 60 percent of Net Connect, Access...
Tancer Corporation paid $700,000 for 70 percent of the outstanding common stock of Hamelot Company on...
Tancer Corporation paid $700,000 for 70 percent of the outstanding common stock of Hamelot Company on January 1, 2020. At that time, Hamelot had the following condensed balance sheet: Carrying amounts Current assets $120,000 Plant and equipment, net $740,000 Liabilities $360,000 Common Stock $30,000 Additional paid in capital - Common Stock $180,000 Retained Earnings $290,000 The fair value of the plant and equipment was $870,000. The fair values and carrying amounts were equal for all other assets and liabilities. Provide...
On January 1, 2017, Mona, Inc., acquired 90 percent of Lisa Company’s common stock as well...
On January 1, 2017, Mona, Inc., acquired 90 percent of Lisa Company’s common stock as well as 70 percent of its preferred shares. Mona paid $66,000 in cash for the preferred stock, with a call value of 110 percent of the $50 per share par value. The remaining 30 percent of the preferred shares traded at a $35,000 fair value. Mona paid $558,000 for the common stock. At the acquisition date, the noncontrolling interest in the common stock had a...
On January 1, 2018, Brooks Corporation exchanged $1,234,500 fair-value consideration for all of the outstanding voting...
On January 1, 2018, Brooks Corporation exchanged $1,234,500 fair-value consideration for all of the outstanding voting stock of Chandler, Inc. At the acquisition date, Chandler had a book value equal to $1,102,500. Chandler’s individual assets and liabilities had fair values equal to their respective book values except for the patented technology account, which was undervalued by $312,000 with an estimated remaining life of six years. The Chandler acquisition was Brooks’s only business combination for the year. In case expected synergies...
On January 1, 2017, Doone Corporation acquired 70 percent of the outstanding voting stock of Rockne...
On January 1, 2017, Doone Corporation acquired 70 percent of the outstanding voting stock of Rockne Company for $462,000 consideration. At the acquisition date, the fair value of the 30 percent noncontrolling interest was $198,000 and Rockne's assets and liabilities had a collective net fair value of $660,000. Doone uses the equity method in its internal records to account for its investment in Rockne. Rockne reports net income of $220,000 in 2018. Since being acquired, Rockne has regularly supplied inventory...
On April 1, Pujols, Inc., exchanges $453,750 for 70 percent of the outstanding stock of Ramirez...
On April 1, Pujols, Inc., exchanges $453,750 for 70 percent of the outstanding stock of Ramirez Corporation. The remaining 30 percent of the outstanding shares continued to trade at a collective fair value of $182,850. Ramirez’s identifiable assets and liabilities each had book values that equaled their fair values on April 1 for a net total of $532,500. During the remainder of the year, Ramirez generates revenues of $704,000 and expenses of $382,000 and declared no dividends. On a December...
On January 1, 2018, Alamar Corporation acquired a 43 percent interest in Burks, Inc., for $192,000....
On January 1, 2018, Alamar Corporation acquired a 43 percent interest in Burks, Inc., for $192,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $327,000. During 2018, Burks reported net income of $83,000 and declared and paid cash dividends of $25,000. Alamar sold inventory costing $22,000 to Burks during 2018 for $39,000. Burks used all of this merchandise in its operations during 2018. Prepare all of Alamar's 2018 journal entries to...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT