Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260110579
Author: Hoyle
Publisher: McGraw Hill Education
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Chapter 2, Problem 27P
To determine
Prepare an acquisition-date consolidated balance sheet for C Corporation and its subsidiary K Corporation.
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On January 1, 2021, Casey Corporation exchanged $3,210,000 cash for 100 percent of the outstanding voting stock of Kennedy Corporation. Casey plans to maintain Kennedy as a wholly owned subsidiary with separate legal status and accounting information systems.
At the acquisition date, Casey prepared the following fair-value allocation schedule:
Fair value of Kennedy (consideration transferred)
$
3,210,000
Carrying amount acquired
2,600,000
Excess fair value
$
610,000
to buildings (undervalued)
$
393,000
to licensing agreements (overvalued)
(193,000
)
200,000
to goodwill (indefinite life)
$
410,000
Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from their separate financial records (credit balances in parentheses).
Accounts
Casey
Kennedy
Cash
$
480,000
$
166,500
Accounts receivable
1,420,000
295,000
Inventory…
On January 1, 2021, Casey Corporation exchanged $3,300,000 cash for 100 percent of the outstanding voting stock of Kennedy Corporation. Casey plans to maintain Kennedy as a wholly owned subsidiary with separate legal status and accounting information systems.
At the acquisition date, Casey prepared the following fair-value allocation schedule:
Fair value of Kennedy (consideration transferred)
$
3,300,000
Carrying amount acquired
2,600,000
Excess fair value
$
700,000
to buildings (undervalued)
$
382,000
to licensing agreements (overvalued)
(108,000
)
274,000
to goodwill (indefinite life)
$
426,000
Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from their separate financial records (credit balances in parentheses).
Accounts
Casey
Kennedy
Cash
$
457,000
$
172,500
Accounts receivable
1,655,000…
On January 1, 2018 Casey Corporation exchanged $3,210,000 cash for 100 percent of the outstanding voting stock of Kennedy
Corporation. Casey plans to maintain Kennedy as a wholly owned subsidiary with separate legal status and accounting information
systems.
At the acquisition date, Casey prepared the following fair-value allocation schedule:
Fair value of Kennedy (consideration transferred)
Carrying amount acquired
Excess fair value
to buildings (undervalued)
to licensing agreements (overvalued)
to goodwill (indefinite life)
Accounts
Cash
Accounts receivable
Inventory
Investment in Kennedy
Buildings (net)
Licensing agreements
Goodwill
Total assets
Accounts payable
Long-term debt
Common stock
Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from their
separate financial records.
Additional paid-in capital
Retained earnings
Total liabilities and equities
$
Casey
480,000
1,420,000
1,490,000
3,210,000
5,992,500
0
$ 393,000…
Chapter 2 Solutions
Soft Bound Version for Advanced Accounting 13th Edition
Ch. 2 - Prob. 1QCh. 2 - Prob. 2QCh. 2 - What does the term consolidated financial...Ch. 2 - Within the consolidation process, what is the...Ch. 2 - Prob. 5QCh. 2 - Prob. 6QCh. 2 - Prob. 7QCh. 2 - Prob. 8QCh. 2 - Prob. 9QCh. 2 - Prob. 10Q
Ch. 2 - Prob. 11QCh. 2 - Which of the following does not represent a...Ch. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4PCh. 2 - Prob. 5PCh. 2 - An acquired entity has a long-term operating lease...Ch. 2 - When does gain recognition accompany a business...Ch. 2 - Prob. 8PCh. 2 - Prob. 9PCh. 2 - Prob. 10PCh. 2 - On June 1, Cline Co. paid 800,000 cash for all of...Ch. 2 - On May 1, Donovan Company reported the following...Ch. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - Prob. 15PCh. 2 - Prob. 16PCh. 2 - On its acquisition-date consolidated balance...Ch. 2 - On its acquisition-date consolidated balance...Ch. 2 - Problems 19 and 20 are based on the following...Ch. 2 - In the December 31, 2017, consolidated balance...Ch. 2 - Prob. 21PCh. 2 - The following book and fair values were available...Ch. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 27PCh. 2 - Prob. 28PCh. 2 - Prob. 29PCh. 2 - Prob. 30PCh. 2 - Prob. 31PCh. 2 - SafeData Corporation has the following account...Ch. 2 - Prob. 33PCh. 2 - Prob. 34PCh. 2 - Prob. 35APACh. 2 - On February 1, Piscina Corporation completed a...Ch. 2 - Prob. 37APBCh. 2 - Prob. 38APBCh. 2 - Prob. 1DYSCh. 2 - Prob. 2DYSCh. 2 - Prob. 3DYSCh. 2 - Prob. 4DYS
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