Assume the Chapman Company acquired Abernethy's common stock for $490,000 in cash. As of January 1, 2017, Abernethy's land had a fair value of $90,000, its buildings were valued at $160,000, and its equipment was appraised at $180,000. Chapman uses the equity method for this investment. Prepare consolidation worksheet entries for December 31, 2017, and December 31, 2018.
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- On January 1, 2024, Coronado Company purchased 8,208 shares of Whispering Company's common stock for $124,000. Immediately after the stock acquisition, the statements of financial position of Coronado and Whispering appeared as follows: Assets Cash Accounts receivable Inventory Investment in Whispering Company Plant assets Accumulated depreciation-plant assets Total (b) Liabilities and Owners' Equity Current liabilities Prepare a consolidated balance sheet workpaper as of January 1, 2024. Mortgage notes payable Common stock, $10 par value Other contributed capital Retained earnings Total Cash Accounts Receivable Inventory Investment in Whispering Total Difference between Implied and Book Value Plant Assets Accumulated Depreciation Current Liabilities Mortgage Note Payable Common Stock: Coronado Company Whispering Company Other Contributed Capital Coronado Company Whispering Company Total Retained Earnings: Coronado Company Whispering Company Noncontrolling Interest 38,250 Coronado…1-During 2020, Subsidiary sells land to Parent for $126,000. The land had a book value of $104,000. The land is then sold to a third party for $176,000 in 2024. Parent uses the equity method for the 100% investment. Required:a. Prepare the consolidation entry related to the land sale for 2020.b. Prepare the consolidation entry related to the land sale for 2021.c. Prepare the consolidation entry related to the land for 2024.d. What will be the gain on sale on the 2024 consolidated income statement?LO 3-3a 19. Assume that Chapman Company acquired Abernethy's common stock for $490,000 in cash. As of January 1, 2020, Abernethy's land had a fair value of $90,000, its buildings were valued at $160,000, and its equipment was appraised at $180,000. Chapman uses the equity method for this investment. Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021.
- Stiller Company, an 80% owned subsidiary of Leo Company, purchased land from Leo on March 1, 2020, for $75,000. The land originally cost Leo $60,000. Stiller reported net income of $125,000 and $140,000 for 2020 and 2021, respectively. Leo uses the equity method to account for its investment. On a consolidation worksheet, what adjustment would be made for 2020 regarding the land transfer?Wombat Ltd has acquired all the shares of Emu Ltd. During 2020-2021, the following transactions have occurred: Wombat Ltd acquired a motor vehicle from an external vendor for $35,000 on 1 July 2020, 20% depreciation p.a., and sells it to its subsidiary, Emu Ltd, for $32,000 on the same day. Emu Ltd charges 25% depreciation p.a. on the vehicle. Prepare the consolidation worksheet entries at 30 June 2021 (current year). Prepare the consolidation worksheet entries at 30 June 2022 (next yearOn January 1, 2020, Parent Corporation purchased equipment from its 70% owned subsidiary for $360,000. The total useful life of the equipment was 15 years when Sub originally purchased it on January 1, 2015 for $450,000. Both Parent and Sub use straight- line depreciation. Required: a. Prepare the December 31, 2020 consolidation entry in general journal format. 5. Prepare the December 31, 2023 consolidation entry in general journal format. c. Repeat requirement (b), assuming instead that this had been a downstream sale.
- Pace acquired Saber on January 1, 2021, attributing its $350 million excess of acquisition cost over book value to identifiable intangible assets valued at $100 million, with a 5-year life, and to goodwill. At that time Saber's shareholders' equity was $2,500 million. It is now December 31, 2022, and consolidation entries are prepared. The investment account balance on January 1, 2022 was $3,000 million. Saber reported net income of $200 million in 2022. Goodwill is not impaired in either year, and Saber does not declare dividends. Required a. What was Saber's 2021 reported net income? $ 300 x million b. What was Saber's shareholders' equity on January 1, 2022? $ 2,670 ✓ million c. Calculate Pace's equity in net income of Saber for 2022, using the complete equity method. $ 2,500 x million d. Prepare the eliminating entries needed to consolidate Pace and Saber at December 31, 2022. Enter answers in millions. Ref. Description (C) Equity in net income of Saber Investment in Saber (E)…On January 1, 2020, Barber Corp. paid $1,160,000 to acquire Thompson Co. Thompson maintained separate incorporation. Barber used the equity method to account for the investment. The following information is available for Thompson’s assets, liabilities, and stockholders' equity accounts on January 1, 2020: BookValue FairValueCurrent assets $ 130,000 $ 130,000 Land 75,000 193,000 Building (twenty year life) 250,000 276,000 Equipment (ten year life) 540,000 518,000 Current liabilities 26,000 26,000 Long-term liabilities 124,000 124,000 Common stock 233,000 Additional paid-in capital 389,000 Retained earnings 223,000 Thompson earned net income for 2020 of $134,000 and paid dividends of $51,000 during the year. What is the balance in Barber's Investment…On January 1, 2020, Barber Corp. paid $1,160,000 to acquire Thompson Co. Thompson maintained separate incorporation. Barber used the equity method to account for the investment. The following information is available for Thompson’s assets, liabilities, and stockholders' equity accounts on January 1, 2020: BookValue FairValueCurrent assets $ 130,000 $ 130,000 Land 75,000 193,000 Building (twenty year life) 250,000 276,000 Equipment (ten year life) 540,000 518,000 Current liabilities 26,000 26,000 Long-term liabilities 124,000 124,000 Common stock 233,000 Additional paid-in capital 389,000 Retained earnings 223,000 Thompson earned net income for 2020 of $134,000 and paid dividends of $51,000 during the year. At the end of 2023 the consolidation entry…
- On January 1, 2020, Barber Corp. paid $1,160,000 to acquire Thompson Co. Thompson maintained separate incorporation. Barber used the equity method to account for the investment. The following information is available for Thompson’s assets, liabilities, and stockholders' equity accounts on January 1, 2020: BookValue FairValue Current assets $ 130,000 $ 130,000 Land 75,000 193,000 Building (twenty year life) 250,000 276,000 Equipment (ten year life) 540,000 518,000 Current liabilities 26,000 26,000 Long-term liabilities 124,000 124,000 Common stock 233,000 Additional paid-in capital 389,000 Retained earnings 223,000 Thompson earned net income for 2020 of $134,000 and paid dividends of $51,000 during the year. The 2020 total excess amortization of fair-value allocations is calculated to be?On August 27, 2015, Celgene Corporation acquired all of the outstanding stock of Receptos, Inc., in exchange for $7.6 billion in cash. Referring to Celgene's 2015 financial statements and its July 14, 2015, press release announcing the acquisition, answer the following questions regarding the Receptos acquisition. What accounting method was used, and for what amount, to record the acquisition?Asap