A primary beneficiary company has established control over a VIE by guaranteeing its long term debt and by establishing an income distribution contract. The balance sheet of the VIE on the acquisition date was as follows: Current assets . . . . . . . . . . . . 100,000 Land and buildings . . . . . . . 600,000 Accumulated depreciation (100,000) Equipment . . . . . . . . . . . . . . . 300,000 Accumulated depreciation . (50,000) Total assets. . . . . . . . . . . . . . . 850,000 Current liabilities . . .. . . . . . . . 70,000 Long term note payable . . 700,000 Common stock, $1 par . . . . . . 5,000 Paid-in excess of par . . . . . .. . 45,000 Retained earnings . . . . . . .. . . 30,000 Total liabilities and equity .. 850,000 The fair values of the land and buildings are $800,000. The fair value of the equipment is $400,000. The fair value of the company’s net (of debt) assets is estimated to be $600,000. Prepare the distribution of excess schedule.
A primary beneficiary company has established control over a VIE by guaranteeing its long term debt and by establishing an income distribution contract. The balance sheet of the VIE on the acquisition date was as follows:
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Current assets . . . . . . . . . . . . 100,000 Land and buildings . . . . . . . 600,000 Equipment . . . . . . . . . . . . . . . 300,000 Accumulated depreciation . (50,000) Total assets. . . . . . . . . . . . . . . 850,000 |
Current liabilities . . .. . . . . . . . 70,000 Long term note payable . . 700,000 Common stock, $1 par . . . . . . 5,000 Paid-in excess of par . . . . . .. . 45,000 Total liabilities and equity .. 850,000 |
The fair values of the land and buildings are $800,000. The fair value of the equipment is $400,000. The fair value of the company’s net (of debt) assets is estimated to be $600,000.
Prepare the distribution of excess schedule.
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