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-

None

C4

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.…

Hh1.

A-1

A5

None

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 consistedof $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- 2011are summarized as follows (in…

X co, purchased 80% 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 the amount of income from subsidiary reported  in parents co income statement on 31/12/2020 Select one: a. 122,800 b. 102,000 c. 107,200 d. 128,000