Purchase Corporation purchased 60 percent of Steal Company ownership on January 1, 20X7, for $277,500. Steal reported the following net income and dividend payments: Net Year Income 20X7$45,000 20X8 55,000 20X9 30,000 Dividends Paid $25,000 35,000 10,000 On January 1, 20X7, Steal had $250,000 of $5 par value common stock outstanding and retained earnings of $150,000, and the fair value of the noncontrolling interest was $185,000. Steal held land with a book value of $22,500 and a market value of $30,000 and equipment with a book value of $320,000 and a market value of $360,000 at the date of combination. The remainder of the differential at acquisition was attributable to an increase in the value of patents, which had a remaining useful life of 10 years. All depreciable assets held by Steal at the date of acquisition had a remaining economic life of eight years. Required: a. Compute the increase in the fair value of patents held by Steal. Increase in fair value $ 15,000 b. Prepare the consolidation entries needed at January 1, 20X7, to prepare a consolidated balance sheet. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Purchase Corporation purchased 60 percent of Steal Company ownership on January 1, 20X7, for $277,500. Steal reported the following net income and dividend payments: Net Year Income 20X7$45,000 20X8 55,000 20X9 30,000 Dividends Paid $25,000 35,000 10,000 On January 1, 20X7, Steal had $250,000 of $5 par value common stock outstanding and retained earnings of $150,000, and the fair value of the noncontrolling interest was $185,000. Steal held land with a book value of $22,500 and a market value of $30,000 and equipment with a book value of $320,000 and a market value of $360,000 at the date of combination. The remainder of the differential at acquisition was attributable to an increase in the value of patents, which had a remaining useful life of 10 years. All depreciable assets held by Steal at the date of acquisition had a remaining economic life of eight years. Required: a. Compute the increase in the fair value of patents held by Steal. Increase in fair value $ 15,000 b. Prepare the consolidation entries needed at January 1, 20X7, to prepare a consolidated balance sheet. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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 6MCQ: Ames Corporation repurchases 10,000 shares of its common stock for $12 per share. The shares were...

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Purchase Corporation purchased 60 percent of Steal Company ownership on January 1, 20X7, for $283,500. Steal reported the following net income and dividend payments: Year Net Income Dividends Paid 20X7 $ 48,000 $ 28,000 20X8 58,000 38,000 20X9 33,000 13,000 On January 1, 20X7, Steal had $256,000 of $10 par value common stock outstanding and retained earnings of $156,000, and the fair value of the noncontrolling interest was $189,000. Steal held land with a book value of $26,500 and a market value of $34,000 and equipment with a book value of $338,000 and a market value of $378,000 at the date of combination. The remainder of the differential at acquisition was attributable to an increase in the value of patents, which had a remaining useful life of 10 years. All depreciable assets held by Steal at the date of acquisition had a remaining economic life of eight years. Required: Compute the increase in the fair value of patents held by Steal. Prepare the…
Purchase Corporation purchased 60 percent of Steal Company ownership on January 1, 20X7, for $277,500. Steal reported the following net income and dividend payments: Dividends Paid Year Net Income 20X7 $ 45,000 $ 25,000 20X8 55,000 35,000 10,000 20X9 30,000 On January 1, 20X7, Steal had $250,000 of $6 par value common stock outstanding and retained earnings of $150,000, and the fair value of the noncontrolling interest was $185,000. Steal held land with a book value of $23,500 and a market value of $31,000 and equipment with a book value of $335,000 and a market value of $375,000 at the date of combination. The remainder of the differential at acquisition was attributable to an increase in the value of patents, which had a remaining useful life of 10 years. All depreciable assets held by Steal at the date of acquisition had a remaining economic life of eight years. Required: a. Compute the increase in the fair value of patents held by Steal. Increase in fair value
On July 1, 20x6 TRUST Company purchased 80% of the outstanding shares of DUREX Company at a cost of Pl,600,000. on that date, DUREX had P1,000,000 of capital stock and P1,400,0a00 of retained earnings. For 20x6, TRUST had income of P560,000 from its separate operations and paid dividends of P300,000. For 20x6, DUREX reported income of P130,000 and paid dividends of P60,000. All the assets and liabilities of DUREX have book values equal to their respective fair market values. Assume income was earned evenly throughout the year except for the intercompany transaction on October 1. On October 1, TRUST purchased an equipment from DUREX for P200,000. The book value of the equipment on that date was P240,000. The loss of P40,000 is reflected in the income of DUREX indicated above. The equipment is expected to have a useful life of 5 years from the date of sale. In the December 31, 20x6 consolidated statement of financial position, how much is the consolidated net income attributable to the…
On January 1, 20X1, Como Company purchased 45% of the outstanding common shares of the Lite Company for $200,000. The net assets of Lite Company totaled $400,000. The inventory had a book value of $100,000 and a fair value of $120,000. Excess cost attributable to inventory is written off in 20X1. During 20X1, Lite Company earned $200,000 and declared a dividend of $40,000 for the year. The excess amount paid for Lite Company attributable to inventory is: Multiple Choice $22,000. $20,000. $11,000. $9,000.
On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at acost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth ofaccumulated profits.For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets andliabilities of Sedrosky Company are at fair market value.On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost ofP67,500. The equipment is expected to have a useful life of 10 years from this date.For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, whichincluded the gain of P45,000 on equipment sold to Sedrosky Company.REQUIREMENTS:1. Prepare the elimination entries for 20x22. Compute for the following:a. Amount to be shown as consolidated net income.b. Net income attributable to owners of the parent.
On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits. For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value. On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date. For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Sedrosky Company. Compute the amount to be shown as consolidated net income.
On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits. For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value. On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date. For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Sedrosky Company. What is the Non-controlling Interest in Net Assets of Subsidiary as of December 31, 20x2?
On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at acost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth ofaccumulated profits.For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets andliabilities of Sedrosky Company are at fair market value.On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost ofP67,500. The equipment is expected to have a useful life of 10 years from this date.For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, whichincluded the gain of P45,000 on equipment sold to Sedrosky Company. Requirement: c. Non-controlling Interest in Net Income of Subsidiary for 20x2.d. Non-controlling Interest in Net Assets of Subsidiary as of December 31, 20x2.
On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits.For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value.On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date.For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Sedrosky Company.REQUIREMENTS: a. Amount to be shown as consolidated net income. b. Net income attributable to owners of the parent.
On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits.For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value.On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date.For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Sedrosky Company.REQUIREMENTS: c. Non-controlling Interest in Net Income of Subsidiary for 20x2. d. Non-controlling Interest in Net Assets of Subsidiary as of December 31, 20x2.
On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits.For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value.On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date.For the year 20x2, Pfieter Company reported income from its own operations REQUIREMENTS: 1. Prepare the elimination entries for 20x2
On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits.For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value.On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date.For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Sedrosky Company. Compute for the following: a. Amount to be shown as consolidated net income. b. Net income attributable to owners of the parent. c. Non-controlling Interest in Net Income of Subsidiary for 20x2.