Advanced Accounting 14th Edition
14th Edition
ISBN: 9781260726442
Author: By Joe Ben Hoyle And Thomas Schaefer And Timothy Doupnik
Publisher: Mc Grawhill Education
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On January 1, 2023, Stream Company acquired 29 percent of the outstanding voting shares of Q-Video, Incorporated, for $680,000.
Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values
of $2.6 million and $634,000, respectively. A customer list compiled by Q-Video had an appraised value of $262,000, although it was
not recorded on its books. The expected remaining life of the customer list was five years with straight-line amortization deemed
appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill.
Q-Video generated net income of $298,000 in 2023 and a net loss of $102,000 in 2024. In each of these two years, Q-Video declared
and paid a cash dividend of $12,000 to its stockholders.
During 2023, Q-Video sold Inventory that had an original cost of $88,000 to Stream for $160,000. Of this balance, $80,000 was resold
to outsiders during 2023, and the…
On January 1, 2023, Stream Company acquired 25 percent of the outstanding voting shares of Q-Video, Incorporated, for $718,000. Q-
Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of
$1.8 million and $669,000, respectively. A customer list compiled by Q-Video had an appraised value of $234,000, although it was not
recorded on its books. The expected remaining life of the customer list was five years with straight-line amortization deemed
appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill.
Q-Video generated net Income of $222,000 in 2023 and a net loss of $147,000 in 2024. In each of these two years, Q-Video declared
and paid a cash dividend of $16,000 to its stockholders.
During 2023, Q-Video sold Inventory that had an original cost of $111,000 to Stream for $150,000. Of this balance, $75,000 was resold
to outsiders during 2023, and the…
On January 1, 2023, Stream Company acquired 30 percent of the outstanding voting shares of Q-Video, Incorporated, for $720,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $1.8 million and $772,000, respectively. A customer list compiled by Q-Video had an appraised value of $298,000, although it was not recorded on its books. The expected remaining life of the customer list was twenty five years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill.
Q-Video generated net income of $370,000 in 2023 and a net loss of $116,000 in 2024. In each of these two years, Q-Video declared and paid a cash dividend of $18,000 to its stockholders.
During 2023, Q-Video sold inventory that had an original cost of $100,040 to Stream for $164,000. Of this balance, $82,000 was resold to outsiders during 2023, and…
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- On January 1, 2023, Stream Company acquired 20 percent of the outstanding voting shares of Q-Video, Incorporated, for $774,000. Q- Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $2.2 million and $658,000, respectively. A customer list compiled by Q-Video had an appraised value of $360,000, although it was not recorded on its books. The expected remaining life of the customer list was five years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill. Q-Video generated net income of $316,000 in 2023 and a net loss of $130,000 in 2024. In each of these two years, Q-Video declared and paid a cash dividend of $18,000 to its stockholders. During 2023, Q-Video sold inventory that had an original cost of $84,000 to Stream for $150,000. Of this balance, $75,000 was resold to outsiders during 2023, and the…arrow_forwardOn January 1, 2017, Stream Company acquired 30 percent of the outstanding voting shares of Q-Video, Inc., for $770,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $1.9 million and $700,000, respectively. A customer list compiled by Q-Video had an appraised value of $300,000, although it was not recorded on its books. The expected remaining life of the customer list was five years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill. Q-Video generated net income of $250,000 in 2017 and a net loss of $100,000 in 2018. In each of these two years, Q-Video declared and paid a cash dividend of $15,000 to its stockholders. During 2017, Q-Video sold inventory that had an original cost of $100,000 to Stream for $160,000. Of this balance, $80,000 was resold to outsiders during 2017, and the remainder…arrow_forwardOn January 1, 2017, Stream Company acquired 30 percent of the outstanding voting shares of Q-Video, Inc., for $770,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $1.9 million and $700,000, respectively. A customer list compiled by Q-Video had an appraised value of $300,000, although it was not recorded on its books. The expected remaining life of the customer list was five years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill.Q-Video generated net income of $250,000 in 2017 and a net loss of $100,000 in 2018. In each of these two years, Q-Video declared and paid a cash dividend of $15,000 to its stockholders.During 2017, Q-Video sold inventory that had an original cost of $100,000 to Stream for $160,000. Of this balance, $80,000 was resold to outsiders during 2017, and the remainder was…arrow_forward
