On January 1, 2010, P Company acquired the net assets of S Company for $1,580,000 cash. The fair value of S Co. identifiable net assets was $1,310,000 on this date. P Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (S Co.). The information for these subsequent years is as follows: Carrying value of SCo. Identifiable Net Assets $1,160,000 Fair Value S Co. Identifiable Net Assets $1,190,000 Present value of Future Cash Flows $1,390,000 Year 2011 2012 $1,400,000 $1,120,000 $1,210,000 * identifiable net assets do not include goodwill.

On January 1, 2010, P Company acquired the net assets of S Company for $1,580,000 cash. The fair value of S Co. identifiable net assets was $1,310,000 on this date. P Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (S Co.). The information for these subsequent years is as follows: Carrying value of SCo. Identifiable Net Assets $1,160,000 Fair Value S Co. Identifiable Net Assets $1,190,000 Present value of Future Cash Flows $1,390,000 Year 2011 2012 $1,400,000 $1,120,000 $1,210,000 * identifiable net assets do not include goodwill.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 4MCQ

See similar textbooks

Similar questions

Presented below is information related to Crane Company at December 31, 2020, the end of its first year of operations. Sales revenue $784,000 Cost of goods sold 374,000 Selling and administrative expenses 144,000 Unusual gain on sale of plant assets 71,000 Unrealized gain on available-for-sale investments 40,000 Interest expense 25,000 Loss on discontinued operations 47,000 Allocation to noncontrolling interest 113,000 Dividends declared and paid 19,000 Compute the following. Ignore income tax effects. (a) Income from operations $ (b) Net income $ (c) Net income attributable to Crane Company’s controlling stockholders $ (d) Comprehensive income $ (e) Retained earnings balance at December 31, 2020 $
Tired Company’s assets for the current year decreased by P135,000 while its liabilities increased by P25,000. During the year, the owner withdrew P12,000 and made additional investment of P17,000. How much is the net income (loss) for the year? (P165,000) (P105,000) (P115,000 (P110,000)
Prepare an Income Statement of Company Alfex as at 31 Dec. 2020.a) Write off (in minus) of short-term financial assets 9 000b) Other costs by nature 4 000c) Change in inventories of traded goods + 2 000d) Revenue from sale of building 50 000e) Income tax 10%f) Revenue from sale of traded goods 12 000g) Retained profits from previous years 10 000h) Accumulated depreciation of building 49 000i) Historical cost of building 102 000
South Valley Company’s assets for the current year decreased by P135,000 while its liabilities increased by P25,000. During the year, the owner withdrew P12,000 and made additional investment of P17,000. How much is the net income (loss) for the year?a. (P165,000) c. (P105,000)b. (P115,000 d. (P110,000)
A piece of equipment was bought on 2nd January 2015 for $ 90,000, The Company depreciates its PP&E at 10% on cost with no depreciation during the year of disposal. The equipment was sold on 1st July 2019 for $60,000. What was the gain or loss on disposal? A. Loss of $ 30,000 B. Gain of $ 30,000 C. Loss of $ 6,000 D. Gain of $ 6,000
Ryan Company reported an impairment loss of P2,540,000 in its statement of comprehensive income for the year ended December 31, 2018. This loss was related to long-lived assets acquired on January 1, 2017 with cost of P10,000,000, useful life of 10 years and 200,000 residual value. On the December 31, 2018 statement of financial position, Ryan reported these long-lived assets at P5,500,000 which is the fair value on such date. On December 31, 2019, Ryan determined that the fair value of its impaired long-lived assets had increased to P6,700,000. The straight line depreciation is recorded for the impaired assets. Required: Depreciation expense for 2019. Please answer it complete using good accounting form. Thank you
Mercury Inc. reported net income of $100,000 for 2020. In addition, the income statement reported $20,000 of depreciation expense and a $10,000 gain on the sale of land. The noncurrent assets from the company’s comparative balance sheet are as follows: 12/31/2020 12/31/2021 Increase(Decrease) Land $ 125,000 $ 225,000 $(100,000) Equipment 500,000 400,000 100,000 Accumulated depreciation—equipment (120,000) (100,000) 20,000 There were no disposals of equipment, and all purchases of equipment were for cash. Prepare the “Cash flows from investing activities” section of the statement of cash flows. (note: you are preparing only one section of the Statement of Cash Flows)
for the year ending december 31 2019, settles inc. eanred an ROI of 8.8%. Sales for the year were 16 million and average asset turnover was 2.1. Average stockholder equity was 2.7 million. a. calculate settles margin and net inccome b. calculate settles return on equity
Use the following information for the next four (4) questions: Sison Company reported profits of P4,000,000 and P8,000,000 in 2021 and 2022, respectively. In 2023, the following prior period errors were discovered: The inventory on December 31, 2021 was understated by P200,000. An equipment with an acquisition cost of P1,200,000 was erroneously charged as expense in 2021. The equipment has an estimated useful life of 5 years with no residual value. Sison Company provides full year depreciation in the year of acquisition. The unadjusted balances of retained earnings are P8,800,000 and P16,800,000 as of December 31, 2021 and 2022, respectively. How much is the correct profit in 2021? How much is the correct profit in 2022? How much is the correct retained earnings in 2021? How much is the correct retained earnings in 2022?
Presented below is information related to equipment owned by Porto Company at December 31, 2017. Cost $5,600,000 Accumulated depreciation to date 640,000 Expected future net cash flows 4,000,000 Fair value 2,720,000 Assume that Porto will continue to use this asset in the future. As of December 31, 2017, the equipment has a remaining useful life of 4 years.How much is the Loss on Impairment? If there is no loss, enter “0.”
Presented below is information related to Viel Company at December 31, 2020, the end of its first year of operations. Sales revenue $310,000 Cost of goods sold 140,000 Selling and administrative expenses 50,000 Gain on sale of plant assets 30,000 Unrealized gain on available-for-sale debt investments 10,000 Interest expense 6,000 Loss on discontinued operations 12,000 Dividends declared and paid 5,000 Instructions Compute the following: (a) income from operations, (b) net income, (c) comprehensive income, and (d) retained earnings balance at December 31, 2020. (Ignore income tax effects.)
Presented below is information related to Sohar Inc at December 31, 2020. Sales Revenue OMR 585,000 Cost of goods sold 265,000 Selling and Administrative Expenses 72,000 Gain on sale of plant 38,000 Unrealized gain on sale of Investments 16,000 Interest Expenses 9,000 Loss on discontinued operation 17,000 Allocation to non-controlling interest 49,000 Dividend declared and paid 8,000 Compute the following: (a) Income from operation, (b) net income, (c) net income attributed to controlling shareholders, (d) Comprehensive income, (e) retained earning balance.