On January 1, Year 5, AB Company (AB) purchased 80% of the outstanding common shares of Dandy Limited (Dandy) for $8,000. On that date, Dandy's shareholders' equity consisted of common shares of $1,000 and retained earnings of $6,000. In negotiating the purchase price at the date of acquisition, it was agreed that the fair values of all of Dandy's assets and liabilities were equal to their carrying amounts and tax base except for the following:
Q: During 2024, a company sells 20 units of inventory. The company has the following inventory purchase…
A: Ending inventory is the amount of inventory that an entity has on hand, at the end of the period. It…
Q: Absorption vs. variable costingPete’s Plant Stands manufactures wooden stands used by plant…
A: The objective of the question is to calculate the value of ending finished goods inventory using…
Q: 9
A: Least squares method of regression is the tool, which is used through accountants in estimating the…
Q: Requirements 1. Allocate the $ 65$65 between MikeMike and BrettBrett using (a) the stand-alone…
A: PackagePer MonthA. Internet access$60B. Phone services15C. Internet access + phone services65Mike…
Q: Village of Hawksbill issued $4,000,000 in 5 percent general obligation, tax-supported bonds on July…
A: Tax free-bonds -A government agency issues tax-free bonds in order to collect money for a certain…
Q: Brief Exercise 1-10 In alphabetical order below are balance sheet items for Young Company at…
A: Balance sheet is a financial statement that shows list of final ending balance of assets,…
Q: Required: Prepare both (a) the journal entry to record the business combination and (b) the balance…
A: In case one company overtake the assets and liabilities of another company, then accounting for…
Q: Calculating Capitalized Interest Kit Company borrows $6 million at 12% on January 1, 2019,…
A: The capitalization of interest refers to the interest cost is added to the cost of assets. The…
Q: Widget Widget Tek Inc.'s original accountant accepted a position with another firm and left in early…
A: Last in First Out ( LIFO )method is where goods purchased at the latest date are sold first. In…
Q: The Wolverine Corporation is working at full production capacity producing 9,000 units of a unique…
A: (Selling price per unit-Total Variable cost per unit)xUnits=Opportunity Cost($38-$19)x3,500=$66,500
Q: On January 1, 2020, Commonwealth Inc. leases equipment to Tap Inc. The equipment has a fair value of…
A: Lease is a contractual agreement in which, the lessor is the owner of a piece of equipment. It…
Q: January 1, 2022 Assets (b) Liabilities Owner's equity December 31, 2022 Assets Liabilities Owner's…
A: Owner's equity is the capital invested by the owner in the Company and is recorded in the Balance…
Q: The amount of federal income taxes that you are required to pay is based on your filing status, your…
A: Taxable income refers to the income on which the taxpayer is liable to pay the desired tax as stated…
Q: Ramos Company has the following unit costs: Variable manufacturing overhead Direct materials Direct…
A: Absorption costing allocates all manufacturing costs, including fixed overhead, to products,…
Q: Norred Corporation has provided the following information: Direct materials Direct labor Variable…
A: The objective of the question is to calculate the total amount of indirect manufacturing cost…
Q: S Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution…
A: Degree of operating leverage(DOL) :— It is calculated by dividing total contribution margin by net…
Q: Required information Skip to question [The following information applies to the questions displayed…
A: Return on asset:-This ratio indicates that, how well company is generating net income by using…
Q: Superior Company provided the following data for the year ended December 31 (all raw materials are…
A: Cost of goods manufactured is the cost incurred on the making of the goods that are to be…
Q: Question 9 of 15. Corporal Dallas Cole is both domiciled and stationed in California all year.…
A: Form 540 with Schedule S: This option is correct. Form 540 is the California Resident Income Tax…
Q: Problem 6-4B (Algo) Report inventory using lower of cost and net realizable value (LO6-6) A home…
A: Inventory valuation refers to the process of computing the monetary value of the inventory in hand,…
Q: On December 31, 2023, Ivanhoe Company reported the following information in its financial…
A: Journal entries are the primary reporting of the business transactions in the books of accounts.…
Q: Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and…
A: Gross profit is the amount of money earned by the entity after deducting cost of goods sold from the…
Q: 1. You plan to invest $10,000 in a general partnership. There will be four other general partners,…
A: In General partnership , the liability of partners is unknown, uncertain and unlimited. Irrespective…
Q: Which of the following would be an example of a "transactional" adjustment made to a comparable…
