Ridge Road Company acquired 25 percent

On January 1, 2023, Ridge Road Company acquired 30 percent of the voting shares of Sauk Trail, Incorporated, for $4,500,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail's board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail's board, which gave it the ability to significantly influence Sauk Trail's operating and investing activities. The January 1, 2023, carrying amounts and corresponding fair values for Sauk Trail's assets and liabilities follow: Carrying Amount $ 200,000 5,810,000 Fair Value $ 200,000 7,140,000 4,180,000 2,180,000 (275,000) Assets and Liabilities Cash and Receivables Computing Equipment Patented Technology Trademark Liabilities Also, as of January 1, 2023, Sauk Trail's computing equipment had a seven-year remaining estimated useful life. The patented…

On January 1, 2020, Ridge Road Company acquired 25 percent of the voting shares of Sauk Trail, Inc., for $4,300,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail’s board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail’s board, which gave it the ability to significantly influence Sauk Trail’s operating and investing activities.   The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail’s assets and liabilities follow:     Carrying Amount Fair Value Cash and receivables $ 190,000   $ 190,000   Computing equipment   5,720,000     6,980,000   Patented technology   180,000     4,160,000   Trademark   230,000     2,160,000   Liabilities   (265,000 )   (265,000 )     Also, as of January 1, 2020, Sauk Trail’s computing equipment had a…

On January 1, 2020, Ridge Road Company acquired 25 percent of the voting shares of Sauk Trail, Inc., for $3,500,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail's board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail's board, which gave it the ability to significantly influence Sauk Trail's operating and investing activities. The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail's assets and liabilities follow: Cash and receivables Computing equipment Patented technology Trademark Liabilities 2020 2021 Also, as of January 1, 2020, Sauk Trail's computing equipment had a seven-year remaining estimated useful life. The patented technology was estimated to have a four-year remaining useful life. The trademark's useful life was considered…

On January 1, 2020, Ridge Road Company acquired 25 percent of the voting shares of Sauk Trail, Inc., for $3,700,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail’s board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail’s board, which gave it the ability to significantly influence Sauk Trail’s operating and investing activities.   The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail’s assets and liabilities follow:     Carrying Amount Fair Value Cash and receivables $ 160,000   $ 160,000   Computing equipment   5,450,000     6,500,000   Patented technology   150,000     4,100,000   Trademark   200,000     2,100,000   Liabilities   (235,000 )   (235,000 )     Also, as of January 1, 2020, Sauk Trail’s computing equipment had a…

On January 1, 2020, Ridge Road Company acquired 30 percent of the voting shares of Sauk Trail, Inc., for $4,400,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail’s board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail’s board, which gave it the ability to significantly influence Sauk Trail’s operating and investing activities.   The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail’s assets and liabilities follow:     Carrying Amount Fair Value Cash and receivables $ 195,000   $ 195,000   Computing equipment   5,765,000     7,060,000   Patented technology   185,000     4,170,000   Trademark   235,000     2,170,000   Liabilities   (270,000 )   (270,000 )     Also, as of January 1, 2020, Sauk Trail’s computing equipment had a…

On January 1, 2020, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc., for $2,700,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail's board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail's board, which gave it the ability to significantly influence Sauk Trail's operating and investing activities. The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail's assets and liabilities follow: Cash and Receivables Computing Equipment Patented Technology Trademark Liabilities 2020 2021 Carrying Amount $ 110,000 5,000,000 100,000 150,000 (185,000) Net Income $1,800,000 1,985,000 Also, as of January 1, 2020. Sauk Trail's computing equipment had a seven-year remaining estimated useful life. The patented technology was…

On January 1, 2017, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc., for $3,400,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail's board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail's board which gave it the ability to significantly influence Sauk Trail's operating and investing activities.   The January 1, 2017, carrying amounts and corresponding fair values for Sauk Trail's assets and liabilities follow:     Carrying Amount Fair Value Cash and receivables $ 145,000   $ 145,000   Computing equipment   5,315,000     6,260,000   Patented technology   135,000     4,070,000   Trademark   185,000     2,070,000   Liabilities   (220,000 )   (220,000 )   Also as of January 1, 2017, Sauk Trail's computing equipment had a…

