Company Pacquired 80% of the outstanding common stock of the Company S by issuing common stock with a market value of $550,000. The balance sheet of Company S was as follows on the acquisition date: Assets Cash Inventory Land Building (net) Total $600,000 $500,000 $50,000 $ 50,000 $0 120,000 100,000 350,000 $620,000 Liabilities and Equity Liabilities Common stock, $10 par Other paid-in capital Retained earnings Total $120,000 100,000 The market values were as follows: Inventory, $130,000; Land, $120,000; Building, $400,000. What is the amount that will appear as Cash Provided (Used) by Investing Activities on the consolidated statement of cash flows, as a result of this purchase? 150,000 250,000 $620,000
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- Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2. Balance sheet datafor the two companies immediately following acquisition follow 4. What amount of investment in Silk will be reported?A. P 0 C. P 150,500B. P 140,000 D. P 215,0005. What amount of liabilities will be reported?A. P265,000 C. P 622,000B. P 436,500 D. P 701,5006. What amount will be reported as non-controlling interest?A. P 42,000 C. P 60,900B. P 52,500 D. P 64,500GREY Corp's statement of financial position prior to the acquisition is shown as follows: ASSETS LIABILITIES AND EQUITY Cash 170,000 Liabilities 400,000 80,000 Accounts Receivable 50,000 Ordinary Share, P4 Inventories 100,000 Share Premium 320,000 Property, Plant and Equipment 880,000 Retained Earnings 400,000 TORRES Company will issue shares of P10 par value ordinary shares capital for all the assets and liabilities of GREY Company. As of acquisition date, TORRES Company's ordinary share capital has a current market value of P40 per share. The fair value of he current assets is P400,000 while that of the plant assets is P1,600,000. All the liabilities are correctly stated. TORRES Company issued sufficient share capital so that the fair value of the shares issued is equal to the fair market value of GREY Company's assets. To have goodwill of P200,000 the number of shares to be issued by TORRES Company should beCompany P acquired 80% of the outstanding common stock of the Company S by isuing common stock with a market value of $550,000 The balance sheet of Company S was as follow on the acquisition date: Assets Liabilities and Equity Cash $ 50,000 Liabilities $120,000 Inventory 120,000 Common stock, $10 par 100,000 Other paid-in capital 150,000 250,000 Land 100,000 Building (net) 350,000 Retained earnings Total $620,000 Total $620,000 The market values were as follows. Inventory, $130,000; Land, $120,000, Building, $400,000. What is the amount that will appear as Cash Provided (Used) by Investing Activities on the consolidated statement of cash flows, as a result of this purchase? O $600,000 O $500,000 O $50,000 O SO
- Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2. Balance sheet datafor the two companies immediately following acquisition follow: 1. What amount of inventory will be reported?A. P 179,000 C. P 210,500B. P 200,000 D. P 215,0002. What amount of goodwill will be reportedA. P 0 C. P 40,000B. P 28,000 D. P 52,0003. What amount of total assets will be reported?A. P 1,081,000 C. P 1,196,500B. P 1,121,000 D. P 1,231,50On 1 July 2021, Xero Ltd acquired 90% of the issued shares of Accounting Ltd for $750,000 when the equity of Accounting Ltd consisted of: Share Capital $400,000 Retained Earnings $150,000 Asset Revaluation reserve $50,000 At the acquisition date all the identifiable assets and liabilities of Accounting Ltd were recorded at fair value except for the following assets: Carrying Amount Fair Value Equipment (Cost $100,000) $160,000 $200,000 Land $560,000 $700,000 The NCI at acquisition date is measured based on the proportionate share of the identifiable assets and liabilities in Accounting Ltd. The tax rate is 30%. Required Prepare Acquisition analysis as of 1 July 2021Problem Company owns 90 percent of Solution Dairy's stock. The balance sheets of the two companies immediately after the Solution acquisition showed the following amounts: Assets Cash & Receivables. Inventory Land Buildings & Equipment (net) Investment in Solution Dairy Total Assets Liabilities & Stockholders' Equity Current Payables Long-Term Liabilities Common Stock Retained Earnings Total Liabilities & Stockholders' Equity Problem Company $ 132,000 211,000 74,000 409,000 259,200 $ 1,085,200 Solution Dairy $ 88,000 108,000 54,000 228,000 $ 478,000 $ 77,000 254,200 382,000 372,000 $ 30,000 180,000 66,000 202,000 $ 1,085,200 $ 478,000 The fair value of the noncontrolling interest at the date of acquisition was determined to be $28,800. The full amount of the increase over book value is assigned to land held by Solution. At the date of acquisition, Solution owed Problem $9,000 plus $1,100 accrued interest. Solution had recorded the accrued interest, but Problem had not Required: Prepare…