A: In the context of comparable sales analysis and real estate appraisal, a transactional adjustment is…
Q: Montoure Company uses a perpetual inventory system. It entered into the following calendar-year…
A: The inventory valuation method is the method used to determine the cost of goods sold and ending…
Q: The actual information pertains to the month of September. As a part of the budgeting process,…
A: Static budget is that budget which does not change or this is fixed one. Static budget in business…
Q: White Ski Resorts operates a series of ski resorts in northern Europe and reports under IFRS. On…
A: Journal entries are made to record the transactions as the first process in the books of accounts…
Q: A trial balance has total debits of $29,000 and total credits of $38,000. Which one of the following…
A: Trial Balance is the statement that records all the assets, liabilities, stockholders' equity,…
Q: Calculating Capitalized Interest Kit Company borrows $6 million at 12% on January 1, 2019,…
A: Capitalized interest is the amount that is unpaid as the interest amount on the principal loan…
Q: GHI Inc. has commenced work on three jobs during its first year of operations. Costs incurred for…
A: The Cost of Goods Available for sale represents the total cost incurred by a company for producing…
Q: A U.S. company owns an 80% interest in a company located on Mars. Martian currency is called the…
A: The exchange rate indicates the value of one currency in terms of another country's currency. For…
Q: During 2024, its first year of operations, Baginski Steel Corporation reported a net operating loss…
A: Answer:- If a company incurs any loss in a periodic year then as per the tax rate it is carried…
Q: TB MC Qu. 8-61 The following are budgeted... The following are budgeted data: Sales in units…
A: Direct material purchase budget:- This budget is prepared to estimate the number of units and cost…
Q: Joe’s Beverage Co produces bottled water and has provided the following information for the month of…
A: Multi Step Income Statement is one of financial statement being prepared in business. It shows all…
Q: Warm Hands, a small company based in Prince Edward Island, manufactures and sells two types of…
A: Income statement is the one which is prepared by the entity for the purpose of determining the…
Q: On January 1, 2023, Crane Inc. entered into a futures contract to purchase U.S. $5,890 for CAD…
A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…
Q: Dividing partnership income Carmelo Fernandez and Bobby Morett formed a partnership, investing…
A: The partnership comes into existence when two or more persons agree to do the business and share…
Q: Prepare the journal entries for disposal
A: Journal Entries for Disposal of the Asset are:Sr. No.ParticularsDebit ($)Credit($)1Cash/Bank…
Q: ! Required information [The following information applies to the questions displayed below.] Oslo…
A: MARGIN OF SAFETYSales Above the Break-Even Point is called Margin of Safety Sales.The margin of…
Q: Dog Dandy distributes a dog collar made of wooden beads that sells for $40 per unit. Variable…
A: Since you have posted a question with multiple sub parts, we will provide the solution only to the…
Q: On April 1, 2024, Titan Ca classifies the equipment
A: Straight line depreciation is the standard method for recognizing the carrying amount of a fixed…
Q: Hesson, Inc., manufactures and sells two products Product F3 and Product FO. Data conceming the…
A: The activity-based costing (ABC) method to determine production costs. It divides overhead expenses…
Q: Required information [The following information applies to the questions displayed below.] Oslo…
A: MARGIN OF SAFETYSales Above the Break-Even Point is called Margin of Safety Sales.The margin of…
Q: 29. The sales mix percentages for Novotna's Boston and Seattle Divisions are 70% and 30%. The…
A: Break even point :— It is the point of production where total cost is equal to total revenue. At…
Q: Selected financial data regarding current assets and current liabilities for Queen's Line, a…
A: Current ratio is the ratio between total current assets to total current liabilities. It is…
Q: hristmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and…
A: Lets understand the basics.Service department cost is allocated to production department using,(1)…
Q: When would a sole proprietorship use IFRS? Select one: a. If it ho plans to become public in the…
A: A sole proprietorship would typically use IFRS (International Financial Reporting Standards) if…
Q: - A & B Partnership's 1st year of business - A invests 100,000 B invests 50,000 Agreement on how to…
A: The partnership comes into existence when two or more persons agree to do the business and share…
Q: An analysis of the accounts of Marin Company reveals the following manufacturing cost data for the…
A: WIP Inventory -The phrase "work in process" (WIP) inventory describes items that are partially…
Q: Prepare all of Alamar's 2024 journal entries to apply the equity method to this investment.
A: General Journal Debit ($)Credit ($) Investment in Burks Inc a/c210,000 To Cash a/c210,000[Being…
A-1
Step by step
Solved in 4 steps with 2 images
- Pesto Corporation acquired 75 percent of Sauce Corporation's common stock on January 1, 20X7, for $306,000 in cash. At the acquisition date, the book values and fair values of Sauce's assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 25 percent of the total book value of Sauce. The stockholders' equity accounts of the two companies at the date of purchase are as follows: Common Stock ($10 par value) Additional Paid-In Capital Retained Earnings Total Stockholders' Equity Pesto Corporation $ 408,000 224,000 367,000 $999,000 Sauce Corporation. $ 188,000 57,000 163,000 $ 408,000 Required: a. What amount will be assigned to the noncontrolling interest on January 1, 20X7, in the consolidated balance sheet? b. Prepare the stockholders' equity section of Pesto and Sauce's consolidated balance sheet as of January 1, 20X7.On 30 June 20X7, Edison Ltd acquired all the assets and liabilities of Oliver Ltd, with Oliver Ltd going into liquidation. In exchange for these assets and liabilities, Edison Ltd issued 60,000 shares, and the fair value of each share at the acquisition date is $4. Costs of issuing these shares amounted to $2,000. Legal costs associated with the acquisition of Oliver Ltd amounted to $1,500. The assets and liabilities of Oliver Ltd at 30 June 20X7 were as follows: Carrying amount Fair value Cash 12 000 12 000 Accounts receivable (Cost: $45 000, Estimated uncollectable debts: $5000) 40 000 36 000 Inventory 60 000 76 000 Plant (Cost: $200 000, Accumulated 120 000 145 000 depreciation: $80 000) Accounts payable 40 000 40 000 Additional information: • Oliver Ltd had not recorded an internally developed patent. Edison Ltd valued this at $26,000. Oliver Ltd had not recorded a legal claim as a liability due to the uncertainty of an outcome. Edison Ltd estimated the fair value of this…Hanley acquired 85% of the ordinary share capital of Craig on 30 December 20X7 for $80,000. At this date the net assets of Craig were$95,000. NCI is valued using the fair value method and the fair value of the NCI on the acquisition date is $30,000 What goodwill arises on the acquisition?
- On January 2, 2021, ABC Co. acquired 80% of XYZ Co. ordinary shares for P810,000. An amount of P37,500 of the excess is attributable to goodwill and the balance to a depreciable assets with an economic life of ten years. NCI is measured at fair value on the date of acquisition. On the date of acquisition, shareholder's equity accounts of the two entities were as follows: АВС Ordinary Shares - 1,312,500 Retained Earnings - 1,950,000 XYZ Ordinary Shares - 300,000 Retained Earnings - 525,000 On December 31, 2021, XYZ reported net income of 131,250 and paid dividends of P172,500. Goodwill have been impaired and should be reported at P7,500 on December 31, 2021. #6. What is the non-controlling interest in profit of XYZ on December 31, 2021? Select the correct response: 26,250.00 17,250.00 23,250.00 23,437.50Proud Corporation acquired 80 percent of Spirited Company's voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Spirited at that date. Assume that the accumulated depreciation on depreciable assets was $52,000 on the acquisition date. Proud uses the equity method in accounting for its ownership of Spirited. On December 31, 20X4, the trial balances of the two companies are as follows: Item Current Assets Depreciable Assets Investment in Spirited Company Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities Long-Term Debt Common Stock Retained Earnings Sales Income from Spirited Company $ Proud Corporation Debit 255,000 518,000 133,280 23,000 148,000 53,000 Credit $ 200,000 63,000 127,880 193,000 277,000 231,000 38,400 $1,130,280 $1,130,280 Spirited Company Credit Debit $169,000 311,000 13,000 85,000 25,400 $603,400 $ 78,000 43,000 192,400 87,000…Proud Corporation acquired 80 percent of Spirited Company's voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Spirited at that date. Assume that the accumulated depreciation on depreciable assets was $60,000 on the acquisition date. Proud uses the equity method in accounting for its ownership of Spirited. On December 31, 20X4, the trial balances of the two companies are as follows: Item Current Assets Depreciable Assets Investment in Spirited Company Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities Long-Term Debt Corman Stock Retained Earnings Sales Income from Spirited Company Proud Corporation Debit $ 235,080 500,000 152,000 Credit Spirited Company Debit $ 150,000 Credit 900,080 25,000 15,088 150,000 90,000 58,800 15,000 $ 200,000 $ 98,000 50,000 180,000 128,008 200,000 284 898 230,000 138,000 70,000 148,008 28,000 $ 1,112,000…
