Do not give answer in image On March 31, Jumbo purchases 100% ofLarz for $7,500,000 cash and 2,200,000shares of Jumbo voting common stock(par value of $1). Jumbo's stock had a fairvalue on March 31 of $40. Jumbo got12,000,000 shares of Larz's votingcommon stock (par value $4) having a fairvalue of $50 per share. Jumbo incurs$5,000,000 in direct combination costsand $3,500,000 in stock issuance costs.Using the purchase method, what isJumbo's COST for this acquisition?

Cost of acquisition means total costs spent on acquisition of stock or properties in the business.…

Answered: On March 31, Jumbo purchases 100% of…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter13: Corporations: Earning & Profits And Distributions

Section: Chapter Questions

Problem 31P

See similar textbooks

Similar questions

G. Regine, Inc. owns 500 ordinary shares of Velasquez Company which has several hundred thousand shares publicly traded. These 500 shares were purchased by Regine in early part of 2021 for P200 per share. On August 20, 2021, Velasquez distributed 500 rights to Regine. Regine was entitled to buy one new share of Velasquez ordinary shares at P180 and two share rights. On September 1, 2021, when the market value of Velasquez ordinary share was P203, Regine exercised all the rights and received 250 ordinary shares. - How much is the investment income recognized by Regine Inc. upon exercise of the rights? A. P11,500 B. P5,750 C. P750 D. P0
Pete Inc. purchased 80% of Paul Co. for $270,000 when Paul's book value was $300,000. Paul has 50,000 shares outstanding and currently has a book value of $400,000. Assume Paul issues 30,000 additional shares of common stock solely to Pete Inc. for $12 per share. What is the adjusted book value of Paul Co. after the issuance of the shares? $608,000. O $720,000. $680,000. $760,000. $400,000
Jeeper purchased 400 shares of the GST Company common stock at P4,890.00 per share. A few months later, he sold the shares at P3,500.00, His stockbroker charges 4.3% commission on round lots and 4.6% on odd lots. Compute a. total cost, n. the proceeds, and c. the gain or loss on the transactions.
Novak Limited owns a 26% interest in the shares of Marigold Corporation. During the year, Marigold pays $10600 in dividends to Novak and reports $104000 net income. Novak's investment in Marigold will increase Novak's net income by $10600. $27040. $2756. $29796. Please give correct option or incorrect all sub part
Ayayai Corporation purchased 300 common shares of Sigma Inc. for trading purposes for $9,300 on September 8 and accounted for the investment under ASPE at FV-NI. In December, Sigma declared and paid a cash dividend of $1.65 per share. At year end, December 31, Sigma shares were selling for $35.60 per share. In late January, Ayayai sold the Sigma shares for $34.60 per share. Prepare Ayayai Corporation’s journal entry to record the purchase of the investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit September 8 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount Prepare Ayayai Corporation’s journal entry to record the dividends received. (Credit…
DeMilo, Inc., owns 100 percent of the 40,000 outstanding shares of Ricardo, Inc. DeMilo currently carries the Investment in Ricardo account at $490,000 using the equity method.Ricardo issues 10,000 new shares to the public for $15.75 per share. How does this transaction affect the Investment in Ricardo account that appears on DeMilo’s financial records?
On May 1, 20x1, Damage, Inc. declared cash dividends of P20 per share to shareholders of record on May 15, 20x1, for distribution on May 31, 20x1. Hetfield Co. purchases 20,000 Damage, Inc. shares for P200 per share and classifies the shares as investment in FVOCI securities. Requirements: Provide all the entries in May 20x1 under each of the following scenarios: a. Hetfield purchased the shares on May 5, 20x1. b. Hetfield purchased the shares on May 21, 20x1.
