On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuinga $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was asfollows:ww wwwMinor CompanyBalance Sheetwwww n nAssetsLiabilities and Owners' Equity$40,000$55,000280,000$335,000CashNotes PayableCapitalAcc. Receivable80,000InventoryBuildings(net)Equipment(net)PatentsTrademarks120,00050,00030,0005,00010,000$335,000wwAn appraisal indicated that the fair market value of the receivables was $75,000, and thefair market value of inventory and buildings were $110,000 and $70,000 respectively.According to the appraisal, the patents were worthless.Required: Prepare the journal entry to be record the purchase by Grand Corp.ww w

The journal entry to be recorded by Grand Co for the purchase of Minor Co is shown hereunder :

On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as follows: wwwwww Minor Company Balance Sheet Assets Liabilities and Owners' Equity $40,000 $55,000 280,000 $335,000 Cash Notes Payable binimin Acc. Receivable 80,000 Capital 120,000 Inventory Buildings(net) Equipment(net) Patents 50,000 30,000 5,000 Trademarks 10,000 $335,000 An appraisal indicated that the fair market value of the receivables was $75,000, and the fair market value of inventory and buildings were $110,000 and $70,000 respectively. According to the appraisal, the patents were worthless. Required: Prepare the journal entry to be record the purchase by Grand Corp. www

On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as follows: wwwwww Minor Company Balance Sheet Assets Liabilities and Owners' Equity $40,000 $55,000 280,000 $335,000 Cash Notes Payable binimin Acc. Receivable 80,000 Capital 120,000 Inventory Buildings(net) Equipment(net) Patents 50,000 30,000 5,000 Trademarks 10,000 $335,000 An appraisal indicated that the fair market value of the receivables was $75,000, and the fair market value of inventory and buildings were $110,000 and $70,000 respectively. According to the appraisal, the patents were worthless. Required: Prepare the journal entry to be record the purchase by Grand Corp. www

