Pop Company acquires 85% of Sonny Company for $637,500 on
January, 1 2014. Sonny reported common...
Pop Company acquires 85% of Sonny Company for $637,500 on
January, 1 2014. Sonny reported common stock of $300,000 and
retained earnings of $210,000 on that date. Equipment was
undervalued by $30,000 and buildings were undervalued by $50,000,
equipment having a 6-year remaining life and the building having a
10-year remaining life. Any excess consideration transferred over
fair value was attributed to goodwill with an indefinite life. Pop
accounts for its investment in Sonny using the equity method. Based
on...
On Jan 1, 2015, Petunia Corp purchased an 70% interest in the
common stock of Sunflower...
On Jan 1, 2015, Petunia Corp purchased an 70% interest in the
common stock of Sunflower Corp. for $350,000.00 Sunflower had the
following Balance Sheet on the date of acquisition:
Sunflower Corporation
Balance Sheet
Jan 1,
2015
Assets:
Liabilities & Equity
Accounts
Receivable
$40,000.
Accounts Payable $42,297
Inventory
20,000.
Bonds
Payable
$100,000
Land
35,000
Discount on
BP
(2,297)
Buildings
250,000.
Common Stk ($10 par) $10,000
Accumulated Depreciation
(50,000)
Paid in
Capital
$90,000
Equipment
$120,000
Retained Earnings $115,000....
In January 1, 2014 James Company has acquired 85% of LuLu
Company for
$2,125,000
on the...
In January 1, 2014 James Company has acquired 85% of LuLu
Company for
$2,125,000
on the date of the acquisition the subsidiary had retained earnings
$650,000 and a capital of $1,100,000.
Separate balance sheet as of 1 January 2014 for James and its
Subsidiary.
Description
Parents
Subsidiary
Cash
60,000
35,000
Receivable
35,000
40,000
Land
1,550,000
550,000
Property
1,500,000
1,200,000
Investment in Subsidiary
2,125,000
-
Total asset
5,270,000
1,825,000
Account payable
50,000
60,000
Other liabilities
67,000
15,000
Capital stock
3,900,000
1,100,000...
Pell Company acquires 80% of Demers Company for $500,000 on
January 1, 2014. Demers reported common...
Pell Company acquires 80% of Demers Company for $500,000 on
January 1, 2014. Demers reported common stock of $300,000 and
retained earnings of $210,000 on that date. Equipment was
undervalued by $30,000 and buildings were undervalued by $40,000,
each having a 10-year remaining life. Any excess consideration
transferred over fair value was attributed to goodwill with an
indefinite life. Based on an annual review, goodwill has not been
impaired.
Demers earns income and pays dividends as follows:
2014 2015 2016...
On January 1, 2014, Pirate Company acquired an 80% interest in
Sun Company for $425,000. On...
On January 1, 2014, Pirate Company acquired an 80% interest in
Sun Company for $425,000. On that date, Sun reported stockholder’s
equity of $400,000: $100,000 in common stock and $300,000 in
retained earnings. In setting the acquisition price, Pirate
appraised three accounts at values different from the balances
reported within Sun’s financial records: Buildings (8-year
remaining life): Undervalued by $32,500 Land: Undervalued by
$50,000 Royalty agreement (20-year remaining life): Not previously
recorded; Valued at $30,000 At December 31, 2018, the...
On January 1st 2011, Green Corp purchased 20% of the
outstanding voting common stock of Gold...
On January 1st 2011, Green Corp purchased 20% of the
outstanding voting common stock of Gold Company for $300000. The
book value of the acquired shares was $275000. The excess of cost
over book value is attributable to an intangible asset on Gold's
books that was undervalued and had a remaining useful life of 5
years. For the year ended December 31st 2011, Gold reported net
income of $125000 and paid cash dividends of $25000. What is the
carrying value...
Leo Company purchased equipment on January 1, 2014 for
$90,000.
It is estimated that the equipment...
Leo Company purchased equipment on January 1, 2014 for
$90,000.
It is estimated that the equipment will have a $5,000 salvage
value at the end of its 5-year useful life.
It is also estimated that the equipment will produce 100,000
units over its 5-year life.
Answer Questions below:
1. Compute the amount of depreciation expense for the year ended
December 31, 2014, using the straight-line method of
depreciation.
2. If 16,000 units of product are produced in 2014 and 24,000...
Intercompany sale of depreciable assets
Assume on January 1, 2015, a parent company a 75% interest...
Intercompany sale of depreciable assets
Assume on January 1, 2015, a parent company a 75% interest in a
subsidiary's voting common stock. On the date of acquisition, the
fair value of the subsidiary's net assets equaled their reported
book values. On January 1, 2017, the subsidiary purchased a
building for $576,000. The building has a useful life of 8 years
and is depreciated on a straight-line basis with no salvage value.
On January 1, 2019, the subsidiary sold the building...
On January 1, 2006, Peter Company purchased 80 percent of the
outstanding shares of Pedro Company...
On January 1, 2006, Peter Company purchased 80 percent of the
outstanding shares of Pedro Company at a cost of P1,080,000. On
that date, Pedro Company had P600,000 worth of ordinary shares and
P750,000 worth of accumulated profits. For 2006, Pedro Company
reported income of P270,000 and paid dividends of P90,000. All of
the assets and liabilities of Pedro Company are at fair market
value.
On December 31, 2006, Peter Company sold equipment to Pedro
Company for P112,500 that had...
Procter Company owns 90% of the outstanding stock of Silex
Company. On January 1, 2014, Silex...
Procter Company owns 90% of the outstanding stock of Silex
Company. On January 1, 2014, Silex Company sold
land to Procter Company for $350,000. Silex had originally
purchased the land on June 30, 2010, for $200,000.
Procter Company plans to construct a building on the land bought
from Silex in which it will house new
production machinery. The estimated useful life of the building
and the new machinery is 15 years.
Required:
A. Prepare the entries on the books of...