Adora Inc. acquired one hundred percent of Alvah Co. on January 1, 2018, at a price in excess of the subsidiary's fair value. On that date, Adora's equipment (ten-year life) had a book value of $360,000 but a fair value of $480,000. Alvah had equipment (ten-year life) with a book value of $240,000 and a fair value of $350,000. Adora used the partial equity method to record its investment in Alvah. On December 31, 2020, Adora had equipment with a book value of $250,000 and a fair value of $400,000. Alvah had equipment with a book value of $170,000 and a fair value of $320,000. What is the consolidated balance for the Equipment account as of December 31, 2020? А. $387,000. В. $497,000. С. $508.000. D. $537,000. Е.

Adora Inc. acquired one hundred percent of Alvah Co. on January 1, 2018, at a price in excess of the subsidiary's fair value. On that date, Adora's equipment (ten-year life) had a book value of $360,000 but a fair value of $480,000. Alvah had equipment (ten-year life) with a book value of $240,000 and a fair value of $350,000. Adora used the partial equity method to record its investment in Alvah. On December 31, 2020, Adora had equipment with a book value of $250,000 and a fair value of $400,000. Alvah had equipment with a book value of $170,000 and a fair value of $320,000. What is the consolidated balance for the Equipment account as of December 31, 2020? А. $387,000. В. $497,000. С. $508.000. D. $537,000. Е.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Denger
On January 1, 2024, Brooks Corporation exchanged $1,194,000 fair-value consideration for all of the outstanding voting stock of Chandler, Incorporated. At the acquisition date, Chandler had a book value equal to $1,150,000. Chandler’s individual assets and liabilities had fair values equal to their respective book values except for the patented technology account, which was undervalued by $216,000 with an estimated remaining life of six years. The Chandler acquisition was Brooks’s only business combination for the year. In case expected synergies did not materialize, Brooks Corporation wished to prepare for a potential future spin-off of Chandler, Incorporated. Therefore, Brooks had Chandler maintain its separate incorporation and independent accounting information system as elements of continuing value. On December 31, 2024, each company submitted the following financial statements for consolidation. Dividends were declared and paid in the same period. Accounts Brooks Corporation…
Pit Coporation owns 75% of Stop Company's outstanding common stock. On 01/01/21, Pit sold sold a used piece of equipment to Stop in exchange for $236,000 cash. Pit's original cost of the equipment was $728,000 and accumulated depreciaiton of 01/01/21 was $447,000. The remaining useful life of the equipment is 10 years, and Stop will use that same usefull life. Both companies use the straight line method of depreciation. Pit's Journal Entries would include:
P Corp acquired 90% of the outstanding ordinary share of B Company. On March 31, 2030, P sold equipment to B Company costing P150,000, with accumulated depreciation of P30,000 for P100,000. The remaining useful life of the equipment is four years. On September 30, 2030, B sold machinery with carrying amount of P200,000 for P240,000. The remaining useful life of the machine is five years. On December 31, 2030, P and B reported net income from their own operation amounting to P1,000,000 and P600,000, respectively. B also paid dividend of P200,000. Requirements: 1. non-controlling interest in net income for 2030? 2. consolidated net income attributable to parent for 2030?
Pie Corporation acquired 75 percent of Slice Company's ownership on January 1, 20X8, for $93,000. At that date, the fair value of the noncontrolling interest was $31,000. The book value of Slice's net assets at acquisition was $90,000. The book values and fair values of Slice's assets and liabilities were equal, except for Slice's buildings and equipment, which were worth $18,000 more than book value. Accumulated depreciation on the buildings and equipment was $27,000 on the acquisition date. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, the management of Pie concluded at December 31, 20X8, that goodwill from its purchase of Slice shares had been impaired and the correct carrying amount was $2,900. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders. Trial balance data for Pie and Slice on December 31, 20X8, are as follows: Item Cash Accounts Receivable Inventory Land…
On March 1, 2010, JJ Corporation acquired for P 5,600,000 all of the assets of ZZ Company. On this date, the carrying value of ZZ’s identifiable assets was P4, 600,000. The current value of ZZ’s inventory was P800, 000 less than its carrying value, and the current fair value of ZZ’s plant assets was P1, 600,000 larger than its carrying amount. The current fair values of other identifiable net assets of ZZ were equal to their carrying values. The journal entry prepared by JJ to record the business combination includes a a. Debit of P 200,000 to goodwill. b. Debit of P 800,000 to inventories c. Debit of P 1,400,000 to goodwill d. Credit of P 1,600,000 to plant assets
Dengar
Pit Coporation owns 75% of Stop Company's outstanding common stock. On 01/01/21, Pit sold sold a used piece of equipment to Stop in exchange for $236,000 cash. Pit's original cost of the equipment was $728,000 and accumulated depreciaiton of 01/01/21 was $447,000. The remaining useful life of the equipment is 10 years, and Stop will use that same usefull life. Both companies use the straight line method of depreciation. The Consolidation Entry would include:
Fried Inc. purchased 90% ownership of Chicken Corp. in 2020, at underlying book value. On that date, the fair value of non-controlling interest was equal to 10% of the book value of Chicken Corp. Fried Inc. purchased inventory from Chicken Corp. for P270,000 on September 1, 2021, and resold the 70% of the inventory to unrelated parties on December 5, 2021 for P300,000. Chicken Corp. produced the inventory sold to Fried Inc. for 201,000. The entities had no other transactions during 2021. What amount of consolidated net income will be assigned to Fried Inc. in 2021?* a. P 111,000 b. P 60,300 c. P 154,470 d. P 159,300 Thank you for answering!
On January 1, 2017, Harrison, Inc., acquired 90 percent of Starr Company in exchange for$1,125,000 fair-value consideration. The total fair value of Starr Company was assessed at $1,200,000. Harrison computed annual excess fair-value amortization of $8,000 based on the difference between Starr’s total fair value and its underlying book value. The subsidiary reported net income of $70,000 in 2017 and $90,000 in 2018 with dividend declarations of $30,000 each year. Apart from its investment in Starr, Harrison had net income of $220,000 in 2017 and $260,000 in 2018. What is the balance of the non controlling interest in Starr at December 31, 2018?
House Corporation has been operating profitably since its creation in 1960. At the beginning of 2016, House acquired a 70 percent ownership in Wilson Company. At the acquisition date, House prepared the following fair-value allocation schedule: Consideration transferred for 70% interest in Wilson $ 707,000 Fair value of the 30% noncontrolling interest 303,000 Wilson business fair value $ 1,010,000 Wilson book value 790,000 Excess fair value over book value $ 220,000 Assignments to adjust Wilson’s assets to fair value: To buildings (20-year remaining life) $ 60,000 To equipment (4-year remaining life) (20,000 ) To franchises (10-year remaining life) 40,000 80,000 To goodwill (indefinite life) $ 140,000 House regularly buys inventory from Wilson at a markup of 25 percent more than cost. House's purchases during 2016 and 2017 and related ending inventory…
On January 1, 2022, Aspen Company acquired 80 percent of Birch Company's voting stock for $452,000. Birch reported a $505,000 book value, and the fair value of the noncontrolling interest was $113,000 on that date. Then, on January 1, 2023, Birch acquired 80 percent of Cedar Company for $112,000 when Cedar had a $104,000 book value and the 20 percent noncontrolling interest was valued at $28,000. In each acquisition, the subsidiary's excess acquisition-date fair over book value was assigned to a trade name with a 30-year remaining life. These companies report the following financial information. Investment income figures are not included. Items Sales: Aspen Company Birch Company Cedar Company Expenses: Aspen Company 2022 $ 517,500 294,500 Not available 2023 2024 $ 715,000 368,000 247,100 $ 935,000 594,600 223,400 $ 557,500 510,000 181,000 $ 55,000 18,000 6,000 Birch Company Cedar Company Dividends declared: $ 477,500 241,000 Not available $ 495,000 305,000 236,000 Aspen Company Birch…