a market price of BD0.400 on the date the acquisition was announced and BD0.800 on the date the acquisition was completed, for all of BELL Corporation ordinary shares. The book value of net assets of BELL Corporation at the date of acquisition was BD10,000. On that date, the fair value of BELL Corporation assets and liabilities equalled their respective carrying amounts with the exception of property, plant and equipment (PPE) that exceeded its book value by BD120,00
Q: On July 1, 2016, Killearn Company acquired 120,000 of the outstanding shares of Shaun Company for…
A: Equity income to be recognized in each year are as follows: Equity income as on 2016…
Q: On July 1, 2016, Killearn Company acquired 88,000 of the outstanding shares of Shaun Company for $13…
A: a.
Q: On January 1, 2018, Sledge had common stock of $270,000 and retained earnings of $410,000. During…
A: 1. Worksheet entries were as follows:
Q: SD acquired the net assets of both GM and SR. Paying cash in the amount of P185,000 and by issuing…
A: After the merger, the retained earnings of the acquired company become retained earnings of the…
Q: On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000.…
A: The investment in shares gets increased by profits and decreased by dividend received.
Q: Arther Corporation acquired all of the outstanding $10 par voting common stock of Trent Inc., on…
A:
Q: On January 1, 2018, Sledge had common stock of $120,000 and retained earnings of $260,000. During…
A:
Q: On 1/1/2017, Cali Co. acquired all of Malibu's outstanding common stock by issuing 20,000 shares of…
A:
Q: On January 1, 2020, Holland Corporation paid $9 per share to a group of Zeeland Corporation…
A: Consolidated Financial Statements: It is the group financial statements in which the assets,…
Q: On July 1, 2016, Killearn Company acquired 80,000 of the outstanding shares of Shaun Company for $12…
A: Formulas for the above table:
Q: On January 1, 2020, Holland Corporation paid $7 per share to a group of Zeeland Corporation…
A: A consolidation worksheet is a template that is used to create consolidated accounts for a parent…
Q: On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000.…
A: Amount of profit in 2018 P1,60,000 Share of Profit (P160000 * 25%) P40,000 Account…
Q: On January 1, 2017, Mona, Inc., acquired 80 percent of Lisa Company’s common stock as well as 60…
A: “Since you have posted a question with multiple sub-parts, we will solve mentioned three sub-parts…
Q: On December 31, 2014, how much should MARIE CORP. carry its investment in CURIE INC.?
A: In case of equity method, the purchase value of investment would be adjusted for share in equity for…
Q: On January 1, 2021, ABC Co. acquired all of the identifiable assets and assumed all of the…
A: SOLUTION GOODWILL = PURCHASE PRICE OF TARGET COMPANY -(FAIR MARKET VALUE OF ASSETS - FAIR MARKET…
Q: Following are selected account balances from Penske Company and Stanza Corporation as of December…
A: Given information is: On January 1, 2018, Penske acquired all of Stanza’s outstanding stock for…
Q: In December 2017, Parent Company started negotiating for the acquisition of Sub Company. The offer…
A: Total Assets of Parent Company immediately after Merger: Par Particulars Amount Cash (72,50,000…
Q: On March 1, 2017, Mindoro Company purchased 40% of the outstanding ordinary shares of Garapal…
A: Fair value of investment is the price of the asset on which buyer is interested to purchase and…
Q: On January 1, 2013, the Sara Company entered into a transaction for acquisition of assets and…
A: SOLUTION- WORKING NOTE- SARA'S APIC ON ACQUISITION DATE $1080. APIC ADJUSTMENTS RELATED TO ANA…
Q: On January 1, 2013, the Sara Company entered into a transaction for acquisition of assets and…
A: An acquisition occurs when one firm buys the majority or all of the stock of another firm in order…
Q: On March 1, 2017, Mindoro Company purchased 40% of the outstanding ordinary shares of Garapal…
A: Investment: It is an asset or item which is purchased and held to generate income or for…
Q: On July 1, 2016, Roland Company exchanged 18,000 of its $45 fair value ($1 par value) shares for all…
A: Consolidated balance sheet is the financial statement prepared by the entity acquiring another…
Q: On January 1, 2008, Pedestal Company purchased 80% of the outstanding shares of Starlet
A: Working :- Net income of Starlet Co for 2008 : P 100,000…
Q: On January 1, 2013, the Moody Company entered into a transaction for 100% of the outstanding common…
A: Following assets are deemed to undervalued: Inventory: $280 + $10 = $290 Land: $360 + $40 = $400…
Q: On January 1, 2015, Artic Company acquires an 80% interest in Calco Company for $400,000. On the…
A:
Q: July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At…
A: The investment in Associate company gets increased with profits and decreased with dividend…
Q: On January 1, 2015, Port Company acquires 8,000 shares of Solvo Company by issuing 10,000 of its…
A:
Q: How much is the non- controlling interest in net assets on December 31, 2016?
