INTERMEDIATE ACTG LOOSELEAF W/ ACCESS
10th Edition
ISBN: 9781264397488
Author: SPICELAND
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 10.8BE
To determine
Intangible Assets:
These are the long-term assets having no physical existence. However, the benefits provided by these assets are used by the company for a long period of time. Example: Patent, Trademark,
Acquisition Cost:
Acquisition cost is the total cost of the asset incurred to obtain an asset. Acquisition cost is also called as historical cost or original cost.
To Determine: The cost of the patent acquired by Corporation S in exchange for the common stock of Company N.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Question 1: Chapter 7
On 1 October 20X8 Pacemaker Co acquired 30 million of Vardine Co's 100 million shares in exchange for 75 million of its own shares. The fair value of Pacemaker Co's shares at the date of this share exchange was $1.60 each. Vardine Co's profit is subject to seasonal variation. Its profit for the year ended 31 March 20X9 was $100 million. $20 million of this profit was made from 1 April 20X8 to 30 September 20X8. Pacemaker Co has one subsidiary and no other investments apart from Vardine Co.
What amount will be shown as 'investment in associate' in the consolidated statement of financial position of Pacemaker Co as at 31 March 20X9?
Problem 12-13 (Algo) B Equity method [LO12-6, 12-7]
Northwest Paperboard Company, a paper and allied products manufacturer, was seeking to gain a foothold in Canada. Toward that end, the company bought 40% of the outstanding common shares of Vancouver Timber and Milling. Inc., on January 2, 2021, for $570
million.
At the date of purchase, the book value of Vancouver's net assets was $860 million. The book values and fair values for all balance sheet items were the same except for inventory and plant facilities. The fair value exceeded book value by $10 million for the inventory and by $15 million for the plant facilities
The estimated useful life of the plant facilities is 12 years. All inventory acquired was sold during 2021.
Vancouver reported net income of $190 million for the year ended December 31, 2021. Vancouver paid a cash dividend of $30 million.
Required:
1. Prepare all appropriate journal entries related to the investment during 2021.
2. What amount should Northwest report…
:09:40
Question 2 A company owns 2% of a publicly traded corporation. How should the value of the investment appear on the balance sheet of the investor? O A. at historical cost plus any dividend payments received over the life of the investment O B. at the original purchase price less an amount considered to be unrecoverable impairment OC at fair market value on the balance sheet date OD. at historical cost
Chapter 10 Solutions
INTERMEDIATE ACTG LOOSELEAF W/ ACCESS
Ch. 10 - Prob. 10.1QCh. 10 - Prob. 10.2QCh. 10 - Prob. 10.3QCh. 10 - Prob. 10.4QCh. 10 - Prob. 10.5QCh. 10 - Prob. 10.6QCh. 10 - When an asset is acquired and a note payable is...Ch. 10 - Explain how assets acquired in exchange for equity...Ch. 10 - Prob. 10.9QCh. 10 - What account is credited when a company receives...
Ch. 10 - Prob. 10.11QCh. 10 - Identify the two exceptions to valuing property,...Ch. 10 - In what situations is interest capitalized?Ch. 10 - Define average accumulated expenditures and...Ch. 10 - Explain the difference between the specific...Ch. 10 - Prob. 10.16QCh. 10 - Prob. 10.17QCh. 10 - Explain the accounting treatment of costs incurred...Ch. 10 - Explain the difference in the accounting treatment...Ch. 10 - Prob. 10.20QCh. 10 - Prob. 10.21QCh. 10 - Prob. 10.22QCh. 10 - Prob. 10.23QCh. 10 - Acquisition cost; machine LO101 Beavert on Lumber...Ch. 10 - Prob. 10.2BECh. 10 - Prob. 10.3BECh. 10 - Cost of a natural resource; asset retirement...Ch. 10 - Asset retirement obligation LO101 Refer to the...Ch. 10 - Prob. 10.6BECh. 10 - Prob. 10.8BECh. 10 - Prob. 10.11BECh. 10 - Nonmonetary exchange LO106 Refer to the situation...Ch. 10 - Nonmonetary exchange LO106 Refer to the situation...Ch. 10 - Prob. 10.14BECh. 10 - Prob. 10.15BECh. 10 - Research and development LO108 Maxtor Technology...Ch. 10 - Prob. 10.18BECh. 10 - Prob. 10.19BECh. 10 - Research and development; various types LO108...Ch. 10 - Prob. 10.21BECh. 10 - Acquisition cost; equipment LO101 Oaktree Company...Ch. 10 - Prob. 10.3ECh. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - Acquisition costs; noninterest-bearing note ...Ch. 10 - Prob. 10.11ECh. 10 - Prob. 10.14ECh. 10 - Nonmonetary exchange LO106 [This is a variation...Ch. 10 - Prob. 10.16ECh. 10 - Nonmonetary exchange LO106 [This is a variation...Ch. 10 - Prob. 10.18ECh. 10 - Prob. 10.19ECh. 10 - Prob. 10.20ECh. 10 - FASB codification research LO101, LO106, LO107,...Ch. 10 - Prob. 10.30ECh. 10 - Prob. 10.31ECh. 10 - Prob. 10.32ECh. 10 - Intangibles; start-up costs LO101, LO108 Freitas...Ch. 10 - Prob. 10.1PCh. 10 - Prob. 10.4PCh. 10 - Acquisition costs; journal entries LO101, LO103,...Ch. 10 - Prob. 10.6PCh. 10 - Prob. 10.8PCh. 10 - Prob. 10.9PCh. 10 - Judgment Case 101 Acquisition costs LO101, LO103,...Ch. 10 - Judgment Case 104 Interest capitalization LO107...Ch. 10 - Prob. 10.6DMPCh. 10 - Prob. 10.7DMPCh. 10 - Judgment Case 108 Research and development LO108...Ch. 10 - Prob. 10.9DMPCh. 10 - Prob. 10.11DMPCh. 10 - Prob. 10.13DMPCh. 10 - Prob. 10.15DMPCh. 10 - Prob. 10.16DMP
Knowledge Booster
Similar questions
- Editing 31 4 Question 3 E16.12 (LO 3) (Issuance, Exercise, and Forfeiture of Share Options) On January 1, 2022, Magilla SA granted share options to officers and key employees for the purchase of 20,000 of the company's C10 par ordinary shares at €25 per share. The options were exercisable by grantees still in the employ of the company within a 5-year period, beginning January 1, 2024, and ending December 31, 2028. The service period for this award is 2 years. Assume that the fair value option- pricing model determines total compensation expense to be €400,00o. On April 1, 2023, 3,000 options were forfeited when the employees resigned from the company. The market price of the ordinary shares was C35 per share on this date. On March 31, 2024, 12,000 options were exercised when the market price of the ordinary shares was C40 per share. Instructions Prenare iournal entries ton record issuance of the share options, forfeiture of the share options,arrow_forwardPROBLEM VII On July 1, 2019, Eya Company acquired 700,000 shares of Agas Company at a price of P13 per share. Eya estimated that the price paid include P1.50 premium in order to gain control over Agas. On this date, the fair values of Agas' identifiable assets and liabilities and their carrying values are given below: Book Value P2,000,000 9,000,000 P3,000,000 5,000,000 3,000,000 Fair Value P2,000,000 11,000,000 Current assets Property, plant and equipment Liabilities Ordinary shares, P5 par Retained earnings 1. Determine the amount of goodwill.arrow_forward12:16 x Question 1 Stock Investments Starfleet Corporation purchases 52,000 shares of common stock of Tinder Corp. as an investment. Record the investment on January 1, 2023, for $624,000. During 2023, Tinder Corp reported a total Net Income of $3,000,000 and paid total dividends of $900,000 to all shareholders. On December 31, 2023, the fair value of Tinder Corp stock was $14 per share. Listen 5. ☺ Assuming that the 52,000 shares represent a 13% interest in Tinder Corp., prepare any entries that Starfleet Corporation should make to account for its investment in Tinder stock during 2023. Blank #1 To complete the journal entries always include the debit account first and the credit accounts second. If you have a compound entry with multiple debit and or credit accounts include DR and CR to designate if you are debiting or crediting the account. See the example below remembering each line here is one line you are typing into. DR Equipment $100,000 CR Accounts Payable $50,000 CR Cash…arrow_forward
- :47 0.94 l White purchased 10% of an E its investee's 100,0o00 outstanding ordinary shares on January 1, 2022 for P1,000,000. On October 31, 2022, White company purchased 20,000 additional shares of the investee for P3,000,000. On the same date, the fair value of the 10% interest was P1,400,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value exceeds carrying amount by P640,000. The equipment has a remaining life of 5 years. The investee had not issued any additional shares for the year. The investee reported net income of P8,000,000 for the current year and paid P500,000 dividends. What amount should be reported on December 31 as investment in associate?arrow_forward2 3 4 5 6789E 01 10 11 RCC. Inc. has offered $870 million cash for all of the common stock in Universal Corporation. Based on recent market information, Universal is worth $730 million as an independent operation. For the merger to make economic sense for RCC, what would the minimum estimated present value of the enhancements from the merger have to be? MV as an independent operation Min. amount of synergies to justify the offer price Offer price ($m)arrow_forwardExercise 12-20 (Algo) Equity method; purchase; investee income; dividends [LO12-6] As a long-term investment at the beginning of the 2024 fiscal year, Florists International purchased 20% of Nursery Supplies Incorporated's 20 million shares for $69 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $40 million and distributed cash dividends of $1.50 per share. At the end of the year, the fair value of the shares is $65 million. L Required: Prepare the appropriate journal entries from the purchase through the end of the year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions, (i.e., 10,000,000 should be entered 10). View transaction list Journal entry worksheet 1 2 3 Record the inve Note: Enter debits b Transactions No journal entry required Cash Fair value adjustment Gain on investment (NI) Debit Prev…arrow_forward
