Bha Pencil Company acquired 70 percent of Stylus Corporation's stock on January 2, 20X3, for $74,200 cash. Summarized balance sheetdata for the companies on December 31, 20X2, follow:CashOther AssetsTotal DebitsCurrent LiabilitiesCommon StockRetained EarningsTotal CreditsAssetsPencil CompanyBook Value$ 217,000402,000$ 619,000Total AssetsLiabilities and Stockholders' Equity$ 90,000290,000239,000$ 619,000Fair Value$ 217,000402,000PENCIL COMPANY AND SUBSIDIARYConsolidated Balance SheetJanuary 2, 20X3Total Liabilities and Stockholders' EquityRequired:Prepare a consolidated balance sheet immediately following the acquisition.90,000Stylus CorporationBook Value$ 52,000124,000$ 176,000$70,00052,00054,000$ 176,000Fair Value$ 52,000124,00070,000

The fundamental idea behind group companies is that a single organization, called the parent company…

Pencil Company acquired 70 percent of Stylus Corporation's stock on January 2, 20X3, for data for the companies on December 31, 20X2, follow: Cash Other Assets Total Debits Current Liabilities Common Stock Retained Earnings Total Credits Assets Pencil Company Book Value $ 217,000 402,000 $619,000 $ 90,000 290,000 239,000 $ 619,000 Total Assets Liabilities and Stockholders' Equity Fair Value $ 217,000 402,000 PENCIL COMPANY AND SUBSIDIARY Consolidated Balance Sheet January 2, 20X3 Total Liabilities and Stockholders' Equity Required: Prepare a consolidated balance sheet immediately following the acquisition. 90,000 Stylus Corporation Book Value Fair Value $ 52,000 124,000 $ 52,000 124,000 $ 176,000 $70,000 52,000 54,000 $ 176,000 70,000 Summi

Pencil Company acquired 70 percent of Stylus Corporation's stock on January 2, 20X3, for data for the companies on December 31, 20X2, follow: Cash Other Assets Total Debits Current Liabilities Common Stock Retained Earnings Total Credits Assets Pencil Company Book Value $ 217,000 402,000 $619,000 $ 90,000 290,000 239,000 $ 619,000 Total Assets Liabilities and Stockholders' Equity Fair Value $ 217,000 402,000 PENCIL COMPANY AND SUBSIDIARY Consolidated Balance Sheet January 2, 20X3 Total Liabilities and Stockholders' Equity Required: Prepare a consolidated balance sheet immediately following the acquisition. 90,000 Stylus Corporation Book Value Fair Value $ 52,000 124,000 $ 52,000 124,000 $ 176,000 $70,000 52,000 54,000 $ 176,000 70,000 Summi

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 92.4C

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Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and 2018, and the statement of income and retained earnings for the year ended December 31, 2019: Additional information: a. On January 2, 2019, Farrell sold equipment costing 45,000, with a book value of 24,000, for 19,000 cash. b. On April 2, 2019, Farrell issued 1, 000 shares of common stock for 23,000 cash. c. On May 14, 2019, Farrell sold all of its treasury stock for 25,000 cash. d. On June 1, 2019, Farrell paid 50, 000 to retire bonds with a face value (and book value) of 50, 000. e. On July 2, 2019, Farrell purchased equipment for 63, 000 cash. f. On December 31, 2019, land with a fair market value of 150,000 was purchased through the issuance of a long-term note in the amount of 150,000. The note bears interest at the rate of 15% and is due on December 31, 2021. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2019, based on the preceding information. 2. Prepare the statement of cash flows. (Appendix 21.1) Spreadsheet and Statement Refer to the information for Farrell Corporation in P21-13. Required: 1. Using the direct method for operating cash flows, prepare a spreadsheet to support a 2019 statement of cash flows. (Hint: Combine the income statement and December 31, 2019, balance sheet items for the adjusted trial balance. Use a retained earnings balance of 291,000 in this adjusted trial balance.) 2. Prepare the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.)
Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and 2018, and the statement of income and retained earnings for the year ended December 31, 2019: Additional information: a. On January 2, 2019, Farrell sold equipment costing 45,000, with a book value of 24,000, for 19,000 cash. b. On April 2, 2019, Farrell issued 1,000 shares of common stock for 23,000 cash. c. On May 14, 2019, Farrell sold all of its treasury stock for 25,000 cash. d. On June 1, 2019, Farrell paid 50,000 to retire bonds with a face value (and book value) of 50,000. e. On July 2, 2019, Farrell purchased equipment for 63,000 cash. f. On December 31, 2019. land with a fair market value of 150,000 was purchased through the issuance of a long-term note in the amount of 150,000. The note bears interest at the rate of 15% and is due on December 31, 2021. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2019, based on the preceding information. 2. Prepare the statement of cash flows.
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WAG PAPALOKO Inc. has the following balance sheet on January 1, 2018, which is the date of acquisition: Assets Liabilities and Equity Accounts Receivable 79,000 Current Liabilities 145,000 Inventory 112,000 Long-term notes 100,000 Other current assets 55,000 Ordinary share, P1 par 50,000 Equipment (net) 294,000 Share premium 200,000 Goodwill 30,000 Retained earnings 75,000 Total assets 570,000 Total liabilities and equity 570,000 On January 1, 2018, WAG PAPATINAG Corp. acquired the net assets of WAG PAPALOKO Inc. by issuing 7,000 shares of its P25 par value common stock. Subsequently, WAG PAPALOKO Inc. was liquidated and its assets and liabilities merged into WAG PAPATINAG Corp. WAG PAPATINAG Corp. and WAG PAPALOKO Inc. stocks were selling for P40 per share and P6 per share, respectively on January 1, 2018. The book values of WAG PAPALOKO Inc.’s identifiable assets and liabilities equaled their fair…
WAG PAPALOKO Inc. has the following balance sheet on January 1, 2018, which is the date of acquisition: Assets Liabilities and Equity Accounts Receivable 79,000 Current Liabilities 145,000 Inventory 112,000 Long-term notes 100,000 Other current assets 55,000 Ordinary share, P1 par 50,000 Equipment (net) 294,000 Share premium 200,000 Goodwill 30,000 Retained earnings 75,000 Total assets 570,000 Total liabilities and equity 570,000 On January 1, 2018, WAG PAPATINAG Corp. acquired the net assets of WAG PAPALOKO Inc. by issuing 7,000 shares of its P25 par value common stock. Subsequently, WAG PAPALOKO Inc. was liquidated and its assets and liabilities merged into WAG PAPATINAG Corp. WAG PAPATINAG Corp. and WAG PAPALOKO Inc. stocks were selling for P40 per share and P6 per share, respectively on January 1, 2018. The book values of WAG PAPALOKO Inc.’s identifiable assets and liabilities equaled their fair…
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