GEN COMBO ADVANCED ACCOUNTING; CONNECT ACCESS CARD
13th Edition
ISBN: 9781260087383
Author: Joe Ben Hoyle
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 23P
To determine
Identify the worksheet entries which are needed in connection with the consolidation of this asset.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
In January 1, 2015, Fun company purchased Company A for $40,000 in cash and paid immediately. Fun company assumed all of Company A's assets and assumed Company A's liabilities. company A has assets valued at $60,000 and liabilities valued at $50,000.
Question 2:
in 2016, fun company must test for the impairment of goodwill. Assume the only goodwill on fun company's books is from the acquisition of company A. Fun company determined that the goodwill has an estimated future cash flow of $25,000 and a fair market value of $20,000. Does fun company have to recognize an impairment? Why or why not?
If an impairment must be recognized, compute the impairment loss and record the journal entry.
ACTUAL QUESTION:
suppose that the estimated future cash flow of goodwill in question #2 is $32,000, while the fair market value continues to be $20,000. Does fun company have to recognize an impairment? Why or why not? If an impairment must be recognized, compute the impairment loss and record the…
Bell Corporation purchases all of the outstanding stock of Stockdon Corporation for $220,000 in cash on January 1, 2017. On the purchase date, Stockdon Corporation has the following condensed balance sheet: (attached)Any excess of book value over cost is attributable to the building, which is currently overstated on Stockdon’s books. All other assets and liabilities have book values equal to fair values. The building has an estimated 10-year life with no salvage value.The trial balances of the two companies on December 31, 2017, appear as follows: Bell StockdonCash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,000 143,000Inventory . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 60,000 30,000Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000 120,000Building (net) . . . . . . . . . . . . . . . . . .…
Parrot Company owns all the outstanding voting stock of Southern Manufacturing. On January 1, 2014, Parrot sold machinery to Southern at its book value of $24,000. Parrot had the machinery three years before selling it and used an eight-year straight-line depreciation method, with zero salvage value. Southern will use the straight-line depreciation method, and assumes the machine has five years remaining and no salvage value. In the 2014 consolidating working papers, the depreciation expense
A.
Decreased by $4,800.
B.
Increased by $4,800.
C.
Increased by $8,000.
D.
Required no adjustment.
Chapter 5 Solutions
GEN COMBO ADVANCED ACCOUNTING; CONNECT ACCESS CARD
Ch. 5 - Prob. 1QCh. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - James, Inc., sells inventory to Matthews Company,...Ch. 5 - Prob. 6QCh. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - Prob. 10Q
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - Use the same information as in problem (5) except...Ch. 5 - Angela, Inc., holds a 90 percent interest in Corby...Ch. 5 - Prob. 8PCh. 5 - Thomson Corporation owns 70 percent of the...Ch. 5 - Prob. 10PCh. 5 - What is the total of consolidated cost of goods...Ch. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - What is the consolidated total for inventory at...Ch. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 5 - Akron, Inc., owns all outstanding stock of Toledo...Ch. 5 - Prob. 22PCh. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 - Prob. 25PCh. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Following are financial statements for Moore...Ch. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Prob. 33PCh. 5 - Prob. 34PCh. 5 - Prob. 35PCh. 5 - Prob. 36PCh. 5 - Prob. 1DYSCh. 5 - Hamilton Hawks Players Association and Mr....
Knowledge Booster
Similar questions
- Plenny Corporation sold equipment to its 90%-owned subsidiary, Sourdough Corp., on January 1, 2014. Plenny sold the equipment for $100,000 when its book value was $75,000 and it had a 5-year remaining useful life with no expected salvage value. Straight-line depreciation is used by both companies. Separate balance sheets for Plenny and Sourdough included the following equipment and accumulated depreciation amounts on December 31, 2014: Plenny Sourdough Equipment $850,000 $300,000 Less: Accumulated depreciation (200,000) (60,000) Equipment-net $650,000 $240,000 Consolidated amounts for equipment and accumulated depreciation at December 31, 2014 were respectively A. $1,125,000 and $260,000. B. $1,125,000 and…arrow_forwardOn January 1, 2015, Schielanie company acquired a building to be held as investment property in a remote location for 7,500,000. After initial recognition, the entity measured the investment property using the cost model because the fair value cannot be measured reliably. On December 31, 2015, management assessed the building’s useful life at 50 years from the date of acquisition and presumed the residual value to be nil because the fair value cannot be determined reliably. At year end, the entity declined an unsolicited offer to purchase the building for 9,750,000. This is a one time offer that is unlikely to be repeated in the foreseeable future. What is the carrying amount of the building on December 31, 2015?arrow_forwardThe following information concerns the intangible assets of Epstein Corporation: a. On June 30, 2016, Epstein completed the acquisition of the Johnstone Corporation for $2,000,000 in cash. The fair value of the net identifiable assets of Johnstone was $1,700,000. b. Included in the assets purchased from Johnstone was a patent that was valued at $80,000. The remaining legal life of the patent was 13 years, but Epstein believes that the patent will only be useful for another eight years. c. Epstein acquired a franchise on October 1, 2016, by paying an initial franchise fee of $200,000. The contractual life of the franchise is 10 years. Required: 1. Prepare year-end adjusting journal entries to record amortization expense on the intangibles at December 31, 2016. 2. Prepare the intangible asset section of the December 31, 2016, balance sheet.arrow_forward
- On January 1, 2018, CRIMSON Company purchased machineries for P10,560,000 and depreciated it by the straight-line method using an estimated useful life of eight years with no salvage value. On January 1, 2021, CRIMSON determined that the machineries had a useful life of six years from the date of acquisition and will have a salvage value of P960,000. An accounting change was made in 2021 to reflect these additional data. How much should be the balance of the accumulated depreciation for these machineries on December 31, 2021? A. ₱ 6,160,000 B. ₱ 6,400,000 C. ₱ 7,040,000 D. ₱ 5,840,000arrow_forwardHarbor Company and Kate Company are two business proprietorships that are similar in many respects. One difference is that Harbor Company uses the straight-line method whereas Kate Company uses the declining-balance method at double the straight-line rate. On January 1, 2015, both companies acquired the depreciable assets: Asset Cost Salvage Value Useful Life Buildings Equipment $320,000 $20,000 40 years 10 years $110,000 $10,000 Including the appropriate depreciation charges, annual net income for the companies in the years 2015, 2016, and 2017 and total income for the 3 years were as follows. 2010 2011 2012 Total $8,400 Harbor Company Kate Company At December 31, 2017, the balance sheets of the two companies are similar except that Kate Company has $84,000 $90,000 $262,400 $68,000 $76,000 $85,000 $229,000 more cash than Harbor Company. Linda is a big investor who is interested in buying one of these companies; wants to have advice from you based on fair analysis. Required: (a)…arrow_forwardKingbird Assets Inc., a publicly listed company, has a building with an initial cost of $371,000. At December 31, 2023, the date of revaluation, accumulated depreciation amounted to $113,000. The fair value of the building, by comparing it with transactions involving similar assets, is assessed to be $283,800. On January 5, 2024, Kingbird sold the building for $278,800 cash. Prepare the journal entry to record the sale of the building after having used the revaluation model using the proportionate method.arrow_forward
- On January 1, 2020, Parent Corporation purchased equipment from its 70% owned subsidiary for $360,000. The total useful life of the equipment was 15 years when Sub originally purchased it on January 1, 2015 for $450,000. Both Parent and Sub use straight- line depreciation. Required: a. Prepare the December 31, 2020 consolidation entry in general journal format. 5. Prepare the December 31, 2023 consolidation entry in general journal format. c. Repeat requirement (b), assuming instead that this had been a downstream sale.arrow_forwardOn January 1, 2016, Jungle Company sold a machine to Safari Company for $30,000. The machine had an original cost of $24,000, and accumulated depreciation on the asset was $9,000 at the time of the sale. The machine has a 5-year remaining life and will be depreciated on a straight-line basis with no salvage value. Safari Company is an 80%-owned subsidiary of Jungle Company.1. Explain the adjustments that would have to be made to arrive at consolidated net income for the years 2016 through 2020 as a result of this sale.2. Prepare the elimination that would be required on the December 31, 2016, consolidated worksheet as a result of this sale. 3. Prepare the entry for the December 31, 2017, worksheet as a result of this sale.arrow_forwardIn January 1, 2015, Fun company purchased Company A for $40,000 in cash and paid immediately. Fun company assumed all of Company A's assets and assumed Company A's liabilities. company A has assets valued at $60,000 and liabilities valued at $50,000. question: what is the amount of GOODWILL that should be recorded on Fun company's books? provide the journal entry for the acquisition of company A. Make sure to include account classifications and label debits and credits. please show work so I can understand. Thanks!arrow_forward
- On January 1, 2014, Bigg Corporation sold equipment with a book value of $20,000 and a 10-year remaining useful life to its wholly-owned subsidiary, Little Corporation, for $30,000. Both Bigg and Little use the straight-line depreciation method, assuming no salvage value. On December 31, 2014, the separate company financial statements held the following balances associated with the equipment: Bigg Little Gain on sale of equipment $10,000 Depreciation expense $3,000 Equipment 30,000 Accumulated depreciation 3,000 A working paper entry to consolidate the financial statements of Bigg and Little on December 31,…arrow_forwardAvery Company acquires the net assets of Iowa Company on July 1, 2015. The net assets acquired include plant assets that are provisionally estimated to have a fair value of $600,000 with a 10-year usable life and no salvage value. Depreciation is recorded based on months in service. The remaining unallocated amount of the price paid is $300,000, which is recorded as goodwill. At the end of 2015, Avery prepares the following statements (includes Iowa Company for the last six months):In March 2016, the final estimated fair value of the acquired plant assets is $700,000 with no change in the estimate of useful life or salvage value. 1. Prepare any journal entries required inMarch 2016. 2. Prepare the revised balance sheet and income statement for 2015 that will be included in the 2016 comparative statements.arrow_forwardVictory Co. owned 90% of the voting common stock of Walker Co. On January 3, 2022, Victory sold equipment to Walker for $160,000. The equipment cost Victory $180,000. At the time of the transfer, the balance in accumulated depreciation was $36,000. The equipment had a remaining useful life of eight years and a zero salvage value. Both entities use the straight-line method of depreciation. At what amount should the equipment (net of depreciation) be included in the consolidated balance sheet dated December 31, 2022? $140.000 $132.800 $127.800 $126.000arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College