People Co. acquired 80% of Steeple Co.'s common stockfor $10,000,000 in cash on Jan. 2, 20x1. At that date,Steeple's 56,000,000 of net assets were fairly stated,except for an unrecorded intangible asset, favorable leases,with a $1,000,000 value (useful life of 10 years, straight-lineamortization). The estimated fair value of the noncontrollinginterests at the acquisition date was $2,000,000. PeopleCo. accounts for its investment in Steeple Co. using theequity method. There are no intra-entity transactions andboth firms are in the U.S.A It is now December 31, 20x3.Steeple reported net income of $250,000 for the currentyear, and declared and paid $40,000 in dividends. Therewere no impairments of Steeple's assets in 20x1, 20x2 orbut goodwill is impaired by $100,000 in 20x3.Show consolidating entry R (relates to recognizingrevalued assets and liabilities) that would be needed topresent consolidated financial statements for 20x3.

Name: People Co. acquired 80% of Steeple Co.'s common stockfor $10,000,000
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Description: People Co. acquired 80% of Steeple Co.'s common stockfor $10,000,000 in cash on Jan. 2, 20x1. At that date,Steeple's 56,000,000 of net assets were fairly stated,except for an unrecorded intangible asset, favorable leases,with a $1,000,000 value (use

The entries have been prepared below.

Answered: 00,000 in cash on Jan. 56,000,000 of…

Business

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00,000 in cash on Jan. 56,000,000 of net ass r an unrecorded intang 000,000 value (useful on). The estimated fair

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 19E

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On January 1, Fawaz Co. acquired 60% of the outstanding voting stock of Bambi for $26,000 cash consideration. The remaining 40% percent of Bambi had an acquisition date fair value of $6,500. On January 1, Bambi possessed 5-year life equipment that was undervalued in its books by $2,500. Bambi also had developed several secret formulas that Fawaz assessed at $5,000. These formulas, although not recorded on Bambi's financial records, were estimated to have a 20-year future life. Fawaz also determined that the inventory of Bambi is overvalued by $1,000. 80% of these inventories remain unsold by the end of the year. As of December 31, the financial statement is as follows: Fawaz (in dollars) Bambi (in dollars) Revenues (from sales and individuals) -30,000 -20,000 Cost of goods sold 14,000 8,000 Expenses 2,000 1,000 Net Income -14,000 -11,000 Retained earnings-1/1 -30,000 -15,000 Net Income -14,000 -11,000 Dividends Paid - 1,000 Retained Earnings-12/31 -44,000…
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On January 1, 20x8, Bristol Company acquired 80 percent of Animation Company's common stock for $280,000 cash. At that date, Animation reported common stock outstanding of $200,000 and retained earnings of $100,000, and the fair value of the noncontrolling interest was $70,000. The book values and fair values of Animation's assets and liabilities were equal, except for other intangible assets which had a fair value $50,000 greater than book value and an 8-year remaining life. Animation reported the following data for 20x8 and 20x9: Year Comprehensive Income Dividends Paid20x8 $30,000 $5,00020x9 $45,000 $10,000 Bristol reported net income of $100,000 and paid dividends of $30,000 for both the years. What is the amount of consolidated comprehensive income reported for 20x9? What is the amount of comprehensive income attributable to the controlling interest for 20x8? What is the…
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On January 1, Patterson Corporation acquired 80 percent of the 100,000 outstanding voting shares of Soriano, Inc., in exchange for $31.25 per share cash. The remaining 20 percent of Soriano’s shares continued to trade for $30 both before and after Patterson’s acquisition. At January 1, Soriano’s book and fair values were as follows: Book Values Fair Values Remaining Life Current assets $ 80,000 $ 80,000 Buildings and equipment 1,250,000 1,000,000 5 years Trademarks 700,000 900,000 10 years Patented technology 940,000 2,000,000 4 years $ 2,970,000 Current liabilities $ 180,000 $ 180,000 Long-term notes payable 1,500,000 1,500,000 Common stock 50,000 Additional paid-in capital 500,000 Retained earnings 740,000 $ 2,970,000 In addition, Patterson assigned a $600,000 value to certain unpatented technologies recently developed…
On January 1, Patterson Corporation acquired 80 percent of the 100,000 outstanding voting shares of Soriano, Inc., in exchange for $31.25 per share cash. The remaining 20 percent of Soriano’s shares continued to trade for $30 both before and after Patterson’s acquisition. At January 1, Soriano’s book and fair values were as follows: Book Values Fair Values Remaining Life Current assets $ 80,000 $ 80,000 Buildings and equipment 1,250,000 1,000,000 5 years Trademarks 700,000 900,000 10 years Patented technology 940,000 2,000,000 4 years $ 2,970,000 Current liabilities $ 180,000 $ 180,000 Long-term notes payable 1,500,000 1,500,000 Common stock 50,000 Additional paid-in capital 500,000 Retained earnings 740,000 $ 2,970,000 In addition, Patterson assigned a $600,000 value to certain unpatented technologies recently developed…
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