Following are separate financial statements of Michael Company and Aaron Company as of December 31, 2018 (credit balances indicated by parentheses). Michael acquired all of Aaron's outstanding voting stock on January 1, 2014, by issuing 20,000 shares of its own $1 par common stock. On the acquisition date, Michael Company's stock actively traded at $26.50 per share.
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- Following are separate financial statements of Michael Company and Aaron Company as of December 31, 2024 (credit balances indicated by parentheses). Michael acquired all of Aaron’s outstanding voting stock on January 1, 2020, by issuing 20,000 shares of its own $1 par common stock. On the acquisition date, Michael Company’s stock actively traded at $32.50 per share. Accounts Michael Company 12/31/24 Aaron Company 12/31/24 Revenues $ (689,500) $ (418,500) Cost of goods sold 309,750 164,250 Amortization expense 119,700 101,500 Dividend income (5,000) 0 Net income $ (265,050) $ (152,750) Retained earnings, 1/1/24 $ (1,002,000) $ (730,000) Net income (above) (265,050) (152,750) Dividends declared 90,000 5,000 Retained earnings, 12/31/24 $ (1,177,050) $ (877,750) Cash $ 192,000 $ 19,100 Receivables 447,000 231,000 Inventory 642,000 365,000 Investment in Aaron Company 650,000 0 Copyrights 545,000 387,000 Royalty agreements 1,001,000 416,000 Total assets $…Following are separate financial statements of Michael Company and Aaron Company as of December 31, 2021 (credit balances indicated by parentheses). Michael acquired all of Aaron's outstanding voting stock on January 1, 2017, by issuing 20,000 shares of its own $1 par common stock. On the acquisition date, Michael Company's stock actively traded at $28.50 per share. Michael Company 12/31/21 $ (644,500) 287,250 129,300 (5,000) $ (232,950) $(1,046,000) (232,950) 90,000 $(1,188,950) 140,000 429,000 611,000 570,000 512,000 1,015,000 $3,277,000 $(988,050) (300,000) (500,000) (300,000) (1,188,950) $(3,277,000) Revenues Cost of goods sold Amortization expense Dividend income Net income Retained earnings, 1/1/21 Net income (above) Dividends declared Retained earnings, 12/31/21 Cash Receivables Inventory Investment in Aaron Company Copyrights Royalty agreements Total assets Liabilities Preferred stock. Common stock Additional paid-in capital Retained earnings, 12/31/21 Total liabilities and…On December 31, 2016, Akron, Inc. purchased 5 Percent of Zip’s Company's common shares on the open market in exchange for $16,000. On December 31, 2017, Akron, Inc., acquires an additional 25 percent of Zip Company's outstanding common stock for $95,000. During the next two years, the following information is available for Zip Company: Income Dividends Declared Common StockFair Value (12/31) 2016 $320,000 2017 $75,000 $7,000 380,000 2018 88,000 15,000 480,000 At December 31, 2017, Zip reports a net book value of $290,000. Akron attributed any excess of its 30 percent share of Zip's fair over book value to its share of Zip's franchise agreements. The franchise agreements had a remaining life of 10 years at December 31, 2017. Assume Akron applies the equity method to its Investment in Zip account: What amount of equity income should Akron report for 2018? On Akron's December 31, 2018, balance sheet, what amount is reported for the Investment in Zip…
- Following are separate financial statements of Michael Company and Aaron Company as of December 31, 2021 (credit balances indicated by parentheses). Michael acquired all of Aaron’s outstanding voting stock on January 1, 2017, by issuing 20,000 shares of its own $1 par common stock. On the acquisition date, Michael Company’s stock actively traded at $23.50 per share. Michael Company12/31/21 Aaron Company12/31/21 Revenues $ (610,000 ) $ (370,000 ) Cost of goods sold 270,000 140,000 Amortization expense 115,000 80,000 Dividend income (5,000 ) 0 Net income $ (230,000 ) $ (150,000 ) Retained earnings, 1/1/21 $ (880,000 ) $ (490,000 ) Net income (above) (230,000 ) (150,000 ) Dividends declared 90,000 5,000 Retained earnings, 12/31/21 $ (1,020,000 ) $ (635,000 ) Cash $ 110,000 $ 15,000 Receivables 380,000 220,000 Inventory 560,000 280,000 Investment in Aaron Company 470,000…Following are separate financial statements of Michael Company and Aaron Company as of December 31, 2018 (credit balances indicated by parentheses). Michael acquired all of Aaron’s outstanding voting stock on January 1, 2014, by issuing 20,000 shares of its own $1 par common stock. On the acquisition date, Michael Company’s stock actively traded at $23.50 per share.On the date of acquisition, Aaron reported retained earnings of $230,000 and a total book value of $360,000. At that time, its royalty agreements were undervalued by $60,000. This intangible was assumed to have a six-year remaining life with no residual value. Additionally, Aaron owned a trademark with a fair value of $50,000 and a 10-year remaining life that was not reflected on its books. Aaron declared and paid dividends in the same period.a. Using the preceding information, prepare a consolidation worksheet for these two companies as of December 31, 2018.b. Instead of the initial value method, assume now that Michael…On 1 October 2018, KING acquired 30,000 of VAM's 100,000 shares in exchange for 75,000 of its own shares. The market value of KING's shares at the date of this share exchange was $3.20 per share. VAM's net profit for the financial year ended 31 March 2019 was $200,000. $40,000 of this profit was made by VAM from 1 April 2018 to 30 September 2018. VAM is the only associate of KING. What amount will be shown as 'investment in associate' in the consolidated statement of financial position of KING as at 31 March 2019? Please provide explaination. A) $288,000 B) $300,000 C) $156,000 D) $252,000 E) None of the above
- On July 1, 2014, Pipe Corporation issued 23,000 shares of its own $2 par value common stock for 40,000 shares of the outstanding stock of Sector Inc. in an acquisition. Pipe common stock at July 1, 2014 was selling at $16 per share. Just before the business combination, balance sheet information of the two corporations was as follows: Required:Prepare the journal entry on Pipe Corporation's books to account for the investment in Sector Inc.On January 1, 2021, PingPing Corp. acquired all the assets and liabilities of Willy Corp. by issuing shares of P10 par value ordinary shares. PingPing Corp. shares has a market value of P40 per share. The statement of financial position of Willy Corp. as of January 1, 2021, is as follows: Current assets – P640,000; Equipment – P1,760,000; Liabilities – P800,000; Common shares (P4 par) – P160,000; Share premium – P640,000; Retained earnings – P800,000. The current assets and equipment have fair values of P800,000 and P3,200,000, respectively. PinPing Corp. issued sufficient number of shares so that the fair market values of the shares issued is equal to the fair market value of Willy Corp.’s net assets. How many ordinary shares should PingPing Corp. must issue to have a gain on bargain purchase of P200,000? *... a. 85,000 shares b. 74,000 shares c. 75,000 shares d. 84,000 shares pls. answer it asap. thank youOn April 1, 2018, Gangnam Company purchased 25,000 ordinary shares of Psy Inc. at an amount that reflected book value as of that date. At the time of purchase, Psy Inc. had 100,000 ordinary shares outstanding. Gangnam had no ownership interest in Wings before the purchase. The first quarter statement ending March 31, 2018, of Psy Inc. had a profit of P480,000. For the year ended December 31, 2018, Psy Inc. reported a profit of P2,400,000. Psy Inc. paid Ganam dividends of P60,000 on June 1 and P80,000 on December 31, 2018. The carrying amount of the investment in Psy Inc. on December 31, 2018, is P4,840,000. What was Chicken Company’s acquisition cost of its investment in Wings Company on April 1, 2018?
- On January 2, 2016, Barney Co. acquired all of Dora's ordinary shares for $180,000. On that date, the carrying amounts of Dora's assets and liabilities is equal to their fair value of $198,000 and 48,000, respectively. On the same year, Dora paid cash dividends of $3,000. Below is the financial position and statement of income on December 31, 2016. Barney Co. Dora Co. Operating Income $60,000 $30,000 Income from Subsidiary $3,000 - Net Income 63,000 21,000 Investment in Subsidiary 180,000 - Accumulated Profits 105,000 84,000 Shareholders' Equity $393,000 $168,000 WHat is the consolidated accumulated profits?. Min Hyun Jing Ltd. purchased 21,600 common shares of Glastone Ltd. on January 1, 2018, when the market price was $27.50 per share. This gave Min Hyun Jing 12% of the shares issued by Glastone Ltd. Min Hyun Jing Ltd. has a December 31 year end. For the year ended December 31, 2018, Glastone reported net income of $260,000 and declared dividends of $1.10 per share on December 31. The trading price of Glastone’s shares on that date was $31.20. For the year ended December 31, 2019. Glastone reported net income of $280,000 and declared dividends of $1.15 per share on December 31. The trading price of Glastone’s shares on December 31 was 34.60. Min Hyun Jing Ltd. purchased an additional 20,000 common shares on this date. For the year ended December 31, 2020, Glastone reported a net loss of $80,000, but still declared dividends on December 31, in the amount of $0.75 per share. The trading price of Glastone’s shares on December 31, 2019 was $30.50 per share. For the year ended…On December 31, 2016, Akron, Inc. purchased 5 Percent of Zip Company’s common shares on the open market in exchange for $16,000. On December 31, 2017, Akron, Inc., acquires an additional 25 percent of Zip Company’s outstanding common stock for $95,000.During the next two years, the following information is available for Zip Company:At December 31, 2017, Zip reports a net book value of $290,000. Akron attributed any excess of its 30 percent share of Zip’s fair over book value to its share of Zip’s franchise agreements. The franchise agreements had a remaining life of 10 years at December 31, 2017.a. Assume Akron applies the equity method to its Investment in Zip account:1. What amount of equity income should Akron report for 2018?2. On Akron’s December 31, 2018, balance sheet, what amount is reported for the Investment in Zip account?b. Assume Akron uses fair-value accounting for its Investment in Zip account:1. What amount of income from its investment in Zip should Akron report for…