On January 1, 2022, Monica Company acquired 70 percent of Young Company's outstanding common stock for $658,000. The fair value of the noncontrolling interest at the acquisition date was $282,000. Young reported stockholders' equity accounts on that date as follows: Common stock-$10 par value Additional paid-in capital Retained earnings $ 300,000 40,000 460,000
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- On January 1, 2022, Monica Company acquired 70 percent of Young Company's outstanding common stock for $714,000. The fair value of the noncontrolling interest at the acquisition date was $306,000. Young reported stockholders' equity accounts on that date as follows: Common stock-$10 par value Additional paid-in capital Retained earnings In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a five-year remaining life) by $60,000. Any remaining excess acquisition-date fair value was allocated to a franchise agreement to be amortized over 10 years. During the subsequent years, Young sold Monica inventory at a 20 percent gross profit rate. Monica consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the three years after this business combination was created amounted to the following: Year 2022 2023 2024 $ 300,000 50,000 540,000 Transfer…On January 1, 2019, Monica Company acquired 80 percent of Young Company's outstanding common stock for $744,000. The fair value of the noncontrolling interest at the acquisition date was $186,000. Young reported stockholders' equity accounts on that date as follows: Common stock-$10 par value Additional paid-in capital Retained earnings In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a five-year remaining life) by $90,000. Any remaining excess acquisition-date fair value was allocated to a franchise agreement to be amortized over 10 years. $ 300,000 50,000 450,000 During the subsequent years, Young sold Monica inventory at a 20 percent gross profit rate. Monica consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the three years after this business combination was created amounted to the following: Year 2019 2020 2021 Transfer…On January 1, 2019, Monica Company acquired 80 percent of Young Company’s outstanding common stock for $872,000. The fair value of the noncontrolling interest at the acquisition date was $218,000. Young reported stockholders’ equity accounts on that date as follows: Common stock—$10 par value $ 100,000 Additional paid-in capital 50,000 Retained earnings 610,000 In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a five-year remaining life) by $70,000. Any remaining excess acquisition-date fair value was allocated to a franchise agreement to be amortized over 10 years. During the subsequent years, Young sold Monica inventory at a 30 percent gross profit rate. Monica consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the three years after this business combination was created amounted to the…
- On January 1, 2022, Monica Company acquired 70 percent of Young Company's outstanding common stock for $714,000. The fair value of the noncontrolling interest at the acquisition date was $ 306,000. Young reported stockholders' equity accounts on that date as follows: Common stock-$10 par value $ 300,000 Additional paid-in capital 50,000 Retained earnings 540,000 In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a five-year remaining life) by $60,000. Any remaining excess acquisition-date fair value was allocated to a franchise agreement to be amortized over 10 years. During the subsequent years, Young sold Monica inventory at a 20 percent gross profit rate. Monica consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the three years after this business combination was created amounted to the following: Year Transfer Price…On January 1, 2019, Monica Company acquired 70 percent of Young Company’s outstanding common stock for $644,000. The fair value of the noncontrolling interest at the acquisition date was $276,000. Young reported stockholders’ equity accounts on that date as follows: Common stock—$10 par value $ 200,000 Additional paid-in capital 60,000 Retained earnings 440,000 In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a five-year remaining life) by $80,000. Any remaining excess acquisition-date fair value was allocated to a franchise agreement to be amortized over 10 years. During the subsequent years, Young sold Monica inventory at a 40 percent gross profit rate. Monica consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the three years after this business combination was created amounted to the…On January 1, 2019, Monica Company acquired 70 percent of Young Company’s outstanding common stock for $756,000. The fair value of the noncontrolling interest at the acquisition date was $324,000. Young reported stockholders’ equity accounts on that date as follows: Common stock—$10 par value $ 300,000 Additional paid-in capital 40,000 Retained earnings 600,000 In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a five-year remaining life) by $60,000. Any remaining excess acquisition-date fair value was allocated to a franchise agreement to be amortized over 10 years. During the subsequent years, Young sold Monica inventory at a 20 percent gross profit rate. Monica consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the three years after this business combination was created amounted to…
- On January 1, 2019, Monica Company acquired 70 percent of Young Company’s outstanding common stock for $756,000. The fair value of the noncontrolling interest at the acquisition date was $324,000. Young reported stockholders’ equity accounts on that date as follows: Common stock—$10 par value $ 300,000 Additional paid-in capital 40,000 Retained earnings 600,000 In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a five-year remaining life) by $60,000. Any remaining excess acquisition-date fair value was allocated to a franchise agreement to be amortized over 10 years. During the subsequent years, Young sold Monica inventory at a 20 percent gross profit rate. Monica consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the three years after this business combination was created amounted to…On January 1, 2019, Monica Company acquired 70 percent of Young Company’s outstanding common stock for $798,000. The fair value of the noncontrolling interest at the acquisition date was $342,000. Young reported stockholders’ equity accounts on that date as follows: Common stock—$10 par value $ 200,000 Additional paid-in capital 100,000 Retained earnings 660,000 In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a five-year remaining life) by $60,000. Any remaining excess acquisition-date fair value was allocated to a franchise agreement to be amortized over 10 years. During the subsequent years, Young sold Monica inventory at a 20 percent gross profit rate. Monica consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the three years after this business combination was created amounted to the…On January 1, 2023, Andrei Company acquired 40% of the ordinary shares of an associate. On such date, assets and liabilities of the investee were recorded at fair value and the acquisition showed that goodwill of P1,000,000 was acquired. The investee reported net income of P8,000,000 for 2023. In December 2023, the investee sold inventory costing P3,000,000 to Andrei Company for P5,000,000. The inventory remained unsold by Andrei Company on December 31, 2023. On January 1, 2023, the investee sold an equipment to Andrei Company with carrying amount of P2,500,000 for P4,000,000. The remaining life of the equipment is 5 years. What amount of investment income should be reported by Andrei Company for 2023?
- On 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? [Debit or credit by what amount] Bonds Payable? [Debit or credit by what amount] Cash? [Debit or credit by what amount] Investment in Subsidiary? [Debit or credit by what amount] Goodwill? [Debit or credit by what amount] Gain on Acquisition of Business? [Debit or credit by what amount]On January 1, 2016, Monica Company acquired 70 percent of Young Company’s outstanding common stock for $665,000. The fair value of the noncontrolling interest at the acquisition date was $285,000. Young reported stockholders’ equity accounts on that date as follows: Common stock—$10 par value $ 300,000 Additional paid-in capital 90,000 Retained earnings 410,000 In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a five-year remaining life) by $50,000. Any remaining excess acquisition-date fair value was allocated to a franchise agreement to be amortized over 10 years. During the subsequent years, Young sold Monica inventory at a 30 percent gross profit rate. Monica consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the three years after this business combination was created amounted to…On January 1, 2020, Jumper Co. acquired all of the common stock of Cable Corp. for $540,000. Annual amortization associated with the acquisition amounted to $1,800. During 2020, Cable recognized net income of $54,000 and paid dividends of $24,000. Cable's net income and dividends for 2021 were $86,000 and $24,000, respectively. Required: Assuming that Jumper decided to use the partial equity method, prepare a schedule to show the balance in the investment account at the end of 2021.