Comprehensive Question Ch4: Par Corporation acquired a 70 percent interest in Sul Corporation's outstanding voting common stockon January 1, 2011, for $490,000 cash. The stockholders' equity (book value) of Sul on this date consisted of $500,000 capital stock and $100,000 retained earnings. The differences between the fair valueof Sul and the book value of Sul were assigned $5,000 to Sul's undervalued inventory, $14,000 to undervalued buildings, $21,000 to undervalued equipment, and $40,000 to previously unrecorded patents. Any remaining excess is goodwill. The undervalued inventory items were sold during 2011, and the undervalued buildings andequipment had remaining useful lives of seven years and three years, respectively. The patents have a 40- year life. Depreciation is straight line.At December 31, 2011, Sul's accounts payable include $10,000 owed to Par. This $10,000account payable is due on January 15, 2012. Separate financial statements for Par and Sul at 31 Dec-

Comprehensive Question Ch4: Par Corporation acquired a 70 percent interest in Sul Corporation's outstanding voting common stockon January 1, 2011, for $490,000 cash. The stockholders' equity (book value) of Sul on this date consisted of $500,000 capital stock and $100,000 retained earnings. The differences between the fair valueof Sul and the book value of Sul were assigned $5,000 to Sul's undervalued inventory, $14,000 to undervalued buildings, $21,000 to undervalued equipment, and $40,000 to previously unrecorded patents. Any remaining excess is goodwill. The undervalued inventory items were sold during 2011, and the undervalued buildings andequipment had remaining useful lives of seven years and three years, respectively. The patents have a 40- year life. Depreciation is straight line.At December 31, 2011, Sul's accounts payable include $10,000 owed to Par. This $10,000account payable is due on January 15, 2012. Separate financial statements for Par and Sul at 31 Dec-

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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POPCORN Corporation acquired a 90% interest in the outstanding stock of SALT Corporation for $540,000 on 1/1/X1. At this time, the stockholders’ equity of SALT consisted of $400,000 of capital stock and $50,000 of retained earnings. The following table represents only those assets and liabilities of Salt which had book values different than their fair values at the date of acquisition: Book Value Fair Value Inventory $ 20,000 $ 15,000 Sold X1 Land 30,000 40,000 Still owned Buildings 10,000 50,000 Remaining life 8 years Notes Payable (50,000) (40,000) Matures on 12/31/X5 Comparative Balance Sheets for POPCORN and SALT AT 12/31/X3 are presented here: Popcorn Corporation & Subsidiary Consolidated Balance Sheet Workpaper For the Year Ended 12/31/X3 Assets: POPCORN SALT Debits Credits Consolidated Other Assets $355,000 $100,000 Inventory 100,000 50,000 Land…
Accounting On January 1, 2020, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Inc., for $1,017,000 in cash and stock options. At the acquisition date, NetSpeed had common stock of $1,070,000 and Retained Earnings of $53,500. The acquisition-date fair value of the 10 percent noncontrolling interest was $113,000. QuickPort attributed the $6,500 excess of NetSpeed's fair value over book value to a database with a five-year remaining life. During the next two years, NetSpeed reported the following: Dividends Net Income $ 9,100 13,000 Declared $ 1,300 1,300 2020 2021 On July 1, 2020, QuickPort sold communication equipment to NetSpeed for $9,500. The equipment originally cost $16,000 and had accumulated depreciation of $7,700 and an estimated remaining life of three years at the date of the intra-entity transfer. a. Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc., account as of December 31, 2021. b. Prepare the worksheet…