- Proud Corporation acquired 80 percent of Spirited Company's voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Spirited at that date. Assume that the accumulated depreciation on depreciable assets was $60,000 on the acquisition date. Proud uses the equity method in accounting for its ownership of Spirited. On December 31, 20X4, the trial balances of the two companies are as follows: Item Current Assets Depreciable Assets Investment in Spirited Company Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities Long-Term Debt Common Stock Retained Earnings Sales Income from Spirited Company Proud Corporation Debit $ 235,000 500,000 152,000 25,000 150,000 50,000 Credit Spirited Company Debit Credit $ 150,000 300,000 15,000 90,000 15,000 $ 200,000 $ 90,000 70,000 50,000 100,000 120,000 200,000 100,000 284,000 70,000 230,000 148,000 28,008 $ 1,112,000…On January 1, Year 1, East Company purchased West Company. East Company paid $670,000 cash and assumed all of West Company's liabilities. West's books showed tangible assets of $578,000, liabilities of $54,000, and equity of $632,000. An appraiser assessed the fair market value of the tangible assets at $622,000 at the date of acquisition. On December 31, Year 4 East determines that the goodwill suffered a $32,000 permanent impairment. However, on December 31, Year 6 East estimated that it had recovered $12,000 of the impairment that had previously been considered to be permanent impairment. Based on this information, the book value of the goodwill shown on the December 31, Year 6 balance sheet is: Multiple Choice O O O $102,000. $134,000. $54,000. $70,000.On January 1, 2018, Johnsonville Enterprises, Inc., acquired 80 percent of Stayer Company’s outstanding common shares in exchange for $3,000,000 cash. The price paid for the 80 percent ownership interest was proportionately representative of the fair value of all of Stayer’s shares.At acquisition date, Stayer’s books showed assets of $4,200,000 and liabilities of $1,600,000. The recorded assets and liabilities had fair values equal to their individual book values except that a building (10-year remaining life) with book value of $195,000 had an appraised fair value of $345,000. Stayer’s books showed a $175,500 carrying amount for this building at the end of 2018.Also, at acquisition date Stayer possessed unrecorded technology processes (zero book value) with an estimated fair value of $1,000,000 and a 20-year remaining life. For 2018 Johnsonville reported net income of $650,000 (before recognition of Stayer’s income), and Stayer separately reported earnings of $350,000. During 2018,…
- Parent Inc. purchased 60,000 of the outstanding (specified below) voting shares of Sub, for $625,000 (the total number of outstanding shares varies in the questions below) on January 1, 2021. On the date of acquisition, Sub's common shares and retained earnings were valued at $235,000 and $280,000, respectively. Subs book values approximated its fair values on the acquisition date with the exception of a patent, for which the fair value of the patent was $40,000 greater than book value. Q: Assume that the total number of outstanding shares for Sub was, 78,000 (remember Parent purchased 60,000). On January 2, 2021, Parent sold 12,000 shares of Sub on the open market for $108,000. What would be the amount of the gain or loss on the sale of these shares?On January 1, 2021, Johnsonville Enterprises, Inc., acquired 80 percent of Stayer Company's outstanding common shares in exchange for $3,000,000 cash. The price paid for the 80 percent ownership interest was proportionately representative of the fair value of all of Stayer's shares. At acquisition date, Stayer's books showed assets of $4,200,000 and liabilities of $1,600,000. The recorded assets and liabilities had fair values equal to their individual book values except that a building (10-year remaining life) with book value of $195,000 had an appraised fair value of $345,000. Stayer's books showed a $175,500 carrying amount for this building at the end of 2021. Also, at acquisition date Stayer possessed unrecorded technology processes (zero book value) with an estimated fair value of $1,000,000 and a 20-year remaining life. For 2021, Johnsonville reported net income of $650,000 (before recognition of Stayer's income), and Stayer separately reported earnings of $350,000. During 2021,…On 1 July 2022, Dean Ltd acquired the remaining 80% of the issued shares of Lewis Ltd for shares in Dean Ltd with a fair value of $1 000 000. At that date, the financial statements of Lewis Ltd showed the following information. All the assets and liabilities of Lewis Ltd were recorded at amounts equal to their fair values at the acquisition date, except some equipment recorded at $50 000 below its fair value with a related accumulated depreciation of $80 000. Assume the equipment has not been revalued in the subsidiaries accounts. Also, Dean Ltd identified at acquisition date a contingent liability related to a lawsuit where Lewis Ltd was sued by a former supplier and attached a fair value of $40 000 to that liability. The previous held interest by Dean Ltd in Lewis Ltd (ie 20% of the issued shares) was recognised by in Dean Ltd.’s accounts at the fair value at acquisition date of $250 000. Dean Ltd incurred $15 000 in acquisition related costs including $10 000 in share issue costs.…