. 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.
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- 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.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, 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…
- 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, 2018.1-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?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 year
- Machine P was acquired on April 1, 2019 in exchange for 400, 000 face amount of bonds payable selling at 94, and maturing on April 1,2029 . The accountant recorded acquisition by a debit to Machinery and a credit to Bonds Payable for 400, 000 Straight line Depreciation was recorded based on a 5-year economic life and amounted to 54,000 for nine months In the computation of depreciation , residual value of 40,000 was used. What is the initial carrying amount of the PPE? What is the carrying amount if the PPE as of December 31, 2020?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 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. In Barber's accounting records, what amount would appear on December 31, 2020 for equity in subsidiary earnings?
- Use the following information below to answer questions 1 and 2. On January 2, 2024, Rainbow, Inc. purchased 18% of Skittles Corporation's common sto for $120,000. At the time of the investment, the book value and fair value of Skittles' net assets were equal except for a tract of land which had appreciated by $75,000. The following additional information was obtained from the financial statements for Skittles: Net income-year ended December 31, 2024 Net income-year ended December 31, 2025 Dividends paid to common shareholders in 2024 Dividends paid to common shareholders in 2025 $30,000 $70,000 $ 0 $60,000 On December 31, 2024, the fair value of Rainbow's investment in the common stock of Skiles was $115,000, and on December 31, 2025, its fair value was $140,000. 1. Assume Rainbow does not have significant influence over Skittles. How much would Rainbow report in its 2025 income statement related to this investment? A. $60,000 B. $35,800 C. $30,800 D. $12,600 E. $1,800 2. Assume…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…McCoy has the following account balances as of December 31, 2020 before an acquisition transaction takes place. Inventory $125,000 Land 450,000 Buildings 575,000 Liabilities (590,000) Common stock ($10 par) (75,000) APIC (200,000) Retained earnings (12/31/20) (285,000) The fair value of McCoy’s Land and Buildings are $650,000 and $600,000, respectively. On December 31, 2020, Ferguson Company issues 30,000 shares of its $10 par value ($30 fair value) common stock in exchange for all of the shares of McCoy’s common stock. Ferguson paid $12,000 for costs to issue the new shares of stock. Before the acquisition, Ferguson has $800,000 in its common stock account and $350,000 in its additional paid-in capital account. What will the consolidated common stock account be as a result of this acquisition?