Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 4, Problem 4.11P
To determine
Business combination:
Business combination refers tothe combining of one or more business organizations in a single entity. The business combination leads to the formation of combined financial statements. After business combination, the entities having separate control merges into one having control over all the assets and liabilities. Merging and acquisition are types of business combinations.
Consolidated financial statements:
The consolidated financial statements refer to the combined financial statements of the entities which are prepared at the year-end. The consolidated financial statements are prepared when one organization is either acquired by the other entity or two organizations merged to form the new entity.The consolidated financial statements serve the purpose of both the entities about financial information.
Value analysis:
The value analysis in a business combination is an essential part of determining the worth of the acquired entity. The
:
To prepare:Consolidated worksheet for Company A and Company Tfor the year ended December 31, 2016 along with the determination and distribution of excess schedule.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
On July 15, 2016, Cottonwood Industries sold a patent and equipment to Roquemore Corporation for $750,000 and $325,000, respectively. The book value of the patent and equipment on the date of sale were $120,000 and $400,000 (cost of $550,000 less accumulated depreciation of $150,000), respectively. Required: Prepare the journal entries to record the sales of the patent and equipment
In January 1, 2015, Fun company purchased Company A for $40,000 in cash and paid immediately. Fun company assumed all of Company A's assets and assumed Company A's liabilities. company A has assets valued at $60,000 and liabilities valued at $50,000.
question:suppose fun company estimates that company A will only be useful to them for 10 years. What is the annual amortization expense for the goodwill of company Z?
ustration: Assume that during 2017 Acro Energy Inc. has
income before income taxes of $800,000. During 2017, Acro
discontinued and sold its unprofitable chemical division. The
loss in 2017 from chemical operations (net of $60,000 taxes)
was $140,000. The loss on disposal of the chemical division
(net of $30,000 taxes) was $70,000. Assuming a 30% tax rate
on income.
Prepare Acro's statement of comprehensive income for the
year ended December 31, 2017.
Chapter 4 Solutions
Advanced Accounting
Ch. 4 - Prob. 1UTICh. 4 - Prob. 2UTICh. 4 - Prob. 3UTICh. 4 - Prob. 4UTICh. 4 - Prob. 5UTICh. 4 - Prob. 6UTICh. 4 - Sorel is an 80%-owned subsidiary of Pattern...Ch. 4 - Hide Corporation is a wholly owned subsidiary of...Ch. 4 - Prob. 2.2ECh. 4 - Prob. 3E
Ch. 4 - On January 1, 2016, Jungle Company sold a machine...Ch. 4 - Prob. 4.2ECh. 4 - Prob. 4.3ECh. 4 - Prob. 5.1ECh. 4 - Prob. 5.2ECh. 4 - Prob. 6ECh. 4 - Prob. 7ECh. 4 - Prob. 8ECh. 4 - Prob. 9.1ECh. 4 - Prob. 9.2ECh. 4 - Prob. 10.1ECh. 4 - Prob. 10.2ECh. 4 - Prob. 4.1PCh. 4 - Prob. 4.2.1PCh. 4 - Prob. 4.2.2PCh. 4 - Prob. 4.3.1PCh. 4 - Prob. 4.3.2PCh. 4 - Prob. 4.4.1PCh. 4 - Prob. 4.4.2PCh. 4 - Prob. 4.7.1PCh. 4 - Prob. 4.7.2PCh. 4 - Prob. 4.8.1PCh. 4 - Prob. 4.8.2PCh. 4 - OnJanuary 1, 2015, Peanut Company acquired 80% of...Ch. 4 - Prob. 4.11PCh. 4 - Prob. 4.13.1PCh. 4 - Prob. 4.13.2PCh. 4 - Prob. 4.14.1PCh. 4 - Prob. 4.14.2PCh. 4 - Prob. 4A.1APCh. 4 - Prob. 4A.2APCh. 4 - Prob. 4.1.1C
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received $12,000,000 in net assets. In 2016, the market value of the goodwill obtained from Branta Corp. was valued at $4,000,000, but in 2017 it dropped to $2,000,000. Prepare the journal entry for the creation of goodwill and the entry to record any impairments to it in subsequent years.arrow_forwardOn December 31, 2016, the end of the fiscal year, California Microtech Corporation completed the sale of its semiconductor business for $10 million. The business segment qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $8 million. The loss from operations of the segment during 2016 was $3.6 million. Pretax income from continuing operations for the year totaled $5.8 million. The income tax rate is 30%. Prepare the lower portion of the 2016 income statement beginning with pretax income from continuing operations. Ignore EPS disclosures.arrow_forwardPop Corporation paid $3,600,000 for a 90 percent interest in Son Corporation on January 1, 2016; Son's total book value was $3,600,000. The excess was allocated as follows: $120,000 to undervalued equipment with a three-year remaining useful life and $280,000 to goodwill. The income statements of Pop and Son for 2016 are summarized as follows (in thousands): Sales Income from Son Cost of sales Depreciation expense Other expenses Net income Pop $8,000 360 (4,000) (800) (1.600) $ 1,960 Show Transcribed Text Son $3,200 (1,600) (480) (720) $ 400 1. Calculate the goodwill that should appear in the consolidated balance sheet of Pop and Subsidiary at December 31, 2016. 2. Calculate consolidated net income for 2016.arrow_forward