A: Galaxy corporation acquired 80% of the outstanding shares of united company on June 1, 2016 for…
Q: On April 1, 2018, Gangnam Company purchased 25,000 ordinary shares of Psy Inc. at an amount that…
A: Psy Inc is an associate enterprise of Gangnam Company since it is holding 25% (25,000/100,000) of…
Q: On January 2, 2020, Parker Company purchased 100% of the outstanding ordinary shares of Pocket…
A: The consolidated statement shows the financial position of a group, when the acquired shares are…
Q: On January 1, 2013, the Sara Company entered into a transaction for acquisition of assets and…
A:
Q: On July 1, 2016, Killearn Company acquired 88,000 of the outstanding shares of Shaun Company for $13…
A: Given: As of July 1, 2016, the investee had assets with a book value of $3 million and liabilities…
Q: In December 2017, Parent Company started negotiating for the acquisition of Sub Company. The offer…
A: The Total assets of the Parent Company immediately after the merger shall be calculated as follows:…
Q: At the beginning of 2022, CPA Company purchased 20% of ACCA Corp’s ordinary shares outstanding for…
A: The equity method refers to an accounting method employed to compute and report the income on the…
Q: July 1, 2015, Issue Company purchased 80% of the outstanding shares of Intrigue Company at a cost of…
A: The consolidated net income is calculated below, Issue purchased 80% Intrigue Company At Cost…
Q: On July 31, 2020, Sunland Company paid $2,850,000 to acquire all of the common stock of Conchita…
A: Goodwill: Goodwill is an intangible asset. It is defined as the excess of cost of an acquired…
Q: On January 1, 2020, Pinnacle Corporation exchanged $3,568,500 cash for 100 percent of the…
A: Consolidation is a process of acquiring many small companies by the large ones by obtaining the…
Q: On December 31, 2016, Akron, Inc. purchased 5 Percent of Zip Company’s common shares on the open…
A: a.1 a.2
Q: In December 2017, Parent Company started negotiating for the acquisition of Sub Company. The offer…
A: Particulars Amount (In P) Cash - Accounts Receivable 1065000 Inventory (FMV) 1300000 Shares…
Q: On 1 July 2015, Ausra purchased 75% of Danute by way of a share exchange of two new shares in Ausra…
A: Statement of comprehensive income is the statement that included net income, unrealized incomes,…
Q: n January 1, 2021, ABC Co. acquired all of the identifiable assets and assumed all of the…
A: solution given Number of ABC co’s share 60000 Par value per share 40 Fair value of…
Q: On May 31,2018, Fedex Company acquired Aramex Company's outstanding stock by paying $400,000 cash…
A: Acquisition is the taking over the assets and obligations of one company by the other to take over…
Q: Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing…
A: Note: As per our guidelines, we will only solve the first three subparts. 1. a. Allocation of the…
Q: On January 1, 2018, the Moody Company entered into a transaction for 100% of the outstanding common…
A: Consolidate amount of land at acquisition = land amount of Moody + land amount of Osorio…
Q: On January 1, 2013, the Sara Company entered into a transaction for acquisition of assets and…
A: Combined additional paid-in capital = Sara's additional paid-in capital on acquisition date +…
prepare of the related
On 1 January 2017, FIBERBOATS acquired 100% of BELL Corporation. FIBERBOATS issued 50,000 shares of its BD0.600 par ordinary shares, with a market price of BD0.400 on the date the acquisition was announced and BD0.800 on the date the acquisition was completed, for all of BELL Corporation ordinary shares. The book value of net assets of BELL Corporation at the date of acquisition was BD10,000. On that date, the fair value of BELL Corporation assets and liabilities equalled their respective carrying amounts with the exception of property, plant and equipment (PPE) that exceeded its book value by BD120,000. The fair value of BELL’s identifiable intangibles (in-process research and development) is BD70,000. The in-process research and development will be amortized over 5 years.
