Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported c stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $3 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess conside transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review goodwill has not been impaired. Demers earns income and pays dividends as follows: 2019 2020 2021 Net income $ Dividends 100,000 40,000 $ 120,000 50,000 $ 130,000 60,000

Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported c stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $3 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess conside transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review goodwill has not been impaired. Demers earns income and pays dividends as follows: 2019 2020 2021 Net income $ Dividends 100,000 40,000 $ 120,000 50,000 $ 130,000 60,000

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

IIn 2018, Martin Corp. acquired Glynco and recorded goodwill of $100 million. Martin considers Glynco a separate reporting unit. By the end of 2021, the net assets (including goodwill) of Glynco are $320 million and its estimated fair value is $260 million. The amount of the impairment loss that Martin would record for goodwill at the end of 2021 is:
please answer all parts within 30 minutes...
On January 1, 2020, Faye Company purchased Che Company at a cost that resulted in recognition of goodwill of 2,000,000. During the first quarter of 2020, Faye Company spent an additional 800,000 on expenditures designed to develop and maintain goodwill by training and hiring new employees. Due to these expenditures, on December 31, 2020, Faye Company estimated that the benefit period of goodwill was indefinite. In the December 31, 2020 how much is recorded as outright expense? 1,800,000 800,000 2,000,000 1,900,000
On January 1, 2021 ABC acquired 90% of DEF. Analysis of data relative to this purchase indicates that goodwill of $70,000 was acquired in this purchase. The goodwill is unimpaired. On July 1, 2021, DEF sold a patent to ABC. The sales price was $140,000. DEF's book value was $70,000. DEF estimates that the patent has a life of 5 years and no salvage value. It will use straight line depreciation. For 2023, ABC's net income is $560,000 from its own operations. DEF had net income of $140,000. The 2023 net income attributable to equity holders of ABC is: O 629,300 O 637,000 O 616,000 O 623,000
in Reynolds buys building (10 year useful life) on January 1, 2019 for $1,000,000. Straight line depreciation is used. On the same day, Reynolds sells building to 90% owned subsidiary for $1,200,000. Subsidiary also uses a remaining useful life of 10 years. What is the appropriate worksheet entry for "excess depreciation" that must be prepared at December 31, 2019? shift O Dr. Depreciation Expense $120,000. Cr. Accumulated Depreciation $120,000 O Dr. Depreciation Expense $20,000. Cr. Accumulated Depreciation $20,000 tab O Dr. Accumulated Depreciation $20,000 Cr. Depreciation Expense $20,000 caps lock O Dr. Accumulated Depreciation $120,000. Cr. Depreciation Expense $120,000 esc 1 9,680 ! 1 Q A T control option Z 72 W S OCT 25 #3 X H command 80 F3 E D $ 4 с 160 000 000 F4 R tv F 175⁰ % F5 V T G
On September 1, 2019, Plant Co. acquired 75% interest in Zombie Co. On this date, Zombie's net identifiable assets have a carrying amount of ₱180,000, which approximates fair value. In December 2019, Zombie sold goods to Plant for ₱81,000. Zombie had marked up these goods by 50% based on cost. One-third of these goods remain unsold at year-end. The group assessed that there is no impairment loss on goodwill for the current year. The individual statements of profit or loss of the entities for the year ended December 31, 2019 are shown below: Plant Co. Zombie Co. Revenue 1,000,000 720,000 Cost of sales (400,000) (300,000) Gross profit 600,000 420,000 Distribution costs (200,000) (100,000) Administrative costs (80,000) (45,000) Profit before tax 320,000 275,000 Income tax expense (96,000) (95,000) Profit after tax 224,000 180,000 All of Zombie’s income and expenses (including profit from intercompany sale) were…
What amount is reported for trademarks in the 2021 consolidated balance sheet? Multiple Choice O $576,000. $568,000. $560,000. $552,000.
On the date of the second purchase. CPA determines that the equipment of Sticky was understated by P150,000 and had a 5-year remaining life. All other book values approximate fair values. Any remaining excess is attributed to goodwill. On January 1, 2015 consolidated statement of financial position, what is the amount of goodwill to be reported?
On December 31, 2024, the end of the fiscal year, Revolutionary Industries completed the sale of its robotics business for $11.2 million. The robotics business segment qualifies as a component of the entity, according to GAAP. Consider the following additional information: The book value of the assets of the segment was $8.1 million at the time of the sale. The income from operations of the segment during 2024 was $5.1 million. Pretax income from other continuing operations for the year totaled $13.1 million. The income tax rate is 25 %. Prepare the lower portion of the 2024 income statement beginning with income from continuing operations before income taxes. Note: Loss amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions. For example, $4,000,000 rather than $4.
On March 1, 2021, Astrid Corporation purchased an equipment for P500,000 with an estimated residual value of P50,000 at the end of its five-year useful life. Astrid Corporation uses the straight-line method of depreciation. The equipment was immediately leased to Covaxin Company for two years at a monthly rental of P18,000 payable at the beginning of the month starting on March 1, 2021. On this date, Covaxin Company paid Astrid Corporation a lease bonus of P12,000. During the year 2021, Astrid incurred insurance and maintenance costs for the equipment of P8,000 and P2,000, respectively. 1. How much is Astrid Corporation's net revenue from this lease for the year ended December 31, 2021?