- 4. Enron Company decided on August 1, 2011 to dispose of a component of its business. The component was sold on November 30, 2011. Enron's income for 2011 included income of P5,000,000 from operating the discontinued segment from January 1 to the sale date. Enron incurred a loss on the November 30 sale of P4,500,000. Ignoring income tax, what amount should be reported in the 2011 income statement as income or loss under "discontinued operation"? O a. 4,500,000 loss O b. 5,000,000 income O c. 500,000 loss O d. 500,000 incomearrow_forwardThompson owns 100% of Rollins and at December 31, 2012, its Investment in Rollins account stands at $10,000,000. On that date, Thompson sells 20% of its ownership for $2,500,000 cash. a. Prepare the journal entry to.be recorded by Thompson on December 31, 2012. b. Same facts as above, except the sales price is $1,000,000 cash. Prepare the journal entry to be recorded by Thompson on December 31, 2012.arrow_forward19) Plock Corporation, the 75% owner of Seraphim Company, reported net income of $400,000 in 2011, prior to recording any income from Seraphim. Seraphim reported net income for that same year of $80,000 on their stand-alone statements. During 2011, an intercompany sale of a vehicle resulted in a gain of $4,000, and the vehicle was assumed to have a four- year remaining useful life. The vehicle has no salvage value. Straight-line depreciation is used. Required: 1. Assuming that the vehicle transfer was downstream, calculate Plock's consolidated net income for 2011, and controlling share of consolidated net income for 2011. 2. Assuming that the vehicle transfer was upstream, calculate Plock'arrow_forward
- (Income Statement, Irregular Items) Wade Corp. has 150,000 shares of common stock outstanding. In 2017, the company reports income from continuing operations before income tax of $1,210,000. Additional transactions not considered in the $1,210,000 are as follows.1. In 2017, Wade Corp. sold equipment for $40,000. The machine had originally cost $80,000 and had accumulated depreciation of $30,000. The gain or loss is considered non-recurring.2. The company discontinued operations of one of its subsidiaries during the current year at a loss of $190,000 before taxes. Assume that this transaction meets the criteria for discontinued operations. The loss from operations of the discontinued subsidiary was $90,000 before taxes; the loss from disposal of the subsidiary was $100,000 before taxes.3. An internal audit discovered that amortization of intangible assets was understated by $35,000 (net of tax) in a prior period. The amount was charged against retained earnings.4. The company recorded a…arrow_forwardDuring 2015, X company (the 90%-owned subsidiary) sold merchandise to Y Company (the subsidiary) at a selling price of $40,000, the cost of goods sold was $60,000. In 2016, Y Company sold the merchandise at $70,000. Net income for Y Company for 2015 and 2016 respectively: $120,000; $140,000. There is no dividend. Instructions: Calculate the Parent company from the subsidiary’s net income? Calculate the Minority interest from the subsidiary’s net income? Prepare the working paper in Journal entries format for 2015 and 2016?arrow_forwardOn December 31, 2017 (A) paid JD150000 for 80% of (B) with a goodwill of JD30000 as a result. You have given the following data: a. (A) earned net operating income of 100000 and declared dividends of 40000. b. (B) earned net operating income of 50000 and declared dividends of 30000. c. The goodwill is impaired by 10% each year.arrow_forward
- Finley Corporation had income from continuing operations of $10,600,000 in 2017. During 2017, it disposed of its restaurant division at an after-tax loss of $189,000. Prior to disposal, the division operated at a loss of $315,000 (net of tax) in 2017 (assume that the disposal of the restaurant division meets the criteria for recognition as a discontinued operation). Finley had 10,000,000 shares of common stock outstanding during 2017. Prepare a partial income statement for Finley beginning with income from continuing operations.arrow_forwardAbra Ltd sold an item of plant to its subsidiary Cadabra Ltd on 1 January 2017 for $50 000. The asset had cost Abra Ltd $60 000 when acquired on 1 January 2015. At that time the useful life of the plant was assessed at 6 years. Rounded to the nearest dollar, the consolidation elimination entries at 30 June 2017 in relation to the sale of plant are which of the following? a. Plant Dr 10 000 Gain on sale Dr 10 000 Accumulated depreciation Cr 20 000 Deferred tax asset Dr 3 000 Income tax expense Cr 3 000 Accumulated depreciation Dr 1 250 Depreciation expense Cr 1 250 Income tax expense Dr 375 Deferred tax asset Cr 375 b. Accumulated depreciation Dr 10 000 Gain on sale Dr 10 000 Plant Cr 20 000 Deferred tax asset Dr 3 000 Income tax expense Cr 3…arrow_forwardDuring 2015, Company P sold $50,000 of goods to subsidiary Company S at a profit of $12,000. One-fourth of the goods remain unsold at year-end. What specific adjustments are needed on the consolidated worksheet to deal with these issues?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Financial instruments products; Author: fi-compass;https://www.youtube.com/watch?v=gvxozM3TUIg;License: Standard Youtube License