Plant acquisitions for selected companies are as follows.1. Novak Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $1.050,000. At the time ofpurchase, Torres's assets had the following book and appraisal values.LandBuildingsEquipmentLandBook ValuesBuildingsEquipmentCash$300,000375,000450,000To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made.225,000AppraisalValues$225,000525,000450,000375,000450,0001,050,000SUPPORT

The question is related to Property, Plant and Equipment. When Property, Plant and Equipment are…

Plant acquisitions for selected companies are as follows. 1. Novak Industries Inc., acquired land, buildings, and equipment from a bankrupt company, Torres Co, for a lump-sum price of $1,050,000. At the time of purchase, Torres's assets had the following book and appraisal values. Land Buildings Equipment Book Values $300,000 375,000 450,000 Appraisal Values Land 225,000 Buildings 375,000 Equipment 450,000 Cash $225,000 525,000 450,000 To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made. 1,050,000 SUPPO

Plant acquisitions for selected companies are as follows. 1. Novak Industries Inc., acquired land, buildings, and equipment from a bankrupt company, Torres Co, for a lump-sum price of $1,050,000. At the time of purchase, Torres's assets had the following book and appraisal values. Land Buildings Equipment Book Values $300,000 375,000 450,000 Appraisal Values Land 225,000 Buildings 375,000 Equipment 450,000 Cash $225,000 525,000 450,000 To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made. 1,050,000 SUPPO

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter14: Statement Of Cash Flows

Section: Chapter Questions

Problem 37E: During 20X1, Craig Company had the following transactions: a. Purchased 300,000 of 10-year bonds...