- Exercise 12-20 (Algo) Equity method; purchase; Investee Income; dividends [LO12-6] As a long-term investment at the beginning of the 2024 fiscal year, Florists International purchased 25% of Nursery Supplies Incorporated's 20 million shares for $61 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $44 million and distributed cash dividends of $1.40 per share. At the end of the year, the fair value of the shares is $57 million. Required: Prepare the appropriate journal entries from the purchase through the end of the year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answer in millions, (i.e., 10,000,000 should be entered as 10). No 1 Transactions 1 Investment revenue Cash Answer is not complete. General Journal ** Debit 61,000,000 Credit 61,000,000arrow_forwardP10–32 Earnings per Share with Convertible Securities Punch Manufacturing Corporation owns 80 percent of the common shares of Short Retail Stores. The companies’ balance sheets as of December 31, 20X4, were as follows: Punch Manufacturing Corporation Short Retail Stores Cash $ 50,000 $ 30,000 Accounts Receivable 100,000 80,000 Inventory 260,000 120,000 Land 90,000 60,000 Buildings & Equipment 500,000 300,000 Less: Accumulated Depreciation (220,000) (120,000) Investment in Short Retail Stores 120,000 Total Assets $900,000 $470,000 Accounts Payable $ 40,000 $ 20,000 Bonds Payable 300,000 200,000 Preferred Stock ($10 par value) 200,000 100,000 Common Stock: $10 par value 150,000 $5 par value 100,000 Retained Earnings 210,000 50,000 Total Liabilities & Equity $900,000 $470,000 Short Retail’s 8 percent preferred stock is convertible into 12,000 shares of common stock, and its 10 percent bonds are convertible into 8,000 shares of common stock. Short reported net income of $49,200…arrow_forwardExercise 12-20 (Algo) Equity method; purchase; investee income; dividends [LO12-6] As a long-term investment at the beginning of the 2024 fiscal year, Florists International purchased 25% of Nursery Supplies Incorporated's 8 million shares for $62 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $48 million and distributed cash dividends of $2.50 per share. At the end of the year, the fair value of the shares is $58 million. Required: Prepare the appropriate journal entries from the purchase through the end of the year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions, (i.e., 10,000,000 should be entered as 10). No 1 2 3 4 Transactions 1 2 3 4 X Answer is not complete. General Journal Gain on investment (NI) X Cash Cash Debit 62✔ 12✔ 20 x 2 x Credit 62 12✔ 20 x 2 xarrow_forward
- uo 9:10 docs.google.com a * Ooredoo In. IFRS requires that cost of unsuccessful defending an intangible asset be capitalized True False All dividends, except for liquidating dividends, reduce the total shareholders' equity of a corporation * True False On January 1, 2019, a corporation issued 8% bonds with a face value of €60,000. These bonds mature in five years, and interest is paid semiannually on June 30 and December 31. The bonds were sold for €55,360 to yield 10%. Using the effective- interest method of computing interest, whatarrow_forwardCompensation expense answer Year 1 = 645,000 Year 2 = 810,000 Year 3 = 1,221,000 PROVIDE COMPUTATIONS 8. The year in which the share options vested to the entity’s employeesa. Year 1 c. Year 3b. Year 2 d. The option did not vest9. Share options outstanding at the end of year 2a. P822,000 c. P645,000b. P810,000 d. P430,000arrow_forwardAVAD PROBLEM 31 Cobarrubias Corporation had the following investment at FVTPL at the beginning of the current year: Fair Value ABC Corporation, 10,000 shares (originally cost P1,000,000). JKL Company, 20,000 shares (originally cost P500,000) - P1,200,000 450,000 During the current year, the following transactions occurred: Feb. 28 ABC Corporation declared a 3-for-2 share split. JKL Company declared a 20% share dividend. The market value of JKL Company on this date is P3.00. Apr 31 June 30 Sold 5,000 shares of JKL Company for P100,000, less brokers fee of P1,000. July 31 Sold 5,000 shares of ABC Corporation for P135. Sept 30 Received share rights to purchase one share of ABC Corporation for P100 per share. The company should tender five rights for every share acquired. The market price of ABC Corporation shares on this date is P140. Oct. 31 Exercise all the share rights from ABC Corporation. Dec. 31 The market value of the portfolio: ABC Corporation – P155 per share JKL Company - P36…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
