Subsidiary Acquired for Cash Fineline Pencil Company acquired 80 percent of Smudge Eraser Corporation's stock on January 2, 20X3, for $72,000 cash. Summarized balance sheet data for the companies on December 31, 20X2, are as follows: Fineline Pencil Company Smudge Eraser Corporation Book Value Cash Other Assets Total Debits $200,000 400,000 $600,000 Fair Value $200,000 400,000 Book Value $50,000 120,000 $170,000 Fair Value $50,000 120,000 Current Liabilities Common Stock Retained Earnings Total Credits $100,000 300,000 200,000 $600,000 100,000 $80,000 50,000 40,000 $170,000 80,000 Required Prepare a consolidated balance sheet immediately following the acquisition.
Q: Spartan Inc. acquired 15% (90,000 shs) of the outstanding common stock of Buckeye Inc. on January 1,…
A: NOTE : As per BARTLEBY guidelines, when multiple questions are given then first question is to be…
Q: Positivism Corporation paid $150,000 for an 30% interest in Science Tech Corporation on January 1,…
A: When a buyer buys some business and pays more money compared to the net asset value received. The…
Q: 30. On January 1 2021 parent co. acquired 80% of subsidiary inc.’s outstanding stocks for 1,600,000…
A: In case of business combination we can measure the goodwill or bargain purchase using the below…
Q: What amount should be recorded as goodwill on the date of the purchase?
A: Goodwill on the date of acquisition = Purchase consideration - Fair value of assets acquired.
Q: Phlaire acquired 70 percent of Syanne on July 1, 20x5. Based on the purchase price, proportionate…
A: The question is related to Consolidated Financial Statements Required Determine the consolidated…
Q: Pepper Company acquired 80% of the voting stock of Salt Company on January 1, 20x1, when Salt…
A: Non-controlling interest refers to those shareholders of a company who have less than 50%…
Q: Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2.…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Determine the Total Assets as of December 31, 20x8.
A: Total assets are the assets which the company shows on its balance sheet on a particular date, which…
Q: Pepper Company acquired 80% of the voting stock of Salt Company on January 1, 20x1, when Salt…
A: Net Income is described as the amount which is left with the organization after it has paid for the…
Q: Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce…
A: When a company acquires another company, it pays the target company a purchase consideration,…
Q: Phlaire acquired 70 percent of Syanne on July 1, 20x5. Based on the purchase price, proportionate…
A: Upstream transaction is sale of goods by Subsidiary Co. to Parent Co. and Sales of goods by Parent…
Q: On January 5, 20x9, Parent Company acquired 80% of the outstanding shares of Subsidiary Company for…
A: On 05.01.20x9, Parent company acquired outstanding shares of Subsidiary company = 80% Purchase…
Q: Fortitude Company purchased an entity for P6,000,000 cash on January 31. The book value and fair…
A: Goodwill is an intangible asset for the firm which can be arise only at the time of purchase of the…
Q: Peanut Company acquired 80 percent of Snoopy Company's outstanding common stock for $300,000 on…
A: The parent company will report the “investment in subsidiary” as an asset, with the subsidiary.…
Q: ProLock acquired all of the stock of Senyo for $15,000,000. At the date of acquisition, Senyo’s…
A: The process of recording business transactions in the books of accounts for the first time is known…
Q: On January 5, 20x9, Parent Company acquired 80% of the outstanding shares of Subsidiary Company for…
A: Operating expense: It includes all expenses incurred while conducting normal business operations.…
Q: Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce…
A: Goodwill is the excess amount paid over and above the book value of the assets in the business.
Q: Top Corporation acquired 100% of Sun Corporation’s common stock on December 31,20x2. Balance sheet…
A: Given, T corporation acquired 100% of S corporation.
Q: On January 5, 20x9, Parent Company acquired 80% of the outstanding shares of Subsidiary Company for…
A: Non-controlling interest is also termed as minority interest which shall refer to those…
Q: Inc. purchased 81% of the voting shares of S Inc for $696,143 cash on January 1, year 2. P recorded…
A: In case one company over take the assets and liabilities of another company , then accounting for…
Q: Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2.…
A: The consolidated statements of a company is prepared when two or more companies are joining together…
Q: Axel Corporation acquires 100% of the stock of Wheal Company on December 31, Year 4. The following…
A: Journal entry is the primary entry that records the transaction initially.
