ADVANCED ACCOUNTING
14th Edition
ISBN: 9781260361681
Author: Hoyle
Publisher: MCG
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On 1 January 2019 Apples Ltd acquired all the assets and liabilities of Berries Ltd. Details of the consideration transferred are as follows:
Cash of $200,000, half to be paid on 1 January 2019, with the balance due on 1 January 2020. The incremental borrowing rate for Apples Ltd is 10%.
100,000 shares in Apples Ltd were issued. The share price on 1 January 2019 was $5.00 per share. This price represented a six-month high. Costs of issuing the shares was $1,000.
Supply of a motor vehicle to Berries Ltd. The fair value of the motor vehicle is $60,000. The motor vehicle had an original cost of $90,000, and had accumulated depreciation of $40,000 as at 1 January 2019 in Apples Ltd accounting records.
Legal fees and associated with the acquisition totalled $5,000.
Required: Calculate the consideration transferred.
Jackson Inc. purchased 30,000 shares of common stock of the Pixel Corporation for
$10 per share on January 2, 2020. During 2020, Pixel had 100,000 shares of
common stock outstanding, reported net income of $200,000, and paid cash
dividends of $100,000. The fair value of Pixel stock on December 31, 2020 is $12
per share.
On December 31, 2020, what will Jackson report on its Balance Sheet for its
investment in Pixel?
How much revenue should Jackson report for 2020 on its investment in Pixel?
Round your answers to the nearest whole number. Dot not use dollar signs($) or
commas(,).
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Blank # 2
Jack, chief finance officer for sitcom products,
convinced the president of the company to enter
in to a 90days, forward contract to sell 500,000
kronas as a speculative venture. When the
forward contract was acquired on November 1,
2019, the spot rate for the krona was OMR .8041
and the 90days future rate was OMR .8321. At
December 31 2019, the end of the firm's fiscal
year, the spot rate was $.9483 and the future rate
for kronas to be sold on January 30, 2020, was
$.9948. On January 30, 2020, the spot rate was
$.9830.
Required: Prepare all necessary journal entries
in regard to the forward contract.
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