Proud Corporation acquired 80 percent of Spirited Company's voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Spirited at that date. Assume that the accumulated depreciation on depreciable assets was $52,000 on the acquisition date. Proud uses the equity method in accounting for its ownership of Spirited. On December 31, 20X4, the trial balances of the two companies are as follows: Item Current Assets Depreciable Assets Investment in Spirited Company Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities Long-Term Debt Common Stock Retained Earnings Sales Income from Spirited Company Proud Corporation Debit $ 255,000 518,000 133,280 23,000 148,000 53,000 Credit $ 200,000 63,000 127,880 193,000 277,000 231,000 38,400 $1,130,280 $1,130,280 Spirited Company Credit Debit $169,000 311,000 13,000 85,000 25,400 $ 78,000 43,000 192,400 87,000 57,000 146,000 $603,400 $603,400 Required: a. Prepare all consolidation entries required on December 31, 20X4, to prepare consolidated financial statements. (If no entry is

On January 1, 2XX1, Bald Eagle Corporation purchased 100% of the common stock Ohio Enterprises for $1,800,000. This transaction is a "nontaxable" acquisition under the Internal Revenue Code. On the date of acquisition, Ohio had common stock of $600,000 and retained earnings of $840,000. The fair values of Ohio's net assets equal their respective book values except for equipment that is undervalued by $90,000 and an unrecorded brand name valued at $135,000. Assume that the tax bases of Ohio's pre-acquisition identifiable net assets equal their book values. Bald Eagle's tax effective tax rate is 30%. What is the amount of goodwill recorded in connection with this combination? Select one: O a. $135,000 O b. $202,500 O c. $67,500 d. $-0-

Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying book value. At the date of acquisitior fair value of the noncontrolling Interest was equal to 25 percent of Saul's book value. The balance sheets of the two companies fc January 1, 20X1, are as follows: Cash Accounts Receivable. Inventory Buildings and Equipment Less: Accumulated Depreciation Investment in Saul Corporation Total Assets PENNY MANUFACTURING COMPANY Balance Sheet January 1, 20x1 Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Total Assets $ 231,500 Accounts Payable 75,000 Bonds Payable. 113,000 Common Stock 618,000 Additional Paid-In Capital (139,000) Retained Earnings 233,250 $ 1,131,758 Total Liabilities and Equities $ 159,750 380,000 181,000 31,000 380,000 $ 1,131,750 SAUL CORPORATION Balance Sheet January 1, 20x1 $ 61,000 Accounts Payable 115,000 Bonds Payable 193,000 Common Stock ($10 par) 618,000 Additional Paid-In Capital (239,000)…

Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $108,500. At that date, the noncontrolling interest had a fair value of $46,500 and Soda reported $70,000 of common stock outstanding and retained earnings of $30,000. The differential is assigned to buildings and equipment, which had a fair value $20,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $35,000 higher than book value and a remaining life of five years at the date of the business combination. Trial balances for the companies as of December 31, 20X3, are as follows:    Pop Corporation   Soda Company   Item   Debit   Credit   Debit   Credit   Cash & Accounts Receivable   $ 15,400           $ 21,600             Inventory     165,000             35,000             Land     80,000             40,000             Buildings & Equipment     340,000             260,000             Investment in Soda Company…

On December 31, 20X1, Par Inc reported total assets of $860,203, while Sub Corp reported total assets of $171,991. The fair values of Sub's assets and liabilities on the same date were $214421 and $49,313 respectively. On the morning of January 1, 20x2, Par agreed to acquire 100% of Sub for a total value of 86.25% of Sub for a total value of $286,678 by paying cash. On the consolidated balance sheet immediately after the acquisition, what should be the total assets reported by the combined entity under the fair-value-enterprise (FVE) method? a. $955,218 b. $979,099 Oc. $1,002,979 Od. $1,026.860 O e. $931,338 On January 1, 20X1, Par inc acquires 79.05% of Sub Corp for $153,469 in cash. Immediately before the acquisition, the book value of Sub's identifiable net assets was $104,016 with a fair value of $116,806, while the book value of Par's net assets was $204.623. What will be the amount of total shareholders' equity on the consolidated balance sheet immediately after the acquisition…

Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $108,500. At that date, the noncontrolling interest had a fair value of $46,500 and Soda reported $70,000 of common stock outstanding and retained earnings of $30,000. The differential is assigned to buildings and equipment, which had a fair value $20,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $35,000 higher than book value and a remaining life of five years at the date of the business combination. Trial balances for the companies as of December 31, 20X3, are as follows:    Pop Corporation   Soda Company   Item   Debit   Credit   Debit   Credit   Cash & Accounts Receivable   $ 15,400           $ 21,600             Inventory     165,000             35,000             Land     80,000             40,000             Buildings & Equipment     340,000             260,000             Investment in Soda Company…

On January 1, 20x0, P Company purchased 80 percent of the outstanding shares of S Company by paying P650,000. On that date, S Company P300,000 capital stock and P500,000 retained earnings. An undervalued asset attributable to building amounting to P75,000 with a remaining life of 25 years. All other assets and liabilities of S Company had book value approximated their fair market value. On January 1, 20x1 P’s common stock and retained earnings amounted to P1,000,000 and P800,000, respectively, while S Company’s retained earnings is P600,000. The 20x1 net income and dividends using cost (or initial value) method that was as follows;                                   Net Income                          Dividends                         P Company                 P340,000                                P100,000                          S Company                 P150,000                                 P50,000 On April 1, 20x1, S Company sold equipment with book value of P30,000 to P…

On January 1 of the year of acquisition, Ashley Incorporated pays $300,000 for 60% of Marea Company's outstanding common stock in a purchase transaction. Marea reported common stock on that date of $250,000 with retained earnings of $100,000. Equipment, which had a ten-year remaining life, was undervalued in Marea's financial records by $20,000. During the due diligence process, it was discovered that Marea had a patent that was not on the books, but had a market value of $50,000. The patent has a useful life of 10 years. Marea earns income and pays cash dividends as follows: Year Net Income Dividends Paid Acquisition year $ 40,000 $ 15,000 First year $ 60,000 $ 20,000 Second year $ 90,000 $ 30,000 On the balance sheet at the end of the second year, what amount should be reported as noncontrolling interest in Marea Company at the end of the second year? Multiple Choice $250,000 $241,600 $276,000 $341,600