Q: Phlaire acquired 70 percent of Syanne on July 1, 20x5. Based on the purchase price, proportionate…
A: The question is related to Consolidated Financial Statements. Required Determine the consolidated…
Q: During the current year, Brewer Company acquired all of the outstanding common stock of Miller Inc.…
A: Solution: Under the Acquisition method, majority cases of the Buyer or Purchaser are recorded the…
Q: Tinsel Co has 5 million $1 issued ordinary shares. At 1 May 20X0 Fairy Co purchased 60% of Tinsel…
A: Goodwill is calculated by deducting fair value of asset acquired from the amount paid for…
Q: Which investment method did Patrick use to compute the $286,570 income from O'Brien? Determine the…
A: 1.computation of income from O'Brien.
Q: Purchase at More than Book Value Ramrod Manufacturing acquired all the assets and liabilities of…
A: An acquisition occurs when one company purchases the majority of all of the stock of another company…
Q: Pepper Company acquired 80% of the voting stock of Salt Company on January 1, 20x1, when Salt…
A: Consolidated Gross Profit:- It is the combined gross profit of the parent company and subsidiary…
Q: Phlaire acquired 70 percent of Syanne on July 1, 20x5. Based on the purchase price, proportionate…
A: The (NCI) non-controlling interest indicates the share of the owned company or subsidiary that the…
Q: Unforgettable Company acquired the net assets of Tua Company (100,000 outstanding sh) by issuing…
A: Note : We have assumed that no entry has been passed by Unforgettable company (transferee) for…
Q: Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2.…
A: Acquisition refers to the process of buying some portion of common stock in another business entity.
Q: Subsidiary 2,000,000 1,500,000 350,000 150,000 50,000 Parent Sales Gross Profit 550,000 200,000…
A: As per IFRS 3 'business combination', at the time of acquisition of bussiness all assets and…
Q: Power Corporation acquired 70 percent of Silk Corporation's common stock on December 31, 20x2.…
A: Goodwill is the amount of excess consideration paid over the fair value of the assets. Goodwill can…
Q: Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for…
A: Goodwill:Goodwill is an intangible asset. It is defined as the excess of cost of an acquired company…
Q: On-Ju Company acquired 90% interest in Southwest Company on December 31, 20x4 for P320,000. During…
A: In case one company overtake the assets and liabilities of another company , then accounting for…
Q: 8. CARNATION Company purchased an entity for P6,000,000 cash on 2 poi January 31. The book value and…
A: Goodwill is the amount paid over the fair value of the net asset acquired.
Q: Peanut Company acquired 80 percent of Snoopy Company’s outstanding common stock for $300,000 on…
A: Dividend from Snoopy Company = $ 49000 * 80% = $ 39200
Q: Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2.…
A: When an enterprise control another enterprise. In that case, the enterprise that its controlling is…
Q: High Company purchased for cash at P50 per share all 150,000 ordinary shares outstanding of another…
A: >Intangible assets are the assets that cannot be seen or touched and have no physical existence.…
Q: SFFN Corp. purchased the entire business of AZC, Inc. including all its assets and liabilities for…
A: goodwill to be recognized by SFFN as a result of its acquisition of AZC = purchase consideration…
Q: . Prepare journal entries for Axel Corp. to record the acquisition of Wheal Company
A: The acquisition is a form of consolidation between two or more companies. When one company takes…
Q: Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for…
A: Goodwill: It is an intangible asset that does not exist in physical form but has value in the…
Q: Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2.…
A: Goodwill is the premium amount paid over the net assets of the subsidiary company. Goodwill can be…
Q: Pagle Corporation established a subsidiary to enter into a new line of business considered to be…
A: Introduction: A journal entry is used to record a business transaction in the company's accounting…
Q: Power Corporation acquired 70 percent of Silk Corporation's common stock on December 31, 20x2.…
A: Inventory refers to the stock or merchandise which is in the selling condition or includes the…
Q: Hello Corp. acquired 80% of outstanding shares of Piknik Inc. the stock acquisition resulted to a…
A: The control premium is the excess paid by a buyer over the market price of a…
Q: Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for…
A:
Q: Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2.…
A: Comments; Multiple Questions asked Consolidation - When an enterprise controls another enterprise.…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- Pencil Company acquired 70 percent of Stylus Corporation’s stock on January 2, 20X3, for $85,400 cash. Summarized balance sheet data for the companies on December 31, 20X2, follow: Pencil Company Stylus Corporation Book Value Fair Value Book Value Fair Value Cash $ 202,000 $ 202,000 $ 65,000 $ 65,000 Other Assets 401,000 401,000 124,000 124,000 Total Debits $ 603,000 $ 189,000 Current Liabilities $ 87,000 87,000 $ 67,000 67,000 Common Stock 287,000 65,000 Retained Earnings 229,000 57,000 Total Credits $ 603,000 $ 189,000 Required: Prepare a consolidated balance sheet immediately following the acquisition.Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2. Balance sheet datafor the two companies immediately following acquisition follow: Item Cash PPower44,000 P Silk30,000 Accounts Receivable 110,000 45,000Inventory 130,000 70,000Land 80,000 25,000Buildings and equipment 500,000 400,000Less: Accumulated depreciation (223,000) (165,000)Investment in Silk Corporation stock 150,500Total Assets P 791,500 P 405,000Accounts payable P 61,500 P 28,000Taxes payable 95,000 37,000Bonds payable 280,000 200,000Common stock 150,000 50,000Retained earnings 205,000 90,000Total Liabilities and Stockholders’ Equity P 791,500 P 405,000After the date of the business combination, the book value of Silk’s net assets and liabilities approximated their fairvalue except for inventory, which had a fair value of P85,000, and land, which had a fair value of P45, 000. The fairvalue of the non-controlling interest was P64,500 on December 31, 20x2.For each of the question…Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2. Balance sheet datafor the two companies immediately following acquisition follow: Item Cash PPower44,000 P Silk30,000 Accounts Receivable 110,000 45,000Inventory 130,000 70,000Land 80,000 25,000Buildings and equipment 500,000 400,000Less: Accumulated depreciation (223,000) (165,000)Investment in Silk Corporation stock 150,500Total Assets P 791,500 P 405,000Accounts payable P 61,500 P 28,000Taxes payable 95,000 37,000Bonds payable 280,000 200,000Common stock 150,000 50,000Retained earnings 205,000 90,000Total Liabilities and Stockholders’ Equity P 791,500 P 405,000After the date of the business combination, the book value of Silk’s net assets and liabilities approximated their fairvalue except for inventory, which had a fair value of P85,000, and land, which had a fair value of P45, 000. The fairvalue of the non-controlling interest was P64,500 on December 31, 20x2.For each of the question…
- Blank Corporation acquired 100 percent of Faith Corporation’s common stock on December 31, 20X2, for $207,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Blank Corporation Faith Corporation Assets Cash $ 66,000 $ 36,000 Accounts Receivable 85,000 39,000 Inventory 107,000 65,000 Buildings and Equipment (net) 224,000 151,000 Investment in Faith Corporation Stock 207,000 Total Assets $ 689,000 $ 291,000 Liabilities and Stockholders’ Equity Accounts Payable $ 82,000 $ 23,000 Notes Payable 142,000 61,000 Common Stock 99,000 43,000 Retained Earnings 366,000 164,000 Total Liabilities and Stockholders’ Equity $ 689,000 $ 291,000 At the date of the business combination, the book values of Faith’s net assets and liabilities approximated fair value. Assume that Faith Corporation’s accumulated depreciation on buildings and equipment on the acquisition date was $16,000. Required:…Pace Corporation acquired 100 percent of Spin Company's common stock on January 1, 20X9. Balance sheet data for the two companies immediately following the acquisition follows: Item PaceCorporation SpinCompany Cash $ 