Puncho Company is acquiring the net assets of Semos Company in exchange for common stock valued at $900,000. The Semos identifiable net assets have book and fair values of $400,000 and $800,000, respectively. Compare accounting for the acquisition (including assignment of the price paid) by Puncho with accounting for the sale by Semos.

On January 1, 2024, Morey, Incorporated, exchanged $180,575 for 25 percent of Amsterdam Corporation. Morey appropriately applied the equity method to this investment. At January 1, the book values of Amsterdam’s assets and liabilities approximated their fair values. On June 30, 2024, Morey paid $605,500 for an additional 70 percent of Amsterdam, thus increasing its overall ownership to 95 percent. The price paid for the 70 percent acquisition was proportionate to Amsterdam’s total fair value. At June 30, the carrying amounts of Amsterdam’s assets and liabilities approximated their fair values. Any remaining excess fair value was attributed to goodwill. Amsterdam reports the following amounts at December 31, 2024 (credit balances shown in parentheses): Revenues $ (291,000) Expenses 186,000 Retained earnings, January 1 (237,300) Dividends declared, October 1 10,000 Common stock (500,000) Amsterdam’s revenue and expenses were distributed evenly throughout the year, and no…

Phelps Co. uses the sophisticated equity method to account for the 80% investment in its subsidiary Shore Corp. At the time of the acquisition, the fair values of the net asset required approximated their book values.  Based upon the following information, what is consolidated net income? Phelps internally generated income: $250,000 Shore internally generated income: $  50,000 Intercompany profit on Shore beginning inventory: $  10,000 Intercompany profit on Shore ending inventory: $  15,000   a. $300,000 b. $295,000 c. $286,000 d. $305,000

Professor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31, 20X4, for $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation Investment in Scholar Corporation Total Assets Accounts Payable Mortgage Payable Common Stock Retained Earnings Total Liabilities & Stockholders' Equity Assets Cash Professor Scholar Corporation Corporation $50,300 Accounts receivable Inventory Land Buildings and equipment Less: Accumulated depreciation Investment in Scholar Corporation Total Assets Liabilities & Equity Accounts payable Mortgage payable Common stock Retained earnings NCI in Net assets of Scholar Corporation Total Liabilities & Equity 90,000 130,000 60,000 410,000 (150,000) 102,200 $ 692,500 $152,500 250,000…