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On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received $12,000,000 in net assets. In 2016, the market value of the goodwill obtained from Branta Corp. was valued at $4,000,000, but in 2017 it dropped to $2,000,000. Prepare the journal entry for the creation of goodwill and the entry to record any impairments to it in subsequent years.
During 20X1, Craig Company had the following transactions: a. Purchased 300,000 of 10-year bonds issued by Makenzie Inc. b. Acquired land valued at 105,000 in exchange for machinery. c. Sold equipment with original cost of 810,000 for 495,000; accumulated depreciation taken on the equipment to the point of sale was 270,000. d. Purchased new machinery for 180,000. e. Purchased common stock in Lemmons Company for 82,500. Required: 1. Prepare the net cash from investing activities section of the statement of cash flows. 2. CONCEPTUAL CONNECTION Usually, the net cash from investing activities is negative. How can Craig cover this negative cash flow? What other information would you like to have to make this decision?
Farm Fresh Agriculture Company purchased Sunny Side Egg Distribution for $400,000 cash when Sunny Side had net assets worth $390,000. A. What is the amount of goodwill in this transaction? B. What is Farm Fresh Agriculture Companys journal entry to record the purchase of Sunny Side Egg Distribution? C. What journal entry should Farm Fresh Agriculture Company write when the company tests for impairment and determines that goodwill is worth $1,000 in the year following the purchase of Sunny Side?
Plant acquisitions for selected companies are as follows.1. Bramble Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $756,000. At the time of purchase, Torres’s assets had the following book and appraisal values. Book Values Appraisal Values Land $216,000 $162,000 Buildings 270,000 378,000 Equipment 324,000 324,000 To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made. Land 162,000 Buildings 270,000 Equipment 324,000 Cash 756,000 2. Sunland Enterprises purchased store equipment by making a $2,160 cash down payment and signing a 1-year, $24,840, 10% note payable. The purchase was recorded as follows. Equipment 29,484 Cash 2,160 Notes Payable 24,840 Interest Payable 2,484 3. Coronado Company purchased…
Plant acquisitions for selected companies are as follows: 1. Sandhill Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $765,000. At the time of purchase, Torres’s assets had the following book and appraisal values: Book Value Appraisal Value Land $199,000 $151,000 Buildings 241,000 350,000 Equipment 373,000 373,000 Sandhill Industries decided to take the lower of the two values for each asset it acquired. The following entry was made: Land 151,000 Buildings 241,000 Equipment 373,000 Cash 765,000 Sandhill Industries expects the building structure to last another 20 years; however, it expects that it will have to replace the roof in the next five years. Torres Co. indicated that, on initial construction of the building, the roof amounted to 20% of the cost of the building. Because of the unique…
Plant acquisitions for selected companies are as follows: 1. Sandhill Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $720,000. At the time of purchase, Torres’s assets had the following book and appraisal values: Book Value Appraisal Value Land $210,000 $140,000 Buildings 248,000 349,000 Equipment 332,000 332,000 Sandhill Industries decided to take the lower of the two values for each asset it acquired. The following entry was made: Land 140,000 Buildings 248,000 Equipment 332,000 Cash 720,000 Sandhill Industries expects the building structure to last another 20 years; however, it expects that it will have to replace the roof in the next five years. Torres Co. indicated that, on initial construction of the building, the roof amounted to 20% of the cost of the building. Because of the unique design and materials needed to replace the roof, the…
Plant acquisitions for selected companies are as follows. 1. Belanna Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $700,000. At the time of purchase, Torres’s assets had the following book and appraisal values. Book Values Appraisal Values Land Buildings Equipment $200,0000 250,0000 300,0000 $150,00000 350,00000 300,00000 To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made. Land Buildings Equipment Cash 150,000 250,000 300,000 700,000 2. Harry Enterprises purchased store equipment by making a $2,000 cash down payment and signing a 1-year, $23,000, 10% note payable. The purchase was recorded as follows. Equipment Cash Notes Payable Interest Payable 27,300 2,000 23,000 2,300 3. Kim Company purchased office equipment for $20,000, terms 2/10, n/30. Because…
Plant acquisitions for selected companies are as follows: 1. Cullumber Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $692,000. At the time of purchase, Torres’s assets had the following book and appraisal values: Book Value Appraisal Value Land $219,000 $144,000 Buildings 244,000 351,000 Equipment 304,000 304,000 Cullumber Industries decided to take the lower of the two values for each asset it acquired. The following entry was made: Land 144,000 Buildings 244,000 Equipment 304,000 Cash 692,000 Cullumber Industries expects the building structure to last another 20 years; however, it expects that it will have to replace the roof in the next five years. Torres Co. indicated that, on initial construction of the building, the roof amounted to 19% of the cost of the building. Because of the unique design and materials needed to replace the roof,…
Plant acquisitions for selected companies are as follows: 1. Cullumber Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $692,000. At the time of purchase, Torres’s assets had the following book and appraisal values: Book Value Appraisal Value Land $219,000 $144,000 Buildings 244,000 351,000 Equipment 304,000 304,000 Cullumber Industries decided to take the lower of the two values for each asset it acquired. The following entry was made: Land 144,000 Buildings 244,000 Equipment 304,000 Cash 692,000 Cullumber Industries expects the building structure to last another 20 years; however, it expects that it will have to replace the roof in the next five years. Torres Co. indicated that, on initial construction of the building, the roof amounted to 19% of the cost of the building. Because of the unique design and materials needed to replace the roof,…
Protex Inc. acquired land, buildings, and equipment from a bankrupt company, for a lump-sum price of $700,000. At the time of purchase, the assets had the following book and appraisal values.Book Values Appraisal ValuesLand $200,000 $300,000Buildings 450,000 250,000Equipment 300,000 250,000To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made.Land 200,000Buildings 250,000Equipment 250,000Cash 700,0002. Apple Industries purchased store equipment by making a $10,000 cash down payment and signing a 2-year, $40,000, 8% note payable. The purchase was recorded as follows.Store Equipment 56,400 Cash 10,000Note Payable 40,000Interest Payable 6,4003. Cherry Company purchased office equipment for $50,000, terms 1/10, n/30. Because the company intended to take the discount, it made no entry until it paid for the acquisition. The entry was:Office Equipment 50,000Cash 49,500Purchase Discounts 5004. Bubble Inc. recently…
on Knight Company made the following acquisitions during the year Purchased for P5,400,000 , excluding appraiser fee of P100,000 , a warehouse building and the land on which it is located The land had an appraised value of P3,000,000 and original cost of 100, 000 . The building had an appraised value of P2,000,000 and original cost of P2,800,000 . Purchased an office building and the land on which it is located for P7,500,000 and assumed an existing P2,500,000 mortgage . For realty tax purposes , the property is assessed at 600, 000 , 60 % of which is allocated to the land . What is the total cost of land ?
Knight Company made the following acquisitions during the year Purchased for P5,400,000 , excluding appraiser fee of P100,000, a warehouse building and the land on which it is located The land had an appraised value of P3,000,000 and original cost of P1,400,000 The building had an appraised value of P2,000, and original cost of P2,800,000 Purchased an office building and the land on which it is located for P7,500,000 and assumed an existing P2,500,000 mortgage For realty tax purposes, the property is assessed at P9.600,000,60\% of which is allocated to the land What is the total cost of building?