Acct 559- Quiz 3 Feedback Virginia Valdez

Problem 1-26 (Algo) (LO 1-2, 1-4, 1-5) On December 31, 2022, Akron, Incorporated, purchased 5 percent of Zip Company's common shares on the open market in exchange for $15,650. On December 31, 2023, Akron, Incorporated, acquires an additional 25 percent of Zip Company's outstanding common stock for $96,000. During the next two years, the following information is available for Zip Company: Year 2022 2023 2024 Income $ 76,000 97,000 Dividends Declared $ 6,100 16,000 a1. Equity income a2. Investment in Zip account b1. Reported income b2. Investment in Zip account Common Stock Fair Value (12/31) $313,000 384,000 477,000 At December 31, 2023, Zip reports a net book value of $299,000. Akron attributed any excess of its 30 percent share of Zip's fair ove book value to its share of Zip's franchise agreements. The franchise agreements had a remaining life of 10 years at December 31, 2023. Required: a. Assume Akron applies the equity method to its Investment in Zip account: 1. What amount of…

Chapter 2. 1.  On 12/31, Choco acquired all assets and liabilities of Cake by issuing 40,000 shares of its common stock when the market value (=fair value) is $32/share and this combination is a statutory merger (Cake was dissolved).  Choco has common stock with $15 par, 50,000 shares outstanding and Cake has $5 par, 60,000 shares outstanding   Choco Book Values Cake Book Values Cake Fair Values   Cash and Receivable 350,000 180,000 170,000   Inventories 250,000 100,000 150,000   Land 700,000 120,000 240,000   Building and equipment 600,000 600,000 900,000   Patented technology 100,000 0 60,000   Accounts payable 300,000 120,000 150,000   Long-term debt 0 400,000 350,000   Common stock 750,000 300,000     Additional paid in capital 500,000 60,000     Retained earnings 12/31 450,000 120,000     Revenues 350,000 160,000     Expenses 310,000…

Chapter 2. 1.  On 12/31, Choco acquired all assets and liabilities of Cake by issuing 40,000 shares of its common stock when the market value (=fair value) is $32/share and this combination is a statutory merger (Cake was dissolved).  Choco has common stock with $15 par, 50,000 shares outstanding and Cake has $5 par, 60,000 shares outstanding   Choco Book Values Cake Book Values Cake Fair Values   Cash and Receivable 350,000 180,000 170,000   Inventories 250,000 100,000 150,000   Land 700,000 120,000 240,000   Building and equipment 600,000 600,000 900,000   Patented technology 100,000 0 60,000   Accounts payable 300,000 120,000 150,000   Long-term debt 0 400,000 350,000   Common stock 750,000 300,000     Additional paid in capital 500,000 60,000     Retained earnings 12/31 450,000 120,000     Revenues 350,000 160,000     Expenses 310,000 130,000 Q7. Choco also paid $12,000 in cash for stock issuance cost.  What is the journal entry?

View previous attempt Check my On January 1, 2024, Presidio Company acquired 100 percent of the outstanding common stock of Mason Company. To acquire these shares, Presidio issued to the owners of Mason $295,000 in long-term liabilities and 20,000 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Presidio paid $26,500 to accountants, lawyers, and brokers for assistance in the acquisition and another $11,500 in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Items Presidio Company Cash $ 63,000 Mason Company $ 29,200 Land Receivables Inventory Buildings (net) 306,000 189,000 426,000 168,000 207,000 213,000 484,000 237,000 Equipment (net) 167,000 73,800 Accounts payable Long-term liabilities (221,000) (62,700) (444,000) (295,000) Common stock-$1 par value (110,000) 0 5 Common stock-$20 par value 0 (120,000) Additional paid-in capital Retained earnings, 1/1/24 (360,000)…

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25 Petron Company issued 5 shares in exchange for each ordinary share of Shell Company (all outstanding shares) on January 2, 2022. The fair value of Petron's shares on that date was P60 while the fair value of Shell's shares was P200. The statement of financial position of both companies before the combination were (see image below). On the same date, the fair value of Petran's identifiable assets and liabilities assumed was P5,800 and P2,100 respectively while the fair value of Shell's net assets was the same as the carrying value. How much is the amount of consideration? A Petron Shell Assets 5,500 11,500 11,500 Total 5,500 Liabilities 2,100 900 5,100 Share Capital - 100 shares Share Capital –- 60 shares Retained Earnings 1,800 4,600 11,500 2,500 Total 5,500

PROBLEM IV. On January 2, 2019, Klaus Company (qualified as SME) acquired 80% interest in Marcel Company for P4,125,000 cash. On this date, the outstanding ordinary share capital and accumulated profits of Klaus Company and Marcel Company are as follows: Klaus Marcel Ordinary share capital P 2,250,000 P 1,312,000 Share premium 1,750,000 Accumulated profits (losses) 5,520,000 3,187,500 There was no issuance of ordinary shares during the year. Fair value of the following assets of Marcel exceeded their book values as follows: Inventories, P210,000; Property and equipment (useful life, 10 years), P127,500. All other assets and liabilities are fairly valued. On December 31, 2019, the two companies reported the following operating results: Klaus Marcel Net income P 1,825,000 P 975,000 Dividends paid 525,000 262,500 1. Consolidated shareholders' equity reported in the consolidated statement of financial position on 12/31/19

Problem 3-15 (Algo) (LO 3-3, 3-4) Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2020, by issuing 10,500 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $110,750. However, its equipment (with a five-year remaining life) was undervalued by $8,850 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $37,900, although no value had been recorded on Turner’s books. The customer list had an estimated remaining useful life of 10 years.   The following balances come from the individual accounting records of these two companies as of December 31, 2020:     Haynes Turner Revenues $ (686,000 ) $ (318,000 ) Expenses   490,000     149,000   Investment income   Not given     0   Dividends declared   100,000     80,000     The following balances come from the individual accounting records of these two companies…

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Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y Total earnings $ 40,000 $ 15,000 Shares outstanding 20,000 20,000 Per-share values: Market $ 49 $ 18 Book $ 20 $ 7 Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $4 per share. Assuming that neither firm has any debt before or after the merger, what are the total assets of Firm X after the merger?

Illustration 1. Share-for-share exchanges On January 1, 2022, Frank Co. and Richard, Inc. combined. As of this date, the fair values of the assets, liabilities and equity of Frank and Richard before the business combination are as follows:   On the negotiation for the business combination, the acquirer incurred the following transaction costs: P45,000.00 for legal fees; P 5,000.00 for due diligence cost and P 80,000.00 for the general admin cost and cost of maintaining an internal acquisition department. Case 1: before the transaction, Frank, Co. have 7,000 outstanding shares. Frank Co. Issued additional 10,000 shares as consideration for a 100% interest in Richard. Frank’s shares currently sells P150 per share in the market, while Richard’s shares are quoted at P200 per share. With the stated facts, answer the following: 1.How much is the Share Premium of the combined company after the business combination?a. P 730,000.00b. P 1,230,000.00c. P 800,000.00d. P 1,700,000.002.How much is…