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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I. On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as follows: Minor Company Balance Sheet Assets Liabilities and Owners' Equity Cash $40,000 $55,000 Notes Payable Capital wwww w Acc. Receivable 80,000 120,000 280,000 Inventory $335,000 Buildings(net) Equipment(net) 50,000 30,000 Patents 5,000 Trademarks 10,000 $335,000 An appraisal indicated that the fair market value of the receivables was $75,000, and the fair market value of inventory and buildings were $110,000 and $70,000 respectively. According to the appraisal, the patents were worthless. Required: Prepare the journal entry to be record the purchase by Grand Corp.
On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as follows: 1. Minor Company Balance Sheet Assets Liabilities and Owners' Equity Cash $40,000 Notes Payable $55,000 Acc. Receivable 80,000 Capital 280,000 Inventory 120,000 $335,000 Buildings(net) Eguipment(net) 50,000 30,000 Patents 5,000 Trademarks 10,000 $335,000 An appraisal indicated that the fair market value of the receivables was $75,000, and the fair market value of inventory and buildings were $110,000 and $70,000 respectively. According to the apRraisal, the patents were worthless. Required: Prepare the journal entry to be record the purchase by Grand Corp.
On July 1, 2018, Aeroplus Corporation purchased Johnson Company by paying $187,500 cash and issuing a $65,000 note payable to Steve Johnson. At July 1, 2018, the balance sheet of Johnson Company was as follows: Cash $ 38,500Accounts payable$160,000Receivables 66,500Stockholders’ equity 166,250Inventory 75,000$326,250Land 30,000Buildings (net) 56,250Equipment (net) 52,500Copyrights 7,500 $326,250The recorded amounts all approximate current values except for land (worth $45,000), inventory (worth $93,750), and copyrights (worth $11,250).Instructions(a) Prepare the July 1 entry for Aeroplus Corporation to record the purchase.(b) Prepare the December 31 entry for Aeroplus Corporation to record amortization of intangibles. The copyrights have an estimated useful life of 4 years with a residual value of $2,450.
Cullumber Company has these comparative balance sheet data: CULLUMBER COMPANYBalance SheetsDecember 31 2022 2021 Cash $ 16,350 $ 32,700 Accounts receivable (net) 76,300 65,400 Inventory 65,400 54,500 Plant assets (net) 218,000 196,200 $376,050 $348,800 Accounts payable $ 54,500 $ 65,400 Mortgage payable (15%) 109,000 109,000 Common stock, $10 par 152,600 130,800 Retained earnings 59,950 43,600 $376,050 $348,800 Additional information for 2022: 1. Net income was $34,000. 2. Sales on account were $383,300. Sales returns and allowances amounted to $26,600. 3. Cost of goods sold was $200,600. 4. Net cash provided by operating activities was $59,000. 5. Capital expenditures were $26,400, and cash dividends were $16,500. (d) Inventory turnover. enter inventory turnover in times rounded to 2 decimal places times (e)…
Cullumber Company has these comparative balance sheet data: CULLUMBER COMPANYBalance SheetsDecember 31 2022 2021 Cash $ 16,350 $ 32,700 Accounts receivable (net) 76,300 65,400 Inventory 65,400 54,500 Plant assets (net) 218,000 196,200 $376,050 $348,800 Accounts payable $ 54,500 $ 65,400 Mortgage payable (15%) 109,000 109,000 Common stock, $10 par 152,600 130,800 Retained earnings 59,950 43,600 $376,050 $348,800 Additional information for 2022: 1. Net income was $34,000. 2. Sales on account were $383,300. Sales returns and allowances amounted to $26,600. 3. Cost of goods sold was $200,600. 4. Net cash provided by operating activities was $59,000. 5. Capital expenditures were $26,400, and cash dividends were $16,500. Compute the following ratios at December 31, 2022. (Round current ratio and inventory turnover to 2 decimal…
P Company acquired the assets and assumed the liabilities of S Company on January 1, 2013, for $505,370 when S Company’s balance sheet was as follows: S COMPANYBalance SheetJanuary 1, 2013 Cash $94,842 Receivables 55,029 Inventory 111,504 Land 169,221 Plant and equipment (net) 474,560 Total $905,156 Accounts payable $44,244 Bonds payable, 9%, due 12/31/2018, Par 482,000 Common stock, $2 par value 122,000 Retained earnings 256,912 Total $905,156 Fair values of S Company’s assets and liabilities were equal to their book values except for the following: 1. Inventory has a fair value of $124,958. 2. Land has a fair value of $200,847. 3. The bonds pay interest semiannually on June 30 and December 31. The current yield rate on bonds of similar risk is 6%. Prepare the journal entry on P Company’s books to record the acquisition of the assets and assumption of the liabilities of S Company. (Round present value factor…
On July 1, 2020, Concord Corporation purchased Young Company by paying $258,200 cash and issuing a $141,000 note payable to Steve Young. At July 1, 2020, the balance sheet of Young Company was as follows. Cash Accounts receivable Inventory Land Buildings (net) Equipment (net) Trademarks $50,600 91,800 109,000 41,700 75,600 70,900 12,000 $451,600 Accounts payable Stockholders' equity $207,000 244,600 $451,600 The recorded amounts all approximate current values except for land (fair value of $60,500), inventory (fair value of $126,400), and trademarks (fair value of $17,360).
ABC Company, as of December 31, 2021 provided the following balances: Cash, net of a P7,000 overdraft 80,000 Receivable, net of customer credit balances totaling P6,000 30,000 Inventory (P20,000 of which are held on consignment 60,000 Prepayments 10,000 Property, plant and equipment, net of accumulated depreciation of P15,000 90,000 Accounts payable net of debit balances in suppliers' accounts of P3,000 45,000 Notes payable – bank, due on July 2022 25,000 Income tax payable 15,000 17. Total current assets reported in the December 31, 2021 balance sheet is a. 176,000 b. 156,000 c. 173,000 d. 170,000
On 1/1/2021 Shack Co. purchased Mansion Co. for $5,000,000. The following is the balance sheet of Mansion Co on 1/1/2021: Cash $800,000 Receivables $960,000 Inventories $818,000 PPE, net $1,000,000 Total Assets $3,578,000 Accounts Payable $600,000 Notes Payable $500,000 Capital Stock $1,000,000 Retained Earnings $1478,000 Total Liabilities and OE $3,578,000 The fair market values of Mansion Co.’s assets and liabilities resemble their book values at the time of acquisition, with the following exceptions: the book value of Mansion’s inventories was overvalued by $18,000, and the book value of Mansion’s PPE was undervalued by $100,000. Further, the fair market value of Mansion Co.’s trade name, which was internally developed, was $900,000. ______________________________ The journal entry Shack Co. will record when it purchases Mansion Co. will contain a.... Question 11 options:…
On July 1, 2018, Brigham Corporation purchased Young Company by paying Tk.1,50,000 cash and issuing a Tk.1,00,000 note payable to Mr. Young. At July 1, 2018,the balance sheet of the company was as follows:Cash Tk.50,000 Accounts payable Tk.2,00,000Accounts Receivable Tk.90,000 Stockholders’ equity Tk.2,35,000Inventory Tk.1,00,000 Tk.4,35,000Land Tk.40,000Building Tk.75,000Equipment Tk.70,000Trademark Tk.10,000Tk.4,35,000The recorded amounts all approximate current values except for land (fair value Tk.60,000),Inventory (fair value Tk.1,25,000) and trademark (fair value Tk.15,000),Requirements:i) Prepare the July 1 entry for Brigham Corporation to record the purchase.ii) Prepare the December 31, entry for Brigham Corporation to record amortization ofintangible assets. The trademark has an estimated useful life of 5 years with a residualvalue of Tk. 5000.
Pax Limited showed the following assets and liabilities in its financial statements at 31 December 2018. DETAILS CARRYING AMOUNT FAIR VALUE PPE 10,000,000 14,000,000 Inventory 4,200,000 4,400,000 Long Term Loans (3,500,000) (3,500,000) Account Payable (2,500,000) (2,500,000) 8,200,000 12,400,000 The current market rate for similar transactions is 8.5% per annum. Chelsea Limited planned to acquire all the assets and liabilities of Pax Limited on 1 July 2018 and agreed to pay R13,400,000 in cash on 1 July 2019 in full settlement of the acquisition. Required: Calculate the purchase consideration. Calculate the goodwill or bargain purchase for this transaction. Prepare the journal entries required in the books of Chelsea Limited relating to this transaction.
Carmela Company, as of December 31, 2021 provided the following balances: Cash, net of a P7,000 overdraft 80,000 Receivable, net of customer credit balances totaling P6,000 30,000 Inventory (P20,000 of which are held on consignment) 60,000 Prepayments 10,000 Property, plant and equipment, net of accumulated depreciation of P15,000 90,000 Accounts payable net of debit balances in suppliers' accounts of P3,000 45,000 Notes payable - bank, due on July 2022 25,000 Income tax payable 15,000 Total current assets reported in the December 31, 2021 balance sheet is