Step by step
Solved in 2 steps
- Nascent, Inc., acquires 60 percent of Sea-Breeze Corporation for $414,000 cash on January 1, 2015. The remaining 40 percent of the Sea-Breeze shares traded near a total value of $276,000 both before and after the acquisition date. On January 1, 2015, Sea-Breeze had the following assets and liabilities:The companies’ financial statements for the year ending December 31, 2018, follow:Answer the following questions:a. How can the accountant determine that the parent has applied the initial value method?b. What is the annual excess amortization initially recognized in connection with this acquisition?c. If the parent had applied the equity method, what investment income would the parent have recorded in 2018?d. What amount should the parent report as retained earnings in its January 1, 2018, consolidated balance sheet?e. What is consolidated net income for 2018 and what amounts are attributable to the controlling and noncontrolling interests?f. Within consolidated statements at January 1,…On January 1, 2017, Holland Corporation paid $8 per share to a group of Zeeland Corporation shareholders to acquire 60,000 shares of Zeeland’s outstanding voting stock, representing a 60 percent ownership interest. The remaining 40,000 shares of Zeeland continued to trade in the market close to its recent average of $6.50 per share both before and after the acquisition by Holland. Zeeland’s acquisition date balance sheet follows:On January 1, 2017, Holland assessed the carrying amount of Zeeland’s equipment (5-year remaining life) to be undervalued by $55,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $285,000. Zeeland’s acquisition-date fair values for its current assets and liabilities were equal to their carrying amounts. Zeeland books showed 260,000 for net stockholder equity Any remaining excess of Zeeland’s acquisition-date fair value over its book value was attributed to goodwill.The companies’ financial statements for…On January 1, 2017, Holland Corporation paid $8 per share to a group of Zeeland Corporation shareholders to acquire 60,000 shares of Zeeland’s outstanding voting stock, representing a 60 percent ownership interest. The remaining 40,000 shares of Zeeland continued to trade in the market close to its recent average of $6.50 per share both before and after the acquisition by Holland. Zeeland’s acquisition date balance sheet follows:On January 1, 2017, Holland assessed the carrying amount of Zeeland’s equipment (5-year remaining life) to be undervalued by $55,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $285,000. Zeeland’s acquisition-date fair values for its current assets and liabilities were equal to their carrying amounts. Any remaining excess of Zeeland’s acquisition-date fair value over its book value was attributed to goodwill.The companies’ financial statements for the year ending December 31, 2018, follow:At year-end, there…
- On June 30, 2016, Gab Company purchased 25% of the outstanding ordinary shares of IB Co. at a total cost of P2,100,000. The book value of IB Co.’s net assets on acquisition date was P7,200,000. For the following reasons, Gab was willing to pay more than book value for the IB Co. shares: IB Co. has depreciable assets with a current fair value of P180,000 more than their book value. These assets have a remaining useful life of 10 years. IB Co. owns a tract of land with a current fair value of P900,000 more than its carrying amount. All other identifiable tangible and intangible assets of IB Co. have current fair values that are equal to their carrying amounts. IB Co. reported net income of P1,620,000, earned evenly during the current year ended December 31, 2016. Also in the current year, it declared and paid cash dividends of P315,000 to its ordinary shareholders. Market value of IB Co.’s ordinary shares at December 31, 2016 is P9 million. Cabbage Company’s financial year-end is…On January 1, 2017, Holland Corporation paid $8 per share to a group of Zeeland Corporation shareholders to acquire 60,000 shares of Zeeland’s outstanding voting stock, representing a 60 percent ownership interest. The remaining 40,000 shares of Zeeland continued to trade in the market close to its recent average of $6.50 per share both before and after the acquisition by Holland. Zeeland’s acquisition date balance sheet follows:On January 1, 2017, Holland assessed the carrying amount of Zeeland’s equipment (5-year remaining life) to be undervalued by $55,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $285,000. Zeeland’s acquisition-date fair values for its current assets and liabilities were equal to their carrying amounts. Zeeland books showed 260,000 for net stockholder equity Any remaining excess of Zeeland’s acquisition-date fair value over its book value was attributed to goodwill.The companies’ financial statements for…On January 1, 2015, Pomegranate Company acquired 80% of the voting stock of Starfruit Company for $47,100,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was $6,900,000. Starfruit's book value was $12,000,000 at the date of acquisition. Starfruit's assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10-year life, straight-line) was overvalued by $13,000,000. Starfruit Company had previously unreported intangible assets, with a market value of $16,000,000 and 5-year life, straight- line, which were capitalized following GAAP. Additional information: Pomegranate uses the complete equity method to account for its investment in Starfruit on its own books. Goodwill recognized in this acquisition was impaired by a total of $1,000,000 in 2015 and 2016, and by $250,000 in 2017. It is now December 31, 2017, the accounting year-end.Here is Starfruit Company's trial balance at…
