Question 3(a) Explain the ways in which a company may expand by obtaining new assets.(b) Jamuna River Ltd purchased a parcel of assets and liabilities comprising abusiness directly from Lyneham Pty Ltd. The parcel of assets, measured at net fairvalue, consisted of:Balance of Accounts:($)_Plant150,000Land240,000Vehicles120,000Accounts receivable30,000Accounts payable(48,000)Total492,000Question 3 (Cont'd)Required:Prepare journal entries to record the acquisition by Jamuna River Ltd, assuming that:(i) The cost of acquisition was $600,000 cash.(ii) The cost of acquisition was $432,000 cash.

Ways of expansion. (1)If the current product has surplus demand then company may expand its…

Answered: Question 3 (a) Explain the ways in…

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 41E

See similar textbooks

Similar questions

Q1. Range Ltd acquired a business for the following consideration:– CashThe business being acquired had the following assets and liabilities as reported in the balance sheet (there were no contingent liabilities):– Land—Carrying amount Fair value$50000$90 000$150 000 – Shares in Range Ltd—Fair value$60 000 (Hint: it is the fair value of the consideration that is relevant)Liabilities– Bank loan– Creditors Assets– Plant and equipment– Motor vehicle$50 000$30 000$150 000 $30 000– (the plant and equipment and motor vehicle have fair value of $170 000and $30 000, respectively) HOW MUCH GOODWILL WAS ACQUIRED?Q2. On 1 January 2018, Bad Ltd acquired all the assets and liabilities of Wolf Ltd. Wolf Ltd has a number of operating divisions, including one whose major industry is the manufacture of toy trains, particularly models of trains of historical significance. The toy trains division is regarded as a CGU. In paying $2 million for the net assets of Wolf Ltd, Bad Ltd calculated that it had…
Show the solution in good accounting form Coronation company purchased an entity for 6,000,000 cash on January 31. The book value and fair value of the assets of the acquired entity as of the date of acquisition of follow: Question: What is the good arising from the acquisition? A. 4,450,000 B. 700,000 C. 2,450,000 D. 2,700,000
Question 1 The statement of comprehensive income and the statement of financial position disclosed relates to Jeffrey Ghana Limited. Jeffrey Ghana Limited Statement of Financial Position as at December 31, 2021 2020 2021 GH₵ GH₵ GH₵ GH₵ Non-current assets (cost) 300,000 380,000 Less Accumulated depreciation (60,000) 240,000 (45,000) 335,000 Investment 120,000 70,000 Current assets Inventory 96,000 100,000 Receivables 150,000 127,000 Bank 164,000 146,000 410,000 373,000 Total assets 770,000 778,000 Financed by: Stared capital 300,000 320,000 Income surplus 146,000 166,000 446,000 486,000 Non-current liability 10% Debenture 150,000 100,000 Current liabilities Payables 137,500 152,000 Taxation 36,500 40,000 174,000 192,000 Total…
Problem 1: Susan Company experienced the ff. transaction during the current year.1. Purchased machinery for P500, 000 cash.2. Purchased land and building for P5,500, 000 cash, including an appraiser’s fee of P100,000.An appraisal indicated fair value as follows.Land 2,000,0008Building 3,000,0005,000,0003. Invested in 5,000 shares of another entity at P100 per share. Subsequently, Susan Companyexchanged the 5,000 shares for delivery equipment.At the time of exchange, the share is quoted at 120 and the equipment has a list price ofP680,000. Motor vehicle registration has paid in the amount of P3,000.4. A certain equipment was donated by a shareholder to Susan Company.An independent appraisal of the equipment placed the fair value at P1,000,000 and the residualvalue at P100,000. Attorney’s fees and other legal expenses amounted to P25,000.5. Land and building acquired by issuing 60,000 shares of P100 par value.The share is quoted at P150 on the date of exchange and the asset acquired had…
The following are Statement of Financial Position and Statement of ComprehensiveIncome of Lala Electronics Sdn. Bhd.Table 3: Statement of Financial Position and Statement of Comprehensive Income of Lala Electronics Sdn. Bhd. Lala Electronics Sdn. Bhd. Statement of Financial Position as at 31/12/2020Non-Current Asset: RM RMInvestment 270,000Fixed Assets at cost 1,596,000Accumulated Depreciation (857,000)Net Book Value 739,000Current Asset:Cash 178,000Account Receivable 678,000Inventory 1,329,000Prepaid Expenses 56,000 2,241,000Total assets 3,250,000Current Liabilities:Account Payable 148,000Interest Payable 36,000Income Taxes Payable 448,000Other Accrued Liabilities 191,000Total Current Liabilities 823,000Long Term Liabilities:Bank Loan 631,000Total Liabilities 1,454,000Equity:Capital 782,000Appropriate Profit (RetainedEarnings) 1,014,000 1,796,0003,250,000Lala Electronics Sdn. Bhd. Statement of Comprehensive Income for the year ended 31/12/2020RM RM Sales 3,992,000(-) COGS…
E 2-5 Calculate income and investment balance allocation of excess to undervalued assets Pop Company acquired a 30 percent interest in Son on January 1 for $500,000 cash. Assume the cost of the investment equals the fair value of Son’s net assets. Pop assigned the $125,000 excess of fair value over book value of the interest acquired to the following assets: Inventories $25,000 (sold in the current year) Building $50,000 (4-year remaining life at January 1) Goodwill $50,000 During the year Son reported net income of $200,000 and paid $50,000 dividends. Required Determine Pop’s income from Son for the year. Determine the December 31 balance of the Investment in Son account.