Goodfellas obtained a 60% Bedfellow in the 100,000 $1 shares of Mist on 1 January 20X8, when the retained earnings of Mist were $850,000. Consideration comprised $250,000 cash, $400,000 payable on 1 January 20X9 and one share in Goodfellas for each two shares acquired. Goodfellas has a cost of capital of 8% and the market value of its shares on 1 January 20X8 was $2.30. Goodfellas measures non-controlling interest at fair value. The fair value of the non-controlling interest at 1 January 20X8 was estimated to be $400,000. What was the goodwill arising on acquisition Select one alternative: $169,000 $139,370 $119,370 $130,370
On Jan. 1, 2023 Apex Company purchases 30,000 shares of the common stock of Cary Industries for $2,000,000. Cary Industries has 100,000 shares of common stock issued and outstanding As a result of this investment Apex is given 3 of the 8 seats on Cary's board of directors. For 2023 Cary reports net income of $350,000. On June 1 and Sept. 1 Cary Industries pays a dividend of $0.25 per share to its shareholders. Required: At what amount should this investment be reported on Apex's balance sheet at Dec. 31, 2023?
2. M acquires H Company on 01/01/15. To obtain the net assets, M pays $200.000 in cash and issues 10.000 shares of its own $10 par value common stock. On this date, M's stock has a fair market value of $18 per share. The book values for both M and H as of 31/12/14, follow. The fair market value of each of H's accounts is also included. In addition H holds fully amortized patent that still retains a $30.000 value. H Company M Inc Fair Market Book Value Book Value Value Cash $ 300.000 $ 40.000 $ 40.000 Receivables 160.000 220.000 100.000 90.000 80.000 Inventory 130.000 130.000 Land 60.000 60.000 Buildings (net) Equipment (net) Accounts Payable Long-Term Liabilities 400.000 110.000 140.000 120.000 50.000 50.000 160.000 30.000 30.000 380.000 170.000 150.000 Common Stock 400.000 40.000 Retained Earnings 360.000 240.000 Required: Assume that this combination is a statutory merger so that H's accounts transferred to the records of M with H subsequently being dissolved corporation. Prepare the…
Earth Inc. purchased 13,500 of the common shares of Moon Inc. on January 1, Year 2 for $310,500. Moon had 90,000 common shares outstanding. During Year 2, Moon had income of $110,000 and paid dividends of $60,000. On December 31, Year 2 the selling price of Moon's shares was $25 per share. Earth purchased additional 9,000 shares of Moon's common shares on March 1, Year 3 for $216,000. During Year 3, Moon had income of $120,000 earned evenly over the year. On December 31, Moon declared dividends of $70,000. On December 31, Year 3 the selling price of Moon's shares was $21 per share. January 2, Year 4, Moon's shares price fell to $19.50 per share and the decline is considered permanent. Required: Prepare all the journal entries for Years 2, 3 and January 2, Year 4 related to Earth's investment in Moon. Write out ALL account names and show all calculations for full marks
Arcola, Inc., acquires all 40,000 shares of Tuscola Company for $725,000. A year later, when Arcola’s equity adjusted balance in its investment in Tuscola equals $800,000, Tuscola issues an additional 10,000 shares to outside investors for $25 per share. Which of the following best describes the effect of Tuscola’s stock issue on Arcola’s investment account?a. No effect because the shares were all sold to outside parties.b. The investment account is reduced because Arcola now owns a smaller percentage of Tuscola.c. The investment account is increased because Arcola’s share of Tuscola’s value has increased.d. No effect because Arcola maintains control over Tuscola despite the new stock issue.

SEE MORE QUESTIONS

Recommended textbooks for you

SWFT Essntl Tax Individ/Bus Entities 2020

Accounting

ISBN:

9780357391266

Author:

Nellen

Publisher:

Cengage

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

SWFT Comprehensive Volume 2019

Accounting

ISBN:

9780357233306

Author:

Maloney

Publisher:

Cengage

SWFT Essntl Tax Individ/Bus Entities 2020

Accounting

ISBN:

9780357391266

Author:

Nellen

Publisher:

Cengage

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

SWFT Comprehensive Volume 2019

Accounting

ISBN:

9780357233306

Author:

Maloney

Publisher:

Cengage

SWFT Comprehensive Vol 2020

Accounting

ISBN:

9780357391723

Author:

Maloney

Publisher:

Cengage

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS