Acct 559- Quiz 3 Feedback Virginia Valdez

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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?

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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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Determine the total assets of Parent Company immediately after the merger. A. 34,165,000 B. 35,325,000 C. 30,665,000 D. 29,865,000

Case 2: before the transaction, Richard, Inc. have 20,000 outstanding shares. Richard issued 12,000 shares as consideration for a 60% interest in Frank. Richard’s shares currently sell P55 per share in the market, while Frank’s shares are quoted at P225 per share. Richard, Inc. elected to measure NCI at “proportionate share”. 1.How much is the goodwill (gain on bargain purchase) on the business combination?a. P (50,000.00)b. P 50,000.00c. P 55,000.00d. P 60,000.002.How much is the total Goodwill in the books of Richard, Inc. after the business combination?a. P 140,000.00b. P 190,000.00c. P 300,000.00d. P (300,000.00)3.How much is the total Share Capital in the books of Richard, Inc. after the business combination?a. P 600,000.00b. P 660,000.00c. P 620,000.00d. P 640,000.00

Problem 3-25 (Algo) (LO 3-1, 3-3a, 3-4) Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January 1, 2020, in exchange for $6,121,000 in cash. Allison intends to maintain Mathias as a wholly owned subsidiary. Both companies have December 31 fiscal year-ends. At the acquisition date, Mathias’s stockholders’ equity was $2,060,000 including retained earnings of $1,560,000.   At the acquisition date, Allison prepared the following fair-value allocation schedule for its newly acquired subsidiary:                   Consideration transferred         $ 6,121,000   Mathias stockholders' equity           2,060,000   Excess fair over book value         $ 4,061,000   to unpatented technology (8-year remaining life) $ 896,000           to patents (10-year remaining life)   2,620,000           to increase long-term debt (undervalued, 5-year remaining life)   (160,000 )     3,356,000   Goodwill         $ 705,000       Postacquisition, Allison…

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Problem 4-35 (Algo) (LO 4-2, 4-3, 4-5) Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid $744,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $186,000 both before and after Miller’s acquisition.   On January 1, 2019, Taylor reported a book value of $464,000 (Common Stock = $232,000; Additional Paid-In Capital = $69,600; Retained Earnings = $162,400). Several of Taylor’s buildings that had a remaining life of 20 years were undervalued by a total of $61,900.   During the next three years, Taylor reports income and declares dividends as follows:   Year Net Income Dividends 2019 $ 54,400   $ 7,800   2020   70,200     11,700   2021   78,000     15,600       Determine the appropriate answers for each of the following questions: What amount of excess depreciation expense should be recognized in the consolidated financial…

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Determine the fair value of consideration transferred on the business combination? How many shares were issued in the business combination?

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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

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Acquisition of Cats Rule: On January 1, 2019, Buddy Dog Food Company acquired Cats Rule Food Company for $3,000,000 cash and 2,500,000 shares of Buddy, $5 par common stock which had a fair value of $12 per share on 1/1/19. These amounts were paid to acquire all of the shares of Cats Rule Food Company. Buddy immediately delisted those shares and decided to treat the acquisition as a merger. Buddy also has agreed to pay the stockholders additional compensation based upon the realized Cats Rule EBITDA over the first 3 years that Buddy owns Cats Rule. The compensation will be 10% of the excess of the 3-year cumulative EBITDA over $2,000,000. A discount rate of 10% is reasonable. The probability distribution that Buddy has estimated for Cats Rule’s cumulative EBITDA is: 3 year Cumulative EBITDA Probability $1,000,000 .3 $2,100,000 .2 $3,000,000 .4 $5,000,000 .1 Other information about the acquisition: The 1/1/19 Buddy’s balance sheet before the acquisition is recorded and Cats Rule balance…

49 On May 1, 20x1, Sun Co. acquires additional 12,000 shares of Day Co. at P90 per share, the fair value on this date. The acquisition results in Sun Co. obtaining significant influence over Day Co. Day Co.'s total outstanding shares remain at 100,000. Day Co. reports 20x1 profit of P3,300,000 (earned eveniy during the year) and declares and pays P600,000 cash dividends at year-end. Day Co.'s shares are quoted at P92 per share on Dec. 31, 20x1. How much are reported in Sun Co.'s Dec. 31, 20x1 financial statements for the following? Share in profit of associate a. 660,000 b. 660,000 c. 528,000 d. 440,000 ,under Investments in Associates is date. 2z rep ividend ned en er shan ect of Investment in associate 1,620,000 2,420 1,840,000 2,208,000 2,120,000 Teg C f sale i Cheye

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