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ABC purchased 80% of the voting shares of XYZ Ltd. on Jan.1.2022 for $669,200. Assets Cash Inventory Land Property, Plant, and Equipment Total Assets Liabilities Accounts Payable Shareholders' Equity Preferred Shares Common Shares Retained Earnings Total Liabilities and Shareholders' Equity Book Value $38,000 $207,000 $195,000 $1,010,000 $1,450,000 $100,000 $450,000 $750,000 $150,000 $1,450,000 Fair Value $38,000 $252,000 $195,000 $900,000 $1,385,000 $100,000 The preferred shares are non-voting and are entitled to 10% cumulative dividends. On Jan.1.2022, there were cumulative dividends in arrears of $45,000, which were paid in 2022. The preferred shares carried a call premium of 8% of face value. Property, plant and equipment have a remaining useful life of 10 years. Goodwill was impaired by $41,125 for 2022. ABC records its Investment in XYZ using the COST METHOD. 1) What are the balances of Goodwill, Property, Plant and Equipment and Inventory on Dec.31. 2022

ABC purchased 80% of the voting shares of XYZ Ltd. on Jan.1.2022 for $669,200. Assets Cash Inventory Land Property, Plant, and Equipment Total Assets Liabilities Accounts Payable Shareholders' Equity Preferred Shares Common Shares Retained Earnings Total Liabilities and Shareholders' Equity Book Value $38,000 $207,000 $195,000 $1,010,000 $1,450,000 $100,000 $450,000 $750,000 $150,000 $1,450,000 Fair Value $38,000 $252,000 $195,000 $900,000 $1,385,000 $100,000 The preferred shares are non-voting and are entitled to 10% cumulative dividends. On Jan.1.2022, there were cumulative dividends in arrears of $45,000, which were paid in 2022. The preferred shares carried a call premium of 8% of face value. Property, plant and equipment have a remaining useful life of 10 years. Goodwill was impaired by $41,125 for 2022. ABC records its Investment in XYZ using the COST METHOD. 1) What are the balances of Goodwill, Property, Plant and Equipment and Inventory on Dec.31. 2022

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
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ABC purchased 80% of the voting shares of XYZ Ltd. on Jan.1.2022 for $669,200. Assets Cash Inventory Land Property, Plant, and Equipment Total Assets Liabilities Accounts Payable Shareholders' Equity Preferred Shares Common Shares Retained Earnings Total Liabilities and Shareholders' Equity Book Value $38,000 $207,000 $195,000 $1,010,000 $1,450,000 $100,000 $450,000 $750,000 $150,000 $1,450,000 Fair Value $38,000 $252,000 $195,000 $900,000 $1,385,000 $100,000 The preferred shares are non-voting and are entitled to 10% cumulative dividends. On Jan.1.2022, there were cumulative dividends in arrears of $45,000, which were paid in 2022. The preferred shares carried a call premium of 8% of face value. Property, plant and equipment have a remaining useful life of 10 years. Goodwill was impaired by $41,125 for 2022. ABC records its Investment in XYZ using the COST METHOD. 1) What are the balances of Goodwill, Property, Plant and Equipment and Inventory on Dec.31. 2022
Transcribed Image Text:ABC purchased 80% of the voting shares of XYZ Ltd. on Jan.1.2022 for $669,200. Assets Cash Inventory Land Property, Plant, and Equipment Total Assets Liabilities Accounts Payable Shareholders' Equity Preferred Shares Common Shares Retained Earnings Total Liabilities and Shareholders' Equity Book Value $38,000 $207,000 $195,000 $1,010,000 $1,450,000 $100,000 $450,000 $750,000 $150,000 $1,450,000 Fair Value $38,000 $252,000 $195,000 $900,000 $1,385,000 $100,000 The preferred shares are non-voting and are entitled to 10% cumulative dividends. On Jan.1.2022, there were cumulative dividends in arrears of $45,000, which were paid in 2022. The preferred shares carried a call premium of 8% of face value. Property, plant and equipment have a remaining useful life of 10 years. Goodwill was impaired by $41,125 for 2022. ABC records its Investment in XYZ using the COST METHOD. 1) What are the balances of Goodwill, Property, Plant and Equipment and Inventory on Dec.31. 2022
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