On 1 July 2020, Lada Ltd (LL) acquired a 20 per cent interest in Hupmobile Ltd (HL) for a cash consideration of $40,000. Despite its small shareholding in HL, LL is considered to have significant influence over HL, since LL is able to appoint a director to HL’s Board of Directors, and HL is a major customer of LL. LL also provides management personnel to HL, and the two companies share technical information. On the date of the acquisition, the assets of HL were reported at fair value. The share capital and reserves of HL at the date of acquisition were: Share capital 50,000 Retained earnings 140,000 Total shareholders’ equity $190,000 Additional information For the year ending 30 June 2021, HL recorded an after-tax profit of $100,000, from which it paid a dividend of $50,000. For the year ending 30 June 2022, HL recorded an after-tax profit of $80,000, from which it paid a dividend of $60,000. On 30 June 2022, HL revalued its Land upwards by $10,000. Before this revaluation, the Land…

On January 1, 2024, Cullumber Company, a public company, purchased 40% of the common shares of Triple Titanium Inc. for $575,000. The remaining shares (60%) are held by the family members of the company's founder. Cullumber considers this a strategic investment and a critical step into developing consumer markets. Triple Titanium is currently a supplier to Cullumber. Cullumber placed two members on Triple Titanium's 10-person board of directors and the two members believe they have been influential on the board through the year. Cullumber and Triple Titanium both have December 31 year ends. During 2024, Triple Titanium reported profit of $240,000 and paid total dividends of $60,000. (b) Prepare the following journal entries for Cullumber, assuming significant influence does exist. (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. List all…

Kk.3. Subject  :- Account

The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020. In addition, E&B ComicBookstore Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below), 5% cumulative preferred stock. They have asked each student from your accounting course to prepare the company’s journal entries Exchanged 50% of authorised shares  shares of class A common stock for Office Furniture and Equipment with an appraised value of $$ 4,000,000.00 and Motor Truck with an appraised value of $ 10,000,000.00.

The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020. In addition, E&B ComicBookstore Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below), 5% cumulative preferred stock. They have asked each student from your accounting course to prepare the company’s journal entries   Issued 40% of authorised shares shares of preferred stock at par value of $ 110.00

The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020. In addition, E&B ComicBookstore Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below), 5% cumulative preferred stock. They have asked each student from your accounting course to prepare the company’s journal entries  Earned Net income $1,800,000.00.

The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020. In addition, E&B ComicBookstore Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below), 5% cumulative preferred stock. They have asked each student from your JOURNAL ENTRY FOR Issued 20% of authorised shares shares of class A common stock. Stock has par value $30 of  per share and was issued at $40.00  per share.

In 2021, Google, a company that specializes in internet-related service, acquired Fitbit, the fitness tracking company, to bolster its wearable capabilities. Google paid shareholders $7.25 per share in cash. This is an example of which of the following?   Group of answer choices horizontal acquisition conglomerate acquisition vertical acquisition merger

Danial Bhd is a mini-conglomerate with many divisions including manufacturing, construction and retailing. In 2019, the company was involved in several transactions related to the acquisition of property, plant and equipment in order to diversify its operation. On 1 January 2019, the company purchased a land with an old building for the purpose of self-constructed a new building as a factory by a construction division. The price of the land and old building were RM800,000 and RM100,000, respectively. Additional expenditure incurred in relation to the purchase of land and construction of new factory were as follows: In addition, Danial Bhd has an old equipment. However, this old equipment cannot be used in a new factory since a new factory is highly automated. Therefore, on 1 August 2019, Danial Bhd decided to exchange its old equipment plus cash for a new equipment from another company. The old equipment was bought on 31 July 2015 for RM150,000. The old equipment has useful life of 10…

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You have recently become the controller of Pair Corporation, a manufacturing enterprise that has begun a program of expansion through business combinations. On February 1, 2020, two weeks prior to your controllership appointment, Pair had completed the acquisition of 85% of the outstanding common stock of Sole Company for $225,000 cash, including out-of-pocket costs. You are engaged in a discussion with Pair's chief accountant concerning the appropriate accounting method for Pair's interest in Sole Company's operating results. The chief accountant strongly supports the accounting, offering the following arguments: cost method of 3. A parent company recognizes revenue under the cost method only when the subsidiary declares dividends. Such dividend revenue is consistent with the revenue realization principle of financial accounting. The Investment Income account recorded in the equity method of accounting does not fit the definition of realized revenue. 4. Use of the equity method of…