- On 1 July 2020 P Ltd purchased 100% of the issued capital of S Ltd for a purchase price of $859,000. At that date the shareholders’ equity of S Ltd disclosed: Share capital $121,000 General reserve $50,000 Retained earnings $260,000 Additional information: At the date of acquisition, all net identifiable assets of Sub Ltd were recorded at fair value Sales by S to P Ltd were $67,000. P Ltd sold inventory of $109,000 to S Ltd on 1 July 2021. The original cost of this inventory to P Ltd was $53,000. S Ltd has 47% of this inventory on hand at 30 June 2022 Company tax rate is 30% Requirements: Provide all consolidation journal entries (including workings) in next part of this question Compute the amount of 'realised profit' of the inventory transaction above in the form of 'cost of goods sold' and enter the amount in the answer space belowOn 1/1/2020, ABC Corporation balance sheet included the following accounts: Patents $100,000, Bonds Payable $40,000. Common Stock $10,000, Retained Earnings $50,000. Book values of assets and liabilities were equal to their fair values. XYZ Corporation acquired 100% of the common stock of ABC Corporation on 1/1/2020 for $120.000 Cash. Which of the following entries was prepared to record the acquisition on XYZ's books? Patents Bonds Payable Cash Investment in Subsidiary Goodwill Gain on Acquisition of Business Debit $100,000 Credit $40,000 Credit $120,000 Debit $60.000On January 1, 2025, P Corporation acquired 100 percent of the voting stock of S Corporation in exchange for $2,347,500 in cash and securities. On the acquisition date, S had the following balance sheet: Cash $ 24,800 Accounts payable $ 1,891,800 Accounts receivable 102,000 Inventory 223,000 Equipment (net) 2,310,000 Common stock 800,000 Trademarks 920,000 Retained earnings 888,000 Total assets $ 3,579,800 Total liabilities and equity $ 3,579,800 At the acquisition date, the book values of S's assets and liabilities were generally equivalent to their fair values except for the following assets: Asset Book Value Fair Value RemainingUseful Life Equipment $ 2,310,000 $ 2,483,000 8 years Customer lists 0 234,000 4 years Trademarks 920,000 1,009,500 indefinite During the next two years, S has the following income and dividends in its own separately prepared financial reports to its parent. Net Income…
- Blank Corporation acquired 100 percent of Faith Corporation’s common stock on December 31, 20X2, for $207,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Blank Corporation Faith Corporation Assets Cash $ 66,000 $ 36,000 Accounts Receivable 85,000 39,000 Inventory 107,000 65,000 Buildings and Equipment (net) 224,000 151,000 Investment in Faith Corporation Stock 207,000 Total Assets $ 689,000 $ 291,000 Liabilities and Stockholders’ Equity Accounts Payable $ 82,000 $ 23,000 Notes Payable 142,000 61,000 Common Stock 99,000 43,000 Retained Earnings 366,000 164,000 Total Liabilities and Stockholders’ Equity $ 689,000 $ 291,000 At the date of the business combination, the book values of Faith’s net assets and liabilities approximated fair value. Assume that Faith Corporation’s accumulated depreciation on buildings and equipment on the acquisition date was $16,000. Required:…On 1 July 2021, Safe Ltd acquired 100% of the shares of Mission Ltd for $500,000. On 1 July 2021, the equity of Mission Ltd consisted of: Share capital $300,000 General reserve $60,000 Retained earnings $75,000 All the identifiable assets and liabilities of Mission Ltd were recorded at fair value on 1 July 2021 except for: Carrying amount Fair value Inventories $ 90,000 $100,000 Plant (cost $300,000) $180,000 $200,000 The above plant has a further 5-year life with nil residual value and is expected to be used evenly over that time. During the year ended 30 June 2022, all inventories on hand at 1 July 2021 are sold. Corporate tax rate is 30%. The following intragroup transactions take place after the acquisition: a) On 1 May 2022, Mission Ltd sells inventory costing $50,000 to Safe Ltd for $80,000. On 30 June 2022, only 70% of these goods have been sold by Safe Ltd. b) On 1 March 2023, Mission Ltd sells inventory to Safe Ltd costing $120,000 for $160,000. At 30 June 2023, 20% of this…On August 31, 2020, Southampton Co. acquired all of the common stock of Brighton Company, which became a division of Southampton Co. Brighton Company reported the followir statement of financial position at the time of the acquisition: Brighton Company Statement of Financial Position Assets Equity and Liabilities Share capital- Plant assets (ne t) $1,350,000 $1,150,000 ordinary 235,000 Retained earnings Inventory Receivables 1,070,000 587.000 800,000 Accounts payable Cash 422.000 Total assets $2.807.000 Total equity and liabilities $2.807.000 An appraisal indicated that the fair value of the inventory was $372,000 and the fair value of the plant assets was $1,550,000. The agreed purchase price was $3,600,000, and this amount was paid in cash to the previous owners of Brighton Company. Required: a. Prepare the entry to record the purchase of Brighton Company. b. Assume that the carrying amount of Brighton Company division's net assets, including goodwill is $2.550,000. The recoverable…