- On January 1, 2020, Waterway Corporation purchased 40% of the common shares of Wildhorse Company for $192,000. During the year, Wildhorse earned net income of $81,000 and paid dividends of $20,250.Prepare the entries for Waterway to record the purchase and any additional entries related to this investment in Wildhorse Company in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit (To record purchase of stock.) (To record receipt of dividends.) (To record revenue.)arrow_forwardM On January 1, 2023, Stream Company acquired 21 percent of the outstanding voting shares of Q-Video, Incorporated, for $718,000. Q- Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $2.6 million and $768,000, respectively. A customer list compiled by Q-Video had an appraised value of $312,000, although it was not recorded on its books. The expected remaining life of the customer list was six years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill Q-Video generated net income of $284,000 in 2023 and a net loss of $108,000 in 2024 In each of these two years, Q-Video declared and paid a cash dividend of $10,000 to its stockholders During 2023, Q-Video sold inventory that had an original cost of $80,000 to Stream for $160,000. Of this balance, $77,000 was resold to outsiders during 2023, and the…arrow_forwardOn January 1, 2020, Pharoah Corporation purchased 40% of the common shares of Novak Company for $201,000. During the year, Novak earned net income of $77,000 and paid dividends of $19,250.Prepare the entries for Pharoah to record the purchase and any additional entries related to this investment in Novak Company in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit (To record purchase of stock.) (To record receipt of dividends.) (To record revenue.)arrow_forward
- Tyler Company acquired all of Jasmine Company's outstanding stock on January 1, 2019, for $286,400 in cash. Jasmine had a book value of only $220,000 on that date. However, equipment (having an eight-year remaining life) was undervalued by $60,000 on Jasmine's financial records. A building with a 20-year remaining life was overvalued by $15,700. Subsequent to the acquisition, Jasmine reported the following: 2019 2020 2021 In accounting for this investment, Tyler has used the equity method. Selected accounts taken from the financial records of these two companies as of December 31, 2021, follow: Revenues-operating Net Income $ 74,400 62,500 47,800 Expenses Equipment (net) Buildings (net) Common stock Retained earnings, 12/31/21 a. b. C. d. Dividends Declared $10,000 40,000 20,000 e. f. Determine the following account balances as of December 31, 2021: (Input all amounts as positive values.) Investment in Jasmine Company Equity in Subsidiary Earnings Consolidated Net Income Consolidated…arrow_forwardBassett Inc. acquired all of the outstanding common stock of Brinkman Corp. on January 1, 2019, for $422,000. Equipment with a ten-year life was undervalued on Brinkman's financial records by $48,000. Brinkman also owned an unrecorded customer list with an assessed fair value of $71,000 and an estimated remaining life of five years. Brinkman earned reported net income of $185,000 in 2019 and $226,000 in 2020. Dividends of $75,000 were paid in each of these two years. Selected account balances as of December 31, 2021, for the two companies follow. Revenues Expenses Investment income Retained earnings, 1/1/21 Dividends paid Multiple Choice $806,000. $811,000. If the equity method had been applied, what would be the Investment in Brinkman Corp. account balance within the records of Bassett at the end of 2021? $863,000. $920,000. Bassett $1,120,000 $1,036,000. 500,000 Not given 850,000 132,000 Brinkman $860,000 600,000 Ø 650,000 80,000arrow_forwardOn January 1, 2020, Mickey Mouse Co. acquired 30,000 ordinary shares out of the 100,000 outstanding ordinary shares of Minnie Mouse Inc. for P5,000,000. Minnie Mouse’s assets and liabilities approximate their fair except for inventory which carrying amount was undervalued by P500,000; machinery is undervalued by P300,000. The remaining useful life of the machinery is 5-years. Minnie Mouse’s net assets has a book value of P10,000,000.On December 31, 2020, Minnie Mouse reported net income of P2,000,000 and declared and paid dividends of P800,000. On December 31, 2021, Minnie Mouse reported net income of P4,500,000 and declared and paid dividends of P1,600,000.How much is the carrying amount of Investment in Associate in 2021? 6,194,000 4,490,000 6,230,000 5,342,000arrow_forward
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