X co, purchased 100% of Y Common stock at 1/1/2020 for $ 300,000 ,on the same date the y co stock was $ 100,000 and retained earning $120,000 , at acquisition date the net assets of y co. book value was equal to fair value except ( inventory FV more than BV of $26,000) and (land its FV more than BV10,000 ) (Building its FV more than BV by $ 14,000 ) but ( equipment its FV less than B V by $10,000) if Y CO. reported $160,000 net income for 31/12/2020 and paid $ 60,000 dividends . Other information 1- the Y inventory 50% sold during 2020 2- the building useful life was 7 years , but equipment 5 years 3- there is no impairment for goodwill during 2020 if inventory balance in 31/12/2020 in parent co 60,000 & in subsidiary co 50,000 what is amount of inventory in consolidated balance sheet in 31/12/2020 Select one: a. 110,000 b. 123,000 c. 136,000 d. 97,000
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X co, purchased 100% of Y Common stock at 1/1/2020 for $ 300,000 ,on the same date the y co stock was $ 100,000 and retained earning $120,000 , at acquisition date the net assets of y co. book value was equal to fair value except ( inventory FV more than BV of $26,000) and (land its FV more than BV10,000 ) (Building its FV more than BV by $ 14,000 ) but ( equipment its FV less than B V by $10,000) if Y CO. reported $160,000 net income for 31/12/2020 and paid $ 60,000 dividends . Other information 1- the y inventory completely sold during 2020 2- the building useful life was 7 years , but equipment 5 years 3- there is no impairment for goodwill during 2020 if equipment balance in 31/12/2020 in parent co 50,000 & in subsidiary co 60,000 what is amount of equipment in consolidated balance sheet in 31/12/2020 Select one: a. 120,000 b. 100,000 c. 110,000 d. 102,000
In 1/1/2024 Smart co. with owner equity (ordinary shares 1,500,0000, premium 2,500,000 and retained earning 1,800,000) purchased 10% of Welly co.with owner equity (ordinary shares 800,0000, premium700,000 and retained earning 1,000,000) by isuing 50,000 of its 25par and 5 market price. In that date the inventory of welly book value was 100,000 and market value 140,000, equipment with book value 250,000 and fair market 320,000(7 years) In 31/12/2024 ART income was 280,000 before recorded any of DORPY and paid dividend 70,000, and income was 80,000 with 40,000 dividend, the market price share for Smart was 125 and 75 for welly in 31/12/2024 required: journalize all required entries for this investment in 01/01/2024 and 31/12/2024 with any elemination entries in 31/12/2024
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es On January 1, 2023, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Incorporated, for $1,107,000 in cash and stock options. At the acquisition date, NetSpeed had common stock of $1,150,000 and Retained Earnings of $57,500. The acquisition-date fair value of the 10 percent noncontrolling interest was $123,000. QuickPort attributed the $22,500 excess of NetSpeed's fair value over book value to a database with a five-year remaining life. During the next two years, NetSpeed reported the following: Items 2023 2024 Net Income $ 31,500 45,000 Dividends Declared $ 4,500 4,500 On July 1, 2023, QuickPort sold communication equipment to NetSpeed for $28,500. The equipment originally cost $32,500 and had accumulated depreciation of $5,500 and an estimated remaining life of three years at the date of the Intra-entity transfer. Required: a. Compute the equity method balance in QuickPort's Investment in NetSpeed, Incorporated, account as of December 31, 2024. b.…
X co, purchased 60% of Y Common stock at 1/1/2020 for $ 300,000 ,on the same date the y co stock was $ 100,000 and retained earning $120,000 , at acquisition date the net assets of y co. book value was equal to fair value except ( inventory FV more than BV of $26,000) and (land its FV more than BV10,000 ) (Building its FV more than BV by $ 14,000 ) but ( equipment its FV less than B V by $10,000) if Y CO. reported $160,000 net income for 31/12/2020 and paid $ 60,000 dividends . Other information 1- the y inventory completely sold during 2020 2- the building useful life was 7 years , but equipment 5 years 3- there is no impairment for goodwill during 2020 what is amount of NCI in net assets reported in consolidated Balance sheet on 1/1/2020 Select one: a. 88,000 b. 200,000 c. 75,000 d. 85,000
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