The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding theirdecision-making process. They assume that the company will be formed on January 1, 2020. In addition, E&B ComicBookstore Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below),5% cumulative preferred stock.  Issued 30% of authorized shares of class A common stock. Stock has par value of $20.00 per share and was issued at $ 28.00 per share. Issued 30% shares of no par class B stock. Issued 50% share of preferred stock at par stock value. Exchange 40% shares of class A common stock for Office Furniture and Equipment with an appraised value of $ 4,000,000.00 and Motor Truck with an appraised value of $10,000,000.00. Earned Net income is $1,500,000. Declared interim dividends for preferred shareholders…

The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding theirdecision-making process. They assume that the company will be formed on January 1, 2020. In addition, E&B ComicBookstore Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below),5% cumulative preferred stock.  Issued 30% of authorized shares of class A common stock. Stock has par value of $20.00 per share and was issued at $ 28.00 per share. Issued 30% shares of no par class B stock. Issued 50% share of preferred stock at par stock value. Exchange 40% shares of class A common stock for Office Furniture and Equipment with an appraised value of $ 4,000,000.00 and Motor Truck with an appraised value of $10,000,000.00. Earned Net income is $1,500,000. Prepare the company’s Stockholders equity section of…

CONVEX Ltd. is a new company that was established on 1st January, 2020 to oversee the production of coronavirus vaccines for Ghana. On 1st July, 2020, CONVEX Ltd. acquired 75% shares in CONCAVE Ltd., a pharmaceutical company, to speed up the vaccine production. As a new graduate from UGBS, CONVEX Ltd. has employed you as their accountant. At a management meeting held, a number of issues were raised about how CONVEX Ltd. should deal with its transactions and investment in CONCAVE Ltd. and the need to conduct financial ratio analysis to determine the profitability and sustainability of CONCAVE Ltd. In a memo to management, provide your views on how the following issues should be addressed. Issue  Assuming there is the need for CONVEX Ltd. to prepare consolidated financial statements and CONCAVE Ltd. has presented its separate financial statement to CONVEX Ltd., comment on how the following transactions between CONVEX Ltd. and CONCAVE Ltd. will be accounted for in the consolidated…

CONVEX Ltd. is a new company that was established on 1st January, 2020 to oversee the production of coronavirus vaccines for Ghana. On 1st July, 2020, CONVEX Ltd. acquired 75% shares in CONCAVE Ltd., a pharmaceutical company, to speed up the vaccine production. As a new graduate from UGBS, CONVEX Ltd. has employed you as their accountant. At a management meeting held, a number of issues were raised about how CONVEX Ltd. should deal with its transactions and investment in CONCAVE Ltd. and the need to conduct financial ratio analysis to determine the profitability and sustainability of CONCAVE Ltd. In a memo to management, provide your views on how the following issues should be addressed. Issue CCONVEX Ltd. is planning to sell 30% of their shares to another company who wants to support local production of the vaccine. How will this transaction affects the preparation of CONVEX Ltd.financial statements for the next accounting period?  Issue DAssuming you have done the financial ratio…

CONVEX Ltd. is a new company that was established on 1st January, 2020 to oversee the production of coronavirus vaccines for Ghana. On 1st July, 2020, CONVEX Ltd. acquired 75% shares in CONCAVE Ltd., a pharmaceutical company, to speed up the vaccine production. As a new graduate from UGBS, CONVEX Ltd. has employed you as their accountant. At a management meeting held, a number of issues were raised about how CONVEX Ltd. should deal with its transactions and investment in CONCAVE Ltd. and the need to conduct financial ratio analysis to determine the profitability and sustainability of CONCAVE Ltd. In a memo to management, provide your views on how the following issues should be addressed.   Issue A At the meeting, executive members could not agree on whether CONVEX Ltd. should prepare and present both separate and consolidated financial statements. Some of the executive members raised issues that CONVEX Ltd. does not need to prepare consolidated financial statements because it is simply…

CONVEX Ltd. is a new company that was established on 1st January, 2020 to oversee the production of coronavirus vaccines for Ghana. On 1st July, 2020, CONVEX Ltd. acquired 75% shares in CONCAVE Ltd., a pharmaceutical company, to speed up the vaccine production. As a new graduate from UGBS, CONVEX Ltd. has employed you as their accountant. At a management meeting held, a number of issues were raised about how CONVEX Ltd. should deal with its transactions and investment in CONCAVE Ltd. and the need to conduct financial ratio analysis to determine the profitability and sustainability of CONCAVE Ltd. In a memo to management, provide your views on how the following issues should be addressed. Issue AAt the meeting, executive members could not agree on whether CONVEX Ltd. should prepare and present both separate and consolidated financial statements. Some of the executive members raised issues that CONVEX Ltd. does not need to prepare consolidated financial statements because it is simply an…

CONVEX Ltd. is a new company that was established on 1st January, 2020 to oversee the production of coronavirus vaccines for Ghana. On 1st July, 2020, CONVEX Ltd. acquired 75% shares in CONCAVE Ltd., a pharmaceutical company, to speed up the vaccine production. As a new graduate from UGBS, CONVEX Ltd. has employed you as their accountant. At a management meeting held, a number of issues were raised about how CONVEX Ltd. should deal with its transactions and investment in CONCAVE Ltd. and the need to conduct financial ratio analysis to determine the profitability and sustainability of CONCAVE Ltd. In a memo to management, provide your views on how the following issues should be addressed. Issue CCONVEX Ltd. is planning to sell 30% of their shares to another company who wants to support local production of the vaccine. How will this transaction affects the preparation of CONVEX Ltd. financial statements for the next accounting period?

CONVEX Ltd. is a new company that was established on 1st January, 2020 to oversee the production of coronavirus vaccines for Ghana. On 1st July, 2020, CONVEX Ltd. acquired 75% shares in CONCAVE Ltd., a pharmaceutical company, to speed up the vaccine production. As a new graduate from UGBS, CONVEX Ltd. has employed you as their accountant. At a management meeting held, a number of issues were raised about how CONVEX Ltd. should deal with its transactions and investment in CONCAVE Ltd. and the need to conduct financial ratio analysis to determine the profitability and sustainability of CONCAVE Ltd. In a memo to management, provide your views on how the following issues should be addressed. Assuming you have done the financial ratio analysis and you have realized that profitability is looking good but liquidity is not impressive and needs urgent attention. What do you think could be the problem with CONCAVE Ltd. that your company needs to help them address?

CONVEX Ltd. is a new company that was established on 1st January, 2020 to oversee the production of coronavirus vaccines for Ghana. On 1st July, 2020, CONVEX Ltd. acquired 75% shares in CONCAVE Ltd., a pharmaceutical company, to speed up the vaccine production. As a new graduate from UGBS, CONVEX Ltd. has employed you as their accountant. At a management meeting held, a number of issues were raised about how CONVEX Ltd. should deal with its transactions and investment in CONCAVE Ltd. and the need to conduct financial ratio analysis to determine the profitability and sustainability of CONCAVE Ltd. In a memo to management, provide your views on how the following issues should be addressed. ISSUE Assuming there is the need for CONVEX Ltd. to prepare consolidated financial statements and CONCAVE Ltd. has presented its separate financial statement to CONVEX Ltd., comment on how the following transactions between CONVEX Ltd. and CONCAVE Ltd. will be accounted for in the consolidated…

CONVEX Ltd. is a new company that was established on 1st January, 2020 to oversee the production of coronavirus vaccines for Ghana. On 1st July, 2020, CONVEX Ltd. acquired 75% shares in CONCAVE Ltd., a pharmaceutical company, to speed up the vaccine production. As a new graduate from UGBS, CONVEX Ltd. has employed you as their accountant. At a management meeting held, a number of issues were raised about how CONVEX Ltd. should deal with its transactions and investment in CONCAVE Ltd. and the need to conduct financial ratio analysis to determine the profitability and sustainability of CONCAVE Ltd. In a memo to management, provide your views on how the following issues should be addressed. Issue  Assuming there is the need for CONVEX Ltd. to prepare consolidated financial statements and CONCAVE Ltd. has presented its separate financial statement to CONVEX Ltd., comment on how the following transactions between CONVEX Ltd. and CONCAVE Ltd. will be accounted for in the consolidated…

