Soft Bound Version for Advanced Accounting 13th Edition
Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260110579
Author: Hoyle
Publisher: McGraw Hill Education
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Chapter 3, Problem 37P

a.

To determine

Show how Company P derived its December 31, 2018, Investment in Company G account balance.

b.

To determine

Explain the treatment of the acquired in-process research and development.

c.

To determine

Prepare a consolidated worksheet for both companies as of December 31, 2018.

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Woolco, Inc., purchased all the outstanding stock of Paint, Inc., for $980,000. Woolco also paid $10,000 in direct acquisition costs. Just before the investment, the two companies had the following balance sheets: Assets                                             Woolco, Inc.            Paint, Inc. Accounts receivable . . . . . . . . . . . . . . . $ 900,000                   $ 500,000 Inventory . . . . . . . . . . . . . . . . . . . . . . . .      600,000                      200,000 Depreciable fixed assets (net) . . . . . . . . 1,500,000                   600,000 Total assets. . . . . . . . . . . . . . . . . . . . .         $3,000,000             $1,300,000 Liabilities and Equity Current liabilities . . . . . . . . . . . . . . . . . .      $ 950,000              $ 400,000 Bonds payable . . . . . . . . . . . . . . . . . . .           500,000                 200,000 Common stock ($10 par). . . . . . . . . . . .        400,000                300,000 Paid-in capital in excess of par . .…
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Bar Corporation has been looking to expand its operations and has decided to acquire the assets of Vicker Company and Kendal Company. Bar will issue 30,000 shares of its $10 par common stock to acquire the net assets of Vicker Company and will issue 15,000 shares to acquire the net assets of Kendal Company.Vicker and Kendal have the following balance sheets as of December 31, 2015:Assets                                              Vicker                     KendalAccounts receivable . . . . . . . . . . . . . . . . . $ 200,000               $ 80,000Inventory . . . . . . . . . . . . . . . . . . . . . . . .  . . . 150,000                    85,000Property, plant, and equipment:Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000                    50,000Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .500,000                  300,000Accumulated depreciation. . . . . . . . .. . . (150,000)                 (110,000)Total assets . . . . . . . . . .…

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Soft Bound Version for Advanced Accounting 13th Edition

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