ACT506
Module 1 Critical Thinking
Assignment
Option #1
Peerless Products (parent
company) purchased on January 02,...
ACT506
Module 1 Critical Thinking
Assignment
Option #1
Peerless Products (parent
company) purchased on January 02, 20x7, Special Foods (subsidiary)
for $300,000.
Information for acquisition
entry for January 02, 20x7.
Peerless Products Fair Value
Consideration:
$300,000
Special Foods book value of
equity:
Common stock
$100,000
Paid in capital
50,000
Retained earnings
150,000
1). Required entry for
investment equity using cash
1/2/20x7
Debit
$xxxx
Credit
$xxxx
2). Information to complete
the parent company January to December 20x7 entries
Parent
Subsidiary
...
ACT506 Portfolio Project Option#2 Push Corporation and
Subsidiaries Consolidated Statement of Cash Flows For the Year...
ACT506 Portfolio Project Option#2 Push Corporation and
Subsidiaries Consolidated Statement of Cash Flows For the Year
Ended December 31, 20x7 (Indirect Method) Additional Information
Information for Cash Flow Statement completion A. Push Corporation
has 100% control of Summer Corporation on 01/02/20x7. Push
Consolidated Income Statement B. Push Corporation has $195,000
Consolidated Income for 20x7. 12/31/20x7 12/31/20x7 C. Push
Corporation pays a $10,000 Dividend to stockholders. D. Summer
Corporation reports income of $100,000 and pays Dividend of $50,000
in 20x7. Revenue...
Preparing a consolidated income statement—Equity method
with noncontrolling interest and AAP
A parent company purchased a...
Preparing a consolidated income statement—Equity method
with noncontrolling interest and AAP
A parent company purchased a 60% controlling interest in its
subsidiary several years ago. The aggregate fair value of the
controlling and noncontrolling interest was $625,000 in excess of
the subsidiary’s Stockholders’ Equity on the acquisition date. This
excess was assigned to a building that was estimated to be
undervalued by $375,000 and to an unrecorded patent valued at
$250,000. The building asset is being depreciated over a 20-year...
. If a parent company uses full
equity method in accounting for its subsidiary, consolidated net...
. If a parent company uses full
equity method in accounting for its subsidiary, consolidated net
income would be the same as parent company net income EXCEPT
when
a. the parent sold product to the
subsidiary at a gross profit, and the subsidiary still had some
product in inventory.
b. the parent sold product to the
subsidiary at a gross profit, and the subsidiary sold all of the
product.
c. any inter-company product sales
were made during the year.
...
Angela Corporation (a private company) acquired all of the
outstanding voting stock of Eddy Tech, Inc....
Angela Corporation (a private company) acquired all of the
outstanding voting stock of Eddy Tech, Inc. on January 1, 2018, in
exchange for $9,090,000 in cash. At the acquisition date, Eddy
Tech’s stockholders’ equity was $7,300,000 including retained
earnings of $3,050,000.
At the acquisition date, Angela prepared the following fair
value allocation schedule for its newly acquired subsidiary:
Consideration transferred
$
9,090,000
Eddy’s stockholder’s equity
7,300,000
Excess fair over book value
$
1,790,000
to patented technology (5-year
remaining life)
$...
Determining ending consolidated balances in the second
year following the acquisition—Equity method
Assume a parent company...
Determining ending consolidated balances in the second
year following the acquisition—Equity method
Assume a parent company acquired a subsidiary on January 1,
2018. The purchase price was $760,000 in excess of the subsidiary’s
book value of Stockholders’ Equity on the acquisition date, and
that excess was assigned to the following [A] assets:
[A] Asset
Original
Amount
Original
Useful Life
(years)
Property, plant and equipment (PPE), net
$360,000
12
Goodwill
400,000
Indefinite
$760,000
The AAP asset relating to undervalued PPE with...
Assume that your company acquired a subsidiary on January 1,
2012. The purchase price was $700,000...
Assume that your company acquired a subsidiary on January 1,
2012. The purchase price was $700,000 in excess of the subsidiary's
book value of Stockholders' Equity on the acquisition date, and
that excess was assigned to the following [A] assets:
[A] Asset
Original
Amount
Original
Useful Life
(years)
Property, plant and equipment (PPE), net
$350,000
20
Goodwill
350,000
Indefinite
$700,000
The AAP asset relating to undervalued PPE with a 20-year useful
life has been depreciated as part of the parent's...
Preparing a consolidated income statement—Equity method
with noncontrolling interest, AAP and upstream and downstream
intercompany inventory...
Preparing a consolidated income statement—Equity method
with noncontrolling interest, AAP and upstream and downstream
intercompany inventory profits
A parent company purchased a 70% controlling interest in its
subsidiary several years ago. The aggregate fair value of the
controlling and noncontrolling interest was $700,000 in excess of
the subsidiary’s Stockholders’ Equity on the acquisition date. This
excess was assigned to a building that was estimated to be
undervalued by $400,000 and to an unrecorded patent valued at
$300,000. The building asset...
Exercise 4-15 The Bramble Corporation, a private company, began
operations on January 1, 2017. During its...
Exercise 4-15 The Bramble Corporation, a private company, began
operations on January 1, 2017. During its first three years of
operations, Bramble reported net income and declared dividends as
follows: Net income Dividends declared 2017 $54,000 $0 2018 134,000
50,000 2019 164,000 50,000 The following information is for 2020:
Income before income tax $360,000 Correction of prior period error:
understatement of 2018 depreciation expense (before tax) 39,000
Cumulative increase in prior years’ income from change in inventory
method (before tax)...
Jersey Corporation acquired 100 percent of Lime Company on
January 1, 20X7, for $201,000. The trial...
Jersey Corporation acquired 100 percent of Lime Company on
January 1, 20X7, for $201,000. The trial balances for the two
companies on December 31, 20X7, included the following amounts:
Jersey Corporation
Lime Company
Item
Debit
Credit
Debit
Credit
Cash
$
82,000
$
32,000
Accounts
Receivable
68,000
73,000
Inventory
174,000
119,000
Land
80,000
27,000
Buildings and
Equipment
491,000
153,000
Investment in Lime
Co. Stock
254,000
Cost of Goods
Sold
491,000
252,000
Depreciation
Expense
22,000
12,000
Other Expenses
69,000
69,000
Dividends
Declared...