CONVEX Ltd. is a new company that was established on 1st January, 2020 to oversee the production of coronavirus vaccines for Ghana. On 1st July, 2020, CONVEX Ltd. acquired 75% shares in CONCAVE Ltd., a pharmaceutical company, to speed up the vaccine production. As a new graduate from UGBS, CONVEX Ltd. has employed you as their accountant. At a management meeting held, a number of issues were raised about how CONVEX Ltd. should deal with its transactions and investment in CONCAVE Ltd. and the need to conduct financial ratio analysis to determine the profitability and sustainability of CONCAVE Ltd. In a memo to management, provide your views on how the following issues should be addressed. a. Within the year, CONVEX Ltd. sold pharmaceutical products worth GH¢8 million to CONCAVE Ltd. CONVEX Ltd. made a margin of 20% on these sales. CONCAVE Ltd. has sold 60% of these products to external parties by the end of the year.

CONVEX Ltd. is a new company that was established on 1st January, 2020 to oversee the production of coronavirus vaccines for Ghana. On 1st July, 2020, CONVEX Ltd. acquired 75% shares in CONCAVE Ltd., a pharmaceutical company, to speed up the vaccine production. As a new graduate from UGBS, CONVEX Ltd. has employed you as their accountant. At a management meeting held, a number of issues were raised about how CONVEX Ltd. should deal with its transactions and investment in CONCAVE Ltd. and the need to conduct financial ratio analysis to determine the profitability and sustainability of CONCAVE Ltd. In a memo to management, provide your views on how the following issues should be addressed. Issue B Assuming there is the need for CONVEX Ltd. to prepare consolidated financial statements and CONCAVE Ltd. has presented its separate financial statement to CONVEX Ltd., comment on how the following transactions between CONVEX Ltd. and CONCAVE Ltd. will be accounted for in the consolidated…

VMware, Inc. is a subsidiary of Dell Technologies Inc.. providing customers with IT resource management. In fiscal 2020, VMware acquired Avi Networks, Inc., a provider of multi- cloud application delivery services, for $335 million. This price reflected goodwill of $228 million and identifiable intangible assets of $94 million. Assume that VMware paid the acquisition price in cash, and also incurred $10 million in acquisition-related legal and advisory services, paid in cash. Required a. What was the fair value of tangibile net assets, if any, that VMware recognized at the date of acquisition? Note: Provide all answers in millions, million b. Prepare the journal entry to record this business combination. Debit > > > > > Credit

The Crump Companies, Inc. has ownership interests in several public companies. At the beginning of 2021, the company’s ownership interest in the common stock of Silken Properties increased to the point that it became appropriate to begin using the equity method of accounting for the investment. The balance in the investment in equity securities account was $31 million at the time of the change. Accountants working with company records determined that the balance in an investment in equity affiliate account would have been $48 million if the equity method had been used previously.Required:1. Will Crump apply the new method retrospectively or apply the new method prospectively?2. Suppose Crump is changing from the equity method rather than to the equity method. Will Crump apply the new method retrospectively or prospectively?

Abaco is planning to acquire Cozumel Airlines, a freestanding C corporation, in the expectation that new management can be brought in to achieve substantial operating efficiencies. You have been retained to advise Abaco on how to structure the acquisition. Two graduate school friends, Monique and Denise, own Cozumel Airlines. Together, they have a $1 million basis in their Cozumel Airlines stock. Both Monique and Denise have held their Cozumel Airlines stock for several years but must sell their stock for nontax reasons. Cozumel Airlines' tax-basis balance sheet contains $14 million of assets, no liabilities, and no net operating loss carry-overs. All parties agree that Cozumel Airlines would be worth $20 million to Abaco with no step-up in Cozumel's inside (asset) basis, but $21.25 million if its inside (asset) basis was stepped up to fair market value. Monique and Denise each face a 40% tax rate on ordinary income and a 20% tax rate on capital gains.The corporate tax rate is 35%.…