- On June 30, 2016, Gab Company purchased 25% of the outstanding ordinary shares of IB Co. at a total cost of P2,100,000. The book value of IB Co.’s net assets on acquisition date was P7,200,000. For the following reasons, Gab was willing to pay more than book value for the IB Co. shares: IB Co. has depreciable assets with a current fair value of P180,000 more than their book value. These assets have a remaining useful life of 10 years. IB Co. owns a tract of land with a current fair value of P900,000 more than its carrying amount. All other identifiable tangible and intangible assets of IB Co. have current fair values that are equal to their carrying amounts. IB Co. reported net income of P1,620,000, earned evenly during the current year ended December 31, 2016. Also in the current year, it declared and paid cash dividends of P315,000 to its ordinary shareholders. Market value of IB Co.’s ordinary shares at December 31, 2016 is P9 million. Cabbage Company’s financial year-end is…On 1 July 2014 Padma Ltd acquires 25 per cent of the issued capital of Jamuna Ltd for a cash consideration of $360000.At the date of acquisition, the shareholders’ equity of Jamuna Ltd is: Share capital $450000 Retained earnings $300000 Total shareholders’ equity $750000 Additional information On the date of acquisition, buildings have a carrying amount in the accounts of Jamuna Ltd of $240000 and a market value of $300000. The buildings have an estimated useful life of 10 years after 1 July 2014. For the year ending 30 June 2015 Jamuna Ltd records an after-tax profit of $90000, from which it pays a dividend of $30000. For the year ending 30 June 2016 Jamuna Ltd records an after-tax profit of $300000, from which it pays a dividend of$150000. Assume a tax rate of 30% is assumed Required Apply equity method of accounting to: (a)Calculate the amount of goodwill at the date of acquisition of Jamuna Ltd (b)Prepare the journal entries for the year…On January 1, 2015 ,Pub Corporation made a significant acquisition, purchasing 75 percent of SubCorporation's outstanding voting stock for a total of $4,200,000. Sub Corporation's stockholders'equity at that time was made up of the following components (all values in thousands):Capital stock with a par value of $10: $2,000Additional paid-in capital: $1200Retained earnings as of December 31, 2014: $1500Total stockholders' equity: $4700The surplus fair value of the net assets obtained from this acquisition was allocated as follows: 10percent to underappreciated inventory (which was subsequently sold in 2015), 40 percent tounderappreciated plant assets with a remaining useful life of eight years, and the remaining 50 percentto goodwill.Fast forward to December 31, 2019, and we have the comparative trial balances for both PubCorporation and Sub Corporation.…
- On January 1, 2015, Pub Corporation made a significant acquisition, purchasing 75 percent of SubCorporation's outstanding voting stock for a total of $4,200,000. Sub Corporation's stockholders'equity at that time was made up of the following components (all values in thousands):Capital stock with a par value of $10: $2,000Additional paid-in capital: $1200Retained earnings as of December 31, 2014: $1500Total stockholders' equity: $4700The surplus fair value of the net assets obtained from this acquisition was allocated as follows: 10percent to underappreciated inventory (which was subsequently sold in 2015), 40 percent tounderappreciated plant assets with a remaining useful life of eight years, and the remaining 50 percentto goodwill.Fast forward to December 31, 2019, and we have the comparative trial balances for both PubCorporation and Sub Corporation. Pub SubOther assets—net $5,845 $4500Investment in Sub—75% 3,640 —Expenses (including cost of sales) 5,285 800Dividends 600 300 $15370…On January 1, 2015, Pomegranate Company acquired 80% of the voting stock of Starfruit Company for $70,000,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was $9,400,000. Starfruit's book value was $11,600,000 at the date of acquisition. Starfruit's assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10-year life, straight-line) was overvalued by $13,000,000. Starfruit Company had previously unreported intangible assets, with a market value of $16,000,000 and 5-year life, straight-line, which were capitalized following GAAP. Additional information: Pomegranate uses the complete equity method to account for its investment in Starfruit on its own books. Goodwill recognized in this acquisition was impaired by a total of $3,000,000 in 2015 and 2016, and by $1,000,000 in 2017. It is now December 31, 2017, the accounting year-end. Here is Starfruit Company's trial balance at…On January 1, 2023, Tamarisk Company issued 1,450 of its $20 par value common shares with a fair value of $60 per share in exchange for the 2,000 outstanding common shares of Sheffield Company in a purchase transaction. Registration costs amounted to $2,500, paid in cash. Just prior to the acquisition, the balance sheets of the two companies were as follows: Cash Accounts receivable (net) Inventory Plant and equipment (net) Land Total assets Accounts payable Notes payable Common stock, $20 par value Other contributed capital Retained earnings Total equities Tamarisk Company $83,000 103,000 56,000 95,000 23,500 $360,500 $63,000 89,500 100,000 60,000 48,000 $360,500 Sheffield Company $12,600 18,000 25,000 46,500 22,000 $124,100 $19,500 30,000 40,000 27,500 7,100 $124,100 Any difference between the book value of equity and the value implied by the purchase price relates to goodwill.