Screenshot 2024-02-08 at 2

On December 31, 20X8, Paragraph Corporation acquired 80 percent of Sentence Company's common stock for $136,000. At the acquisition date, the book values and fair values of all of Sentence's assets and liabilities were equal. Paragraph uses the equity method in accounting for its investment. Balance sheet information provided by the companies at December 31, 20X8, immediately following the acquisition is as follows: Cash Accounts Receivable Inventory Fixed Assets (net) Investment in Sentence Co. Total Debits Accounts Payable Notes Payable Common Stock Retained Earnings Total Credits Assets Paragraph Corporation $ 74,000 120,000 180,000 Total Assets Liabilities and Stockholders' Equity 350,000 136,000 $860,000 Total Liabilities and Stockholders' Equity $ 65,000 350,000 150,000 295,000 $860,000 PARAGRAPH CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X8 Required: Prepare a consolidated balance sheet for Paragraph at December 31, 20X8. Sentence Company $ 20,000…

On January 1, 20X1, Par Inc acquires 85.77% of Sub Corp for $211,625 in cash. Immediately before the acquisition, the book value of Sub's identifiable net assets was $143,426 with a fair value of $161,060, while the book value of Par's net assets was $282,155. What will be the amount of total shareholders' equity on the consolidated balance sheet immediately after the acquisition if the fair-value-enterprise (FVE) method is used? $309,334 b. $333,129 c. $301,402 d. $317,265 e. $325,197

Pretzel Corporation acquired 100 percent of Stick Company’s outstanding shares on January 1, 20X7. Balance sheet data for the two companies immediately after the purchase follow:     As indicated in the parent company balance sheet, Pretzel purchased $59,000 of Stick’s bonds from the subsidiary at par value immediately after it acquired the stock. An analysis of intercompany receivables and payables also indicates that the subsidiary owes the parent $8,000. On the date of combination, the book values and fair values of Stick’s assets and liabilities were the same.   Record the basic consolidation entry

Phone Corporation owns 80 percent of Smart Company’s common stock, acquired at underlying book value on January 1, 20X4. At the acquisition date, the book values and fair values of Smart’s assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 20 percent of the total book value of Smart. The income statements for Phone and Smart for 20X4 include the following amounts:   Phone Corporation Smart Company Sales $ 538,000 $ 167,000 Dividend Income 8,000   Total Income $ 546,000 $ 167,000 Less:     Cost of Goods Sold $ 378,000 $ 87,000 Depreciation Expense 27,000 15,000 Other Expenses 65,000 18,000 Total Expenses $ 470,000 $ 120,000 Net Income $ 76,000 $ 47,000 Phone uses the cost method in accounting for its ownership of Smart. Smart paid dividends of $10,000 in 20X4. Required: What amount would Phone report in its income statement as income from its investment in Smart if Phone used equity-method accounting? What…

On July 1, 20X1, Pushway Corporation issued 100,000 shares of common stock in exchange for all of Stroker Company’s common stock. The Pushway stock issued had a market value of $500,000 on the date of the exchange. Following are the July 1, 20X1, pre-acquisition balance sheets of Pushway and Stroker, plus fair value information for Stroker’s assets and liabilities.     Stroker   Pushway Book Value Fair Value Assets                   Current assets $ 300,000   $ 100,000   $ 100,000   Long-term assets   600,000     400,000     470,000   Total assets $ 900,000   $ 500,000   $ 570,000   Liabilities                   Current liabilities $ 200,000   $ 50,000   $ 50,000   Long-term liabilities   250,000     100,000     120,000   Total liabilities   450,000     150,000   $ 170,000   Stockholders' equity                   Common stock   300,000     250,000         Retained earnings   150,000     100,000         Total stockholders' equity   450,000     350,000…

On July 1, 20X1, Pushway Corporation issued 100,000 shares of common stock in exchange for all of Stroker Company’s common stock. The Pushway stock issued had a market value of $500,000 on the date of the exchange. Following are the July 1, 20X1, pre-acquisition balance sheets of Pushway and Stroker, plus fair value information for Stroker’s assets and liabilities.     Stroker   Pushway Book Value Fair Value Assets                   Current assets $ 300,000   $ 100,000   $ 100,000   Long-term assets   600,000     400,000     470,000   Total assets $ 900,000   $ 500,000   $ 570,000   Liabilities                   Current liabilities $ 200,000   $ 50,000   $ 50,000   Long-term liabilities   250,000     100,000     120,000   Total liabilities   450,000     150,000   $ 170,000   Stockholders' equity                   Common stock   300,000     250,000         Retained earnings   150,000     100,000         Total stockholders' equity   450,000     350,000…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition:   On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).     Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 -            Total Assets 610,000 230,000       Accounts payable 110,000 30,000 Bonds…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition: On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which had a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach)     Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 -        Total Assets  610,000 230,000       Accounts payable 110,000 30,000 Bonds…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition:   On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).     Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 -            Total Assets 610,000 230,000       Accounts payable 110,000 30,000 Bonds…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition:   On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).     Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 -            Total Assets  610,000 230,000       Accounts payable 110,000 30,000 Bonds…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition:           On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).             Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation -80,000 -50,000 Investment in Vaxx Corp. stock 160,000 - Total Assets 610,000 230,000       Accounts payable 110,000 30,000 Bonds payable 95,000 40,000 Common stock 200,000 40,000…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition:               On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).                 Pfizer Corporation Vaxx Corporation   Cash 60,000 20,000   Accounts receivable 80,000 30,000   Inventory 90,000 40,000   Land 100,000 40,000   Buildings and equipment 200,000 150,000   Less: Accumulated depreciation -80,000 -50,000   Investment in Vaxx Corp. stock 160,000 -   Total Assets 610,000 230,000           Accounts payable 110,000 30,000   Bonds payable 95,000 40,000…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition:   On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).     Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 -            Total Assets 610,000 230,000       Accounts payable 110,000 30,000 Bonds…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition:   On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).     Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 -            Total Assets  610,000 230,000       Accounts payable 110,000 30,000 Bonds…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition:   On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).     Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 -            Total Assets 610,000 230,000       Accounts payable 110,000 30,000 Bonds…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition:   On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).     Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 -            Total Assets  610,000 230,000       Accounts payable 110,000 30,000 Bonds…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition:   On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).     Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 -            Total Assets 610,000 230,000       Accounts payable 110,000 30,000 Bonds…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition:   On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).     Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 -            Total Assets 610,000 230,000       Accounts payable 110,000 30,000 Bonds…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition:   On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).     Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 -            Total Assets 610,000 230,000       Accounts payable 110,000 30,000 Bonds…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition:   On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).     Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 -            Total Assets 610,000 230,000       Accounts payable 110,000 30,000 Bonds…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition:   On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).     Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 -            Total Assets  610,000 230,000       Accounts payable 110,000 30,000 Bonds…

On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp's common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition: • On the date of the business combination, the book values of Vaxx Corp's net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).

Donut Inc. issued 20,000 common shares in exchange for all the outstanding shares of Munchkin Inc.  On acquisition date, Munchkin Inc.’s net identifiable assets have carrying amount of P4,000,000 and fair value of P2,000,000.  The transaction increased Donut Inc.’s share premium by P400,000; however, no goodwill resulted from the business combination.  How much is the acquisition-date fair value per share of the common shares issued by Donut Inc.?* a. P 100 b. P 20 c. P 40 d. P 80

On January 1, 2022, P Co acquired 75% of S Co common stock for $344,000 in cash, At the acquisition date the book values and fair values of S assets and liabilities were equal. and the fair value of the noncontrolling interest was equal to 25% of the total book value of S, The stockholders' equity accounts of the two companies at the acquisition date are: P S common stock(5@par 200,000 additional paid-in capital 80,000 retained earning 150,000 Noncontrolling interest was assigned income of $11,000 in the consolidated income statement for 2022 Select one: 500,000 O Based on the preceding information, what will be the amount of net income reported by S Co in 2022? a. 55,000 b. 44,000 c. 66,000 d. 36,000 300,000 350,000

On January 1, Tesco Company spent a total of $4,428,000 to acquire control over Blondel Company. This price was based on paying $432,000 for 20 percent of Blondel’s preferred stock and $3,996,000 for 90 percent of its outstanding common stock. At the acquisition date, the fair value of the 10 percent noncontrolling interest in Blondel’s common stock was $444,000. The fair value of the 80 percent of Blondel’s preferred shares not owned by Tesco was $1,728,000. Blondel’s stockholders’ equity accounts at January 1 were as follows: Preferred stock—9%, $100 par value, cumulative and participating; 10,000 shares outstanding $ 1,000,000 Common stock—$50 par value; 40,000 shares outstanding 2,000,000 Retained earnings 3,350,000 Total stockholders’ equity $ 6,350,000 Tesco believes that all of Blondel’s accounts approximate their fair values within the company’s financial statements. What amount of consolidated goodwill should be recognized?

X Company purchased a (100%) controlling interest in Y Company by issuing $2,000,000 worth of common shares. The business combination agreement has an earnout clause that states the following: X Company would pay 10% of any earnings in excess of $750,000 to Y's shareholders in the first year following the acquisition. On acquisition date, X's shares had a market value of $80 per share.Required:a) Assuming that Y's net income in the first year following the acquisition was $950,000, prepare any journal entries (for X Company) that are necessary to reflect Y's results under IFRS 3 Business Combinations.b) Assuming that the agreement called for Y's shareholders to be compensated with 1,250 shares for any decline in X's share price, what journal entries would be required under IFRS 3, if the market value of X's shares dropped to $64 within the year?

On 30 June 20X7, Edison Ltd acquired all the assets and liabilities of Oliver Ltd, with Oliver Ltd going into liquidation. In exchange for these assets and liabilities, Edison Ltd issued 60,000 shares, and the fair value of each share at the acquisition date is $4. Costs of issuing these shares amounted to $2,000. Legal costs associated with the acquisition of Oliver Ltd amounted to $1,500. The assets and liabilities of Oliver Ltd at 30 June 20X7 were as follows: Carrying amount Fair value Cash 12 000 12 000 Accounts receivable (Cost: $45 000, Estimated uncollectable debts: $5000) 40 000 36 000 Inventory 60 000 76 000 Plant (Cost: $200 000, Accumulated 120 000 145 000 depreciation: $80 000) Accounts payable 40 000 40 000 Additional information: • Oliver Ltd had not recorded an internally developed patent. Edison Ltd valued this at $26,000. Oliver Ltd had not recorded a legal claim as a liability due to the uncertainty of an outcome. Edison Ltd estimated the fair value of this…

On January 1, 2018, Johnsonville Enterprises, Inc., acquired 80 percent of Stayer Company’s outstanding common shares in exchange for $3,000,000 cash. The price paid for the 80 percent ownership interest was proportionately representative of the fair value of all of Stayer’s shares.At acquisition date, Stayer’s books showed assets of $4,200,000 and liabilities of $1,600,000. The recorded assets and liabilities had fair values equal to their individual book values except that a building (10-year remaining life) with book value of $195,000 had an appraised fair value of $345,000. Stayer’s books showed a $175,500 carrying amount for this building at the end of 2018.Also, at acquisition date Stayer possessed unrecorded technology processes (zero book value) with an estimated fair value of $1,000,000 and a 20-year remaining life. For 2018 Johnsonville reported net income of $650,000 (before recognition of Stayer’s income), and Stayer separately reported earnings of $350,000. During 2018,…

Pisa Company acquired 75 percent of Siena Company on January 1, 20X3, for $712,500. The fair value of the noncontrolling interest was equal to 25 percent of book value. On the date of acquisition, Siena had common stock outstanding of $300,000 and a balance in retained earnings of $650,000. During 20X3, Siena purchased inventory for $35,000 and sold it to Pisa for $50,000. Of this amount, Pisa reported $20,000 in ending inventory in 20X3 and later sold it in 20X4. In 20X4, Pisa sold inventory it had purchased for $40,000 to Siena for $60,000. Siena sold $45,000 of this inventory in 20X4. Income and dividend information for Siena for 20X3 and 20X4 are as follows: Year Net Income Dividends 20X3 $ 150,000 $ 40,000 20X4 $ 200,000 $ 50,000 Pisa Company uses the fully adjusted equity method. Required: Present the worksheet consolidation entries necessary to prepare consolidated financial statements for 20X3. Present the worksheet consolidation entries necessary to prepare…

Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $98,000. At that date, the fair value of the noncontrolling interest was $42,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Phone Corporation Smart Corporation Cash $ 52,300 $ 39,000 Accounts Receivable 99,000 59,000 Inventory 136,000 92,000 Land 66,000 49,000 Buildings & Equipment 417,000 268,000 Less: Accumulated Depreciation (151,000) (73,000) Investment in Smart Corporation 98,000   Total Assets $ 717,300 $ 434,000 Accounts Payable $ 141,500 $ 27,000 Mortgage Payable 300,800 288,000 Common Stock 72,000 40,000 Retained Earnings 203,000 79,000 Total Liabilities & Stockholders’ Equity $ 717,300 $ 434,000 At the date of the business combination, the book values of Smart’s assets and liabilities approximated fair value except for inventory, which had a fair value of…

Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $98,000. At that date, the fair value of the noncontrolling interest was $42,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Phone Corporation Smart Corporation Cash $ 52,300 $ 39,000 Accounts Receivable 99,000 59,000 Inventory 136,000 92,000 Land 66,000 49,000 Buildings & Equipment 417,000 268,000 Less: Accumulated Depreciation (151,000) (73,000) Investment in Smart Corporation 98,000   Total Assets $ 717,300 $ 434,000 Accounts Payable $ 141,500 $ 27,000 Mortgage Payable 300,800 288,000 Common Stock 72,000 40,000 Retained Earnings 203,000 79,000 Total Liabilities & Stockholders’ Equity $ 717,300 $ 434,000 At the date of the business combination, the book values of Smart’s assets and liabilities approximated fair value except for inventory, which had a fair value of…

On January 1, Tesco Company spent a total of $4,384,000 to acquire control over Blondel Company. This price was based on paying $424,000 for 20 percent of Blondel’s preferred stock and $3,960,000 for 90 percent of its outstanding common stock. At the acquisition date, the fair value of the 10 percent noncontrolling interest in Blondel’s common stock was $440,000. The fair value of the 80 percent of Blondel’s preferred shares not owned by Tesco was $1,696,000. Blondel’s stock-holders’ equity accounts at January 1 were as follows:Preferred stock—9%, $100 par value, cumulative and participating;  10,000 shares outstanding  ......  $ 1,000,000Common stock—$50 par value; 40,000 shares outstanding . . 2,000,000Retained earnings . . . . .   3,000,000Total stockholders’ equity . $ 6,000,000 Tesco believes that all of Blondel’s accounts approximate their fair values within the company’s financial statements. What amount of consolidated goodwill should be recognized? Choose the correct.a. $…

On January 1, Tesco Company spent a total of $4,384,000 to acquire control over Blondel Company. This price was based on paying $424,000 for 20 percent of Blondel’s preferred stock and $3,960,000 for 90 percent of its outstanding common stock. At the acquisition date, the fair value of the 10 percent noncontrolling interest in Blondel’s common stock was $440,000. The fair value of the 80 percent of Blondel’s preferred shares not owned by Tesco was $1,696,000. Blondel’s stockholders’ equity accounts at January 1 were as follows:Tesco believes that all of Blondel’s accounts approximate their fair values within the company’s financial statements. What amount of consolidated goodwill should be recognized?a. $ 300,000b. $ 316,000c. $ 364,000d. $ 520,000

Puncho Company is acquiring the net assets of Semos Company in exchange for common stock valued at $900,000. The Semos identifiable net assets have book and fair values of $400,000 and $800,000, respectively. Compare accounting for the acquisition (including assignment of the price paid) by Puncho with accounting for the sale by Semos.

Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $216,000. At that date, the fair value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common stock for $97,000. Summarized balance sheets for Split on the dates indicated are as follows: Assets Cash Accounts Receivable Inventory Buildings & Equipment (net) Total Assets Liabilities & Equities Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities & Equities 20X7 $ 49,000 51,000 72,000 370,000 $542,000 December 31 20X8 Balance in investment account $ 79,000 91,000 102,000 350,000 $622,000 20X9 $ 99,000 121,000 162,000 330,000 $712,000 $ 77,000 $127,000 $167,000 105,000 105,000 105,000 155,000 155,000 155,000 205,000 235,000 285,000 $542,000 $622,000 $712,000 Split paid dividends of $22,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and…