Case 1: Accounting ChangesIt is important in accounting theory to be able to distinguish the types of accountingchanges:Required:a) If a public company desires to change from the sum-of-year’s-digits depreciationmethod to the straight-line method for its fixed assets, what type of accountingchange will this be? How would it be treated? Discuss the permissibility of thischange.b) If a public company obtained additional information about the service lives ofsome of its fixed assets that showed that the service lives previously used shouldbe shortened, what type of accounting change would this be? Include in yourdiscussion how the change should be reported in the income statement of theyear of the change and what disclosures should be made in the financialstatements or notes.
Assume that the Current Assets for Rain Co. as of Decebmer 31, 20Y8, are listed below. A. Assume further that the total Current Liabilites on the same date are $75,000. What is the amount of the working capital for Rain Co. on December 31, 20Y8? B. Assume further that the total Current Liabilites on the same date are $75,000. What is the amount of the working capital for Rain Co. on December 31, 20Y8? ASSETS Current assets: Cash $ 17,500 Temporary Investments 15,000 Accounts Receivable (net) 42,500 Inventories 72,000 Prepaid Expenses 3,000 Total current assets $150,000
QUESTION ONE The financial year of Company X starts from 1st. May every year. On 17th July 2022, X. ltd acquired the following non-current assets: Note: Land worth sh.990,000 (being part of 1,480,000) was acquired in cash, no land is on finance lease. The company's policy is to charge depreciation at the following rates: Cash/On Credit On Finance lease Hire Purchase Plant & Machinery 250,000 460,000 900,000 Land & Buildings 1,480,000 720,000 - Furniture 860,000 950,000 230,000 Motor vehicles 960,000 870,000 125,000 Other Fixtures & Fittings 654,000 620,000 860,000 Rate Land Nil Buildings 10 % on cost Plant and machinery 7% on reducing balance method. Motor vehicles, Fixtures & Fittings & Furniture 12% on reducing balance method. A proportionate charge is made in the year of purchase, sale, or revaluation of an asset. The following transactions took place: On 14th December 2022, the company decided to revalue its Land & buildings up to…
Question 3) On January 1, 2018, Jebreen Corp. acquired a 35% interest in Mirani Inc. for $290,000 in cash. On that date, Mirani Inc’s balance sheet disclosed net assets of $480,000. It also had an equipment that was undervalued in its books by $90,000 (remaining useful life is 20 years). It had also a building that was overvalued by $30,000 (remaining useful life is 15 years). Jebreen Corp. records the purchase based on the equity method. By the end of 2018, Mirani Inc. reported total inventory of $150,000. Out of this amount, 30% represented the remaining amount of an inventory that was purchased from Jebreen Corp during 2018. Mirani Inc. plans to sell this inventory in 2019. Assume that Mirani Inc. sold 80% of the total inventory purchased from Jebreen Corp. during 2018 in the same year. Assume further that, Jebreen Corp sold the inventory to Mirani Inc. at a markup of 50% of cost. During 2019, Mirani Inc. reported net income of $120,000 and declared and paid cash dividends of…
Scenery Company experienced the following transactions during the year: 1. Purchased machinery for P500,000 cash. 2. Purchased land and building for P5,500,000 cash, including an appraiser’s fee of P100,000. An appraisal indicated fair value as follows: Land 2,000,000 Building 3,000,000 3. Invested in 5,000 shares of another entity at P100 per share. Subsequently, the entity exchanged the 5,000 shares for a delivery equipment. At the time of the exchange, the shares is quoted at 120 and the equipment has a list price of P680,000. Motor vehicle registration was paid in the amount of P3,000. 4. A certain equipment was donated by a shareholder to the entity. An independent appraisal of the equipment placed the fair value at P1,000,000 and the residual value at P100,000. Attorney’s fees and other legal expenses amounted to P25,000. 5. Land and building were acquired by issuing 60,000 shares of P100 par value. The share is quoted at P150 on the date of exchange, and the assets acquired had…
required:1-prepare journal entries for pam corp to record its acquisition of sun corp, including all allocations to individual asset and liability accounts.2- prepare a balance sheet for pam corp on 1/2/2016 after the acquisition and disolution of Sun.

SEE MORE QUESTIONS

Recommended textbooks for you

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

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

Publisher:

Cengage Learning

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

Financial Reporting, Financial Statement Analysis…

Finance

ISBN:

9781285190907

Author:

James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:

Cengage Learning

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

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

Publisher:

Cengage Learning

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

Financial Reporting, Financial Statement Analysis…

Finance

ISBN:

9781285190907

Author:

James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:

Cengage Learning

Financial & Managerial Accounting

Accounting

ISBN:

9781285866307

Author:

Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS