Under the net asset value method, the practitioner determined the Widget Company's assets had a value of $850,000 and liabilities had a value of $300,000, including notes payable of $100,000. Determine the fair market value of a 75 percent equity interest in the Widget Company.
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Under the net asset value method, the practitioner determined the Widget Company's assets had a value of $850,000 and liabilities had a value of $300,000, including notes payable of $100,000. Determine the fair market value of a 75 percent equity interest in the Widget Company.
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- Assume that the following balance sheets are stated at book value. The fair market value of James's fixed assets is equal to $9,600. Jurion pays $16,360 for James and raises the needed funds through an issue of long-term debt. Current assets $12,225 Net fixed 36,450 assets Total Jurion Co. Total Current assets $3,490 Net fixed assets 6,640 Current assets Fixed assets Goodwill Total $ 5,420 Long-term debt 9,950 Equity 33,305 $48,675 Total $48,675 Current liabilities James, Inc. $10,130 Current liabilities $ 1,420 Long-term debt 1,990 Equity 6,720 Total $10,130 Construct a postmerger balance sheet assuming that Jurion Co. purchases James, Inc., and the purchase method of accounting is used. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Jurion Co., post-merger Current liabilities Long-term debt Equity TotalUse the following information for the next six questions. You are auditing the financial statements of DISUKO Corporation and obtained the following information. DISUKO acquired an investment for P1,000,000. Transaction costs amount to P10,000. At year-end, the investment has a fair value of P900,000. 1. If the investment is classified as financial asset at fair value through profit or loss, how much would it be recorded upon acquisition? 2. If the investment is classified as financial asset at fair value through profit or loss, what is the amount of unrealized gain or loss to be reported in the statement of comprehensive income? 3. If the investment is classified as financial asset at fair value through other comprehensive income, how much would it be recorded upon acquisition? 4. If the investment is classified as as financial asset at fair value through other comprehensive income, what is the amount of unrealized gain or loss. to be reported in the income statement? 5. If the…This period, Amadeus Co. purchased its only available-forsale investment in the notes of Bach Co. for $83,000. The period-end fair value of these notes is $84,500. Amadeus records a a. Credit to Unrealized Gain—Equity for $1,500. b. Debit to Unrealized Loss—Equity for $1,500. c. Debit to Investment Revenue for $1,500. d. Credit to Fair Value Adjustment—Available-for-Sale for $3,500. e. Credit to Cash for $1,500.
- Arizona Corp. acquired the business Data Systems for $320,000 cash and assumed all liabilities at the date of purchase. Data's books showed tangible assets of $260,000, liabilities of $40,000, and stockholder's equity of $220,000. An appraiser assessed the fair market value of the tangible assets at $250,000 at the date of acquisition. Compute the amount of good will acquired Record the qcquisition in a financial statements model When will teh goodwill be written off under the impairment rules Record the acquisition in general journal formatSwifty Corporation purchased a 20% interest in Moss Inc. for $280. This investment gave Swifty significant influence over Moss. During the year, Moss earned net income of $15 and paid dividends of $5. Assuming the purchase price was equal to 20% of Moss's net carrying amount when it was acquired. Prepare Swifty's journal entries related to this investment using the equity method. Swifty applies IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation (To record investment purchase) (To record investment income) (To record collection of dividend) Debit CreditLefty's Piranha Farm generates sales revenue of $260,000 and incurs operating expenses of $140,000. The company incurs a gain of $13,000 from selling securities classified as availablefor- sale and records an unrealized holding loss of $17,000 from adjusting securities available-forsale to fair value at the end of the year. Required: 1. What is the meaning of comprehensive income?
- For letters a to d, identify how much to add or deduct from the Investment in Associate account of ABC based on the following transactions or events: a. As of Jan. 1, 2021, the fair value of the inventory of X was P100,000 higher than its carrying value. All of the inventory were sold as of the end of the year. b. The fair value of equipment held by X is P500,000 while its carrying value is P360,000 as of the beginning of the year. It has a remaining useful life of 3 years as of Dec. 31, 2021. c. X sold inventories costing P150,000 to ABC for P200,000. Only 75% of these inventories were sold by ABC to third parties as of the end of the year. d. Actuarial gains for the year totaled P400,000.Ayayai Corporation purchased a 20% interest in Moss Inc. for $300. This investment gave Ayayai significant influence over Moss. During the year, Moss earned net income of $15 and paid dividends of $5. Assuming the purchase price was equal to 20% of Moss’s net carrying amount when it was acquired.Prepare Ayayai’s journal entries related to this investment using the equity method. Ayayai applies IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title to record investment purchase enter a debit amount enter a credit amount enter an account title to record investment purchase enter a debit amount enter a credit amount (To record investment purchase) enter an account title to record investment income enter a debit amount enter a credit…Lefty's Piranha Farm generates sales revenue of $260,000 and incurs operating expenses of $140,000. The company incurs a gain of $13,000 from selling securities classified as availablefor- sale and records an unrealized holding loss of $17,000 from adjusting securities available-forsale to fair value at the end of the year. Prepare a statement of comprehensive income for Lefty's Piranha Farm.
- Eleven years ago, Lynn, Incorporated purchased a warehouse for $315,000. This year,the corporation sold the warehouse to Firm D for $80,000 cash and D’s assumption ofa $225,000 mortgage. Through date of sale, Lynn deducted $92,300 straight-linedepreciation on the warehouse.Required:a. Compute Lynn’s gain recognized on the sale of the warehouse.b. What is the character of this gain?c. How would your answers change if Lynn was a noncorporate business?Shak Company acquired a financial instrument for P4,000,000 on March 31, 2020. The financial instrument is classified as financial asset at fair value through other comprehensive income. The direct acquisition cost incurred amounted to P700,000. On December 31, 2020, the fair value of the instrument was P5,500,000 and the transaction costs that would be incurred on the sale of the investment are estimated at P600,000. What gain should be recognized in statement of financial position for the year ended December 31, 20207 Select the correct response 900,000 200,000 800,000In its first year, Firm KZ recognized $457,500 ordinary business income and a $13,250 loss on the sale of an investment asset. In its second year, Firm KZ recognized $518,000 ordinary business income, a $20,350 Section 1231 gain, and a $8,070 Section 1231 loss on two sales of operating assets. Required: a. Compute KZ's book and taxable income for its first year. b. Using a 21 percent tax rate, compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the year. c. Compute KZ's book and taxable income for its second year. d. Compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the second year. Answer is not complete. Complete this question by entering your answers in the tabs below. Req A and B Req C and D c. Compute KZ's book and taxable income for its second year. d. Compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the second year. Note:…