Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2023, for $4,100 cash. As of that date Clark has the following trial balance:DebitCreditCashAccounts receivable$ 500600Inventory900Buildings (net) (5-year life)1,600Equipment (net) (2-year life)1,000Land900Accounts payableLong-term liabilities (due 12/31/25)Common stockAdditional paid-in capital$ 4001,9001,000700Retained earnings1,500$ 5,500$ 5,500TotalNet income and dividends reported by Clark for 2023 and 2024 follow:20232024Net incomeDividends$ 120$ 1404050The fair value of Clark's net assets that differ from their book values are listed below:Fair ValueBuildingsEquipmentLandLong-term liabilities$ 1,2001,3501,3001,750Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life.Compute the amount of Clark's buildings that would be reported in a December 31, 2023, consolidated balance sheet.

Consolidation is an activity in which financial statements of a parent and its subsidiary should be…

Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2023, for $4,100 cash. As of that date Clark has the following trial balance: Cash Accounts receivable Debit $ 500 Credit 600 Inventory 900 Buildings (net) (5-year life) 1,600 Equipment (net) (2-year life) 1,000

Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2023, for $4,100 cash. As of that date Clark has the following trial balance: Cash Accounts receivable Debit $ 500 Credit 600 Inventory 900 Buildings (net) (5-year life) 1,600 Equipment (net) (2-year life) 1,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 8MC