30,000 $ 25,000 Accounts Receivable 80,000 40,000 Inventory 150,000 55,000 Land 65,000 40,000 Buildings and Equipment 260,000 160,000 Less: Accumulated Depreciation (120,000 ) (50,000 ) Investment in Spin Company Stock 150,000 Total Assets $ 615,000 $ 270,000 Accounts Payable $45,000 $33,000 Taxes Payable 20,000 8,000 Bonds Payable 200,000 100,000 Common Stock 50,000 20,000 Retained Earnings 300,000 109,000 Total Liabilities and Stockholders' Equity $ 615,000 $ 270,000 At the date of the business combination, the book values of…On December 31, 20X8, Parkway Corporation acquired 80 percent of Street Company's common stock for $104,000 cash. The fair value of the noncontrolling interest at that date was determined to be $26,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Parkway Corporation Street Company Cash $ 90,000 $ 20,000 Accounts Receivable 80,000 35,000 Inventory 100,000 40,000 Land 40,000 60,000 Buildings and Equipment 300,000 100,000 Less: Accumulated Depreciation (100,000) (40,000) Investment in Street Company 104,000 Total Assets $ 614,000 $ 215,000 Accounts Payable 120,000 30,000 Mortgage Payable 200,000 100,000 Common Stock 50,000 25,000 Retained Earnings 244,000 60,000 Total Liabilities and Equity $ 614,000 $ 215,000 On that date, the book values of Street's assets and liabilities approximated fair value except for inventory, which had a fair value of $45,000, and buildings and equipment,…
- P Markets Co. purchased 60% of S Ltd’s ordinary share capital on 1 January 20X4 for $540,000. The retained earnings of S Ltd at that date were $90,000. S Ltd’s share capital has remained unchanged since the acquisition. The additional information relates to the year ended 31 December 20X6. P Markets S $000 $000 Non-current assets Property plant and equipment 600 200Investments 540 Current assets Inventory 230 80 Trade receivables Bank 140 42 Bank 40…Redcliff Ltd acquired the entire share capital of ABC Ltd for $18,000 cash on 31 December 20X4.The balance sheets of the two companies as at that date were as follows: Redcliff Ltd ABC Ltd$ $ $Current assets 240,000 28,800Non-current assets:Investment in ABC at cost 18,000Other asset 96,000 114,000 9,600Total assets 354,000 38,400Current liabilities 198,000 20,400Net assets 156,000 18,000Paid-up capital 120,000 12,000Retained profits 36,000 6,000Owners’ equity 156,000 18,000Required:Prepare the consolidated balance sheet of Redcliff Ltd and its subsidiary as it 31 december 20X4.Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2. Balance sheet data for the two companies immediately following acquisition follow: Item Power Silk Cash P44,000 P30,000Accounts Receivable 110,000 45,000Inventory 130,000 70,000Land 80,000 25,000Buildings and equipment 500,000 400,000Less: Accumulated depreciation (223,000) (165,000)Investment in Silk Corporation stock 150,500Total Assets P 791,500 P 405,000 Accounts payable…
- Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2. Balance sheet data for the two companies immediately following acquisition follow: Item Power Silk Cash P44,000 P30,000Accounts Receivable 110,000 45,000Inventory 130,000 70,000Land 80,000 25,000Buildings and equipment 500,000 400,000Less: Accumulated depreciation (223,000) (165,000)Investment in Silk Corporation stock 150,500Total Assets P 791,500 P 405,000 Accounts payable…Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2. Balance sheet data for the two companies immediately following acquisition follow: Item Power Silk Cash P44,000 P30,000Accounts Receivable 110,000 45,000Inventory 130,000 70,000Land 80,000 25,000Buildings and equipment 500,000 400,000Less: Accumulated depreciation (223,000) (165,000)Investment in Silk Corporation stock 150,500Total Assets P 791,500 P 405,000 Accounts payable…Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2. Balance sheet data for the two companies immediately following acquisition follow: Item Power Silk Cash P44,000 P30,000Accounts Receivable 110,000 45,000Inventory 130,000 70,000Land 80,000 25,000Buildings and equipment 500,000 400,000Less: Accumulated depreciation (223,000) (165,000)Investment in Silk Corporation stock 150,500Total Assets P 791,500 P 405,000 Accounts payable…