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Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2020, for $4,100 cash. As of that date Clark has the following trial balance: Debit Credit Cash $ 500 Accounts receivable 600 Inventory 900 Buildings (net) (5 year life) 1,600 Equipment (net) (2 year life) 1,000 Land 900 Accounts payable $ 400 Long-term liabilities (due 12/31/22) 1,900 Common stock 1,000 Additional paid-in capital 700 Retained earnings 1,500 Total $ 5,500 $ 5,500 Net income and dividends reported by Clark for 2020 and 2021 follow: 2020 2021 Net income $ 120 $ 140 Dividends 40 50 The fair value of Clark’s net assets that differ from their book values are listed below: Fair Value Buildings $ 1,200 Equipment 1,350 Land 1,300 Long-term liabilities 1,750 Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life. A. Compute the amount of Clark’s equipment that would be reported in a December 31, 2020, consolidated balance sheet.…
On July 1, 2020, Blue George Company purchased 25% interest of Pink Conrad for P150,000. Blue George incurred transaction cost equal to 5% on the transaction price. On October 1, 2020, Pink Conrad declared dividends of P80,000. At the end of 2020, Pink Conrad reported net income of P200,000. On January 1, 2021, the fair values of Pink Conrad's net assets were as follows:Current Assets - P100,000;Equipment - P150,000;Patent – P120,000;Land - P50,000;Buildings - P300,000; andLiabilities - P80,000. On January 1, 2021, Blue George Company purchased 50% interest of the Pink Conrad Company by issuing 100,000 shares of its P1 par value stock when the fair value of the stock was P6.20. Pink Conrad paid for the legal fees of P10,000 and securities SEC registration of P20,000 which was reimbursed by Blue George. The Patent of Pink Conrad refers to the technology purchased by Pink Conrad from Blue George years ago. Blue George had an outstanding unearned revenue related to the Patent amounting to…
On July 1, 2020, Blue George Company purchased 25% interest of Pink Conrad for P150,000. Blue George incurred transaction cost equal to 5% on the transaction price. On October 1, 2020, Pink Conrad declared dividends of P80,000. At the end of 2020, Pink Conrad reported net income of P200,000. On January 1, 2021, the fair values of Pink Conrad's net assets were as follows:Current Assets - P100,000;Equipment - P150,000;Patent – P120,000;Land - P50,000;Buildings - P300,000; andLiabilities - P80,000. On January 1, 2021, Blue George Company purchased 50% interest of the Pink Conrad Company by issuing 100,000 shares of its P1 par value stock when the fair value of the stock was P6.20. Pink Conrad paid for the legal fees of P10,000 and securities SEC registration of P20,000 which was reimbursed by Blue George. The Patent of Pink Conrad refers to the technology purchased by Pink Conrad from Blue George years ago. Blue George had an outstanding unearned revenue related to the Patent amounting to…
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the following trial balance: Credit $ 57,300 Debit Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year renaining life) Cash and short-term investnents Common stock Equipment (net) (5-year remaining life) Inventory Land Long-tern liabilities (mature 12/31/23) Retained earnings, 1/1/20 Supplies Totals $ 42,200 50, 000 214, 000 82,250 250,000 375,000 98,500 117,000 170,000 409,650 16, 000 $936,950 $ 936, 950 During 2020, Abernethy reported net income of $117,500 while declaring and paying dividends of $15.000. During 2021, Abernethy reported net income of $171,250 while declaring and paying dividends of $55,000, Assume that Chapman Company acquired Abernethy's common stock for $816.280 in cash. Assume that the equipment and long-term liabilities had fair values of $396,950 and $140,720. respectively, on the acquisition date. Chapman uses…
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Items Debit Accounts payable Accounts receivable Credit $ 56,700 $ 43,800 Cash and short-term investments Additional paid-in capital Buildings (net) (4-year remaining life) Common stock 50,000 143,000 80,250 250,000 Equipment (net) (5-year remaining life) Inventory 295,000 110,500 Land 112,000 Long-term liabilities (mature 12/31/26) Retained earnings, 1/1/23 171,000 268,750 Supplies 11,900 Totals $ 796,450 $ 796,450 During 2023, Abernethy reported net income of $122,500 while declaring and paying dividends of $15,000. During 2024, Abernethy reported net income of $159,250 while declaring and paying dividends of $49,000. Assume that Chapman Company acquired Abernethy's common stock by paying $744,750 in cash. All of Abernethy's accounts are estimated to have a fair value approximately equal to present book values. Chapman uses the partial…
rroDiems 19 through 21 should be viewed as independent situations. They are based on the following data: Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the following trial balance: Page 136 Debit Credit Accounts payable $ 50,000 Accounts receivable $ 40,000 Additional paid-in capital Buildings (net) (4-year remaining life) 50,000 120,000 Cash and short-term investments 60,000 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 200,000 90,000 Land 80,000 Long-term liabilities (mature 12/31/23) 150,000 Retained earnings, 1/1/20 100,000 Supplies 10,000 $600,000 $600,000 Totals During 2020, Abernethy reported net income of $80,000 while declaring and paying dividends of $ 10,000. During 2021, Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000. LO 3-3a 1. Assume that Chapman Company acquired Abernethy's common stock for $490,000 in cash. As of January 1, 2020,…
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Items Accounts payable Accounts receivable Debit Credit $ 53,700 $ 41,000 Additional paid-in capital Buildings (net) (4-year remaining life) 50,000 184,000 Cash and short-term investments 77,250 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 400,000 117,500 Land Long-term liabilities (mature 12/31/26) Retained earnings, 1/1/23 Supplies Totals 107,500 173,000 417,450 16,900 $ 944,150 $ 944,150 During 2023, Abernethy reported net income of $98,000 while declaring and paying dividends of $12,000. During 2024, Abern reported net income of $128,250 while declaring and paying dividends of $39,000. Assume that Chapman Company acquired Abernethy's common stock by paying $890,450 in cash. All of Abernethy's accounts estimated to have a fair value approximately equal to present book values. Chapman uses the partial equity method…
On January 1, 2021, P Corporation purchases from an unrelated person all the outstanding stock of S Corporation for $90,000. S's balance sheet on the purchase date is as follows: Basis Fair Market Value Assets Cash $ 5,000 $ 5,000 Accounts Receivable 20,000 20,000 Inventory (LIFO) 20,000 40,000 Equipment (accumulated depreciation of $10,000) 30,000 45,000 Total Assets $75,000 $110,000 Liabilities Accounts payable $20,000 $ 20,000 Equity 55,000 90,000 Total liabilities and equity $75,000 $110,000 P properly elects § 338. S's tax rate is 21 percent. a. What is the aggregate basis of S's assets after this transaction? b. What is the basis for each individual asset?
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Items Debit Credit Accounts payable - $ 56,400 Accounts receivable $ 43,900 - Additional paid-in capital - 50,000 Buildings (net) (4-year remaining life) 217,000 - Cash and short-term investments 76,750 - Common stock - 250,000 Equipment (net) (5-year remaining life) 367,500 - Inventory 96,500 - Land 122,000 - Long-term liabilities (mature 12/31/26) - 182,500 Retained earnings, 1/1/23 - 396,250 Supplies 11,500 - Totals $ 935,150 $ 935,150 During 2023, Abernethy reported net income of $103,500 while declaring and paying dividends of $13,000. During 2024, Abernethy reported net income of $145,250 while declaring and paying dividends of $47,000. Assume that Chapman Company acquired Abernethy’s common stock for $793,300 in cash. As of January 1, 2023, Abernethy’s land had a fair value of $134,000, its buildings…
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year remaining Life) Cash and short-term investments Common stock Equipment (net) (5-year remaining life) Inventory Land Long-term Liabilities (mature 12/31/26) Retained earnings, 1/1/23 Supplies Totals view transaction list Items Consolidation Worksheet Entries 1 2 During 2023, Abernethy reported net income of $87,000 while declaring and paying dividends of $11,000. During 2024, Abernethy reported net income of $122,500 while declaring and paying dividends of $55,000. Date Assume that Chapman Company acquired Abernethy's common stock for $873,250 In cash. As of January 1, 2023, Abernethy's land had a fair value of $129,800, its buildings were valued at $243,800, and its equipment was appralsed at $403,750. Chapman uses the equity method for this Investment.…
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year remaining life) Cash and short-term investments Common stock Equipment (net) (5-year remaining life) Inventory Land Long-term liabilities (mature 12/31/26) Retained earnings, 1/1/23 Supplies No 1 2 3 4 5 6 During 2023, Abernethy reported net income of $126,000 while declaring and paying dividends of $16,000. During 2024, Abernethy reported net income of $174,000 while declaring and paying dividends of $49,000. 7 Assume that Chapman Company acquired Abernethy's common stock by paying $785,800 in cash. All of Abernethy's accounts are estimated to have a fair value approximately equal to present book values. Chapman uses the partial equity method to account for its investment. 8 Items Totals Required: Prepare the consolidation worksheet entries for December…
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Items Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year remaining life) Cash and short-term investments Common stock Equipment (net) (5-year remaining life) Inventory Land Long-term liabilities (mature 12/11/26) Retained earnings, 1/1/23 Supplies Totals Debit $ 41,500 211,000 70,750 430,000 139,000 121,500 Credit $ 58,900 50,000 250,000 174,000 498,450 17,600 $ 1,031,350 $ 1,031,350 During 2023, Abernethy reported net income of $120,000 while declaring and paying dividends of $15,000. During 2024, Abernethy reported net income of $170,000 while declaring and paying dividends of $48,000. Assume that Chapman Company acquired Abernethy's common stock for $902,200 in cash. As of January 1, 2023, Abernethy's land had a fair value of $133,000, its buildings were valued at $277,000, and its equipment was…