LooseLeaf for Advanced Accounting (Irwin Accounting) - Standalone book
13th Edition
ISBN: 9781259444951
Author: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Publisher: McGraw-Hill Education
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Chapter 7, Problem 24P
a.
To determine
Find the amount of
b.
To determine
Find the amounts which will be used to consolidate Company O with Company K at the date of acquisition.
c.
To determine
Identify the amount of
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King's Road recently acquired all of Oxford Corporation's stock and is now consolidating the financial data of this
new subsidiary. King's Road paid a total of $895,000 for Oxford, which has the following accounts:
Fair Value
$ 183,000
142,000
104,000
Tax Basis
$ 183,000
142,000
104,000
Accounts receivable
Inventory
Land
Buildings
Equipment
234,000
235,000
(245,000)
190,000
184,000
(245,000)
Liabilities
Required:
a. What amount of deferred tax liability arises in the acquisition?
b. What amounts will be used to consolidate Oxford with King's Road at the date of acquisition?
c. On a consolidated balance sheet prepared immediately after this takeover, how much goodwill should King's
Road recognize? Assume a 21 percent effective tax rate.
King's Road recently acquired all of Oxford Corporation's stock and is now consolidating the financial data of this
new subsidiary. King's Road paid a total of $850,000 for Oxford, which has the following accounts:
Fair Value
Tax Basis
$ 153,000
141,000
136,000
276,000
233,000
(281,000)
$ 153,000
141,000
136,000
221,000
160,000
(281,000)
Accounts receivable
Inventory
Land
Buildings
Equipment
Liabilities
a. What amount of deferred tax liability arises in the acquisition?
b. What amounts will be used to consolidate Oxford with King's Road at the date of acquisition?
c. On a consolidated balance sheet prepared immediately after this takeover, how much goodwill should King's
Road recognize? Assume a 21 percent effective tax rate.
King's Road recently acquired all of Oxford Corporation's stock and is now consolidating the financial data of this
new subsidiary. King's Road paid a total of $1,060,000 for Oxford, which has the following accounts:
Fair Value
Таx Basis
$ 139,000
228,000
103,000
295,750
298,750
(248,000)
$ 139,000
228,000
103,000
239,000
248,000
(248,000)
Accounts receivable
Inventory
Land
Buildings
Equipment
Liabilities
Required:
a. What amount of deferred tax liability arises in the acquisition?
b. What amounts will be used to consolidate Oxford with King's Road at the date of acquisition?
c. On a consolidated balance sheet prepared immediately after this takeover, how much goodwill should King's
Road recognize? Assume a 21 percent effective tax rate.
Chapter 7 Solutions
LooseLeaf for Advanced Accounting (Irwin Accounting) - Standalone book
Ch. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - Prob. 3QCh. 7 - How does the presence of an indirect ownership...Ch. 7 - Prob. 5QCh. 7 - In accounting for mutual ownerships, what is the...Ch. 7 - Prob. 7QCh. 7 - Prob. 8QCh. 7 - Prob. 9QCh. 7 - Prob. 10Q
Ch. 7 - Prob. 11QCh. 7 - Jones acquires Wilson, in part because the new...Ch. 7 - Prob. 13QCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Which of the following is correct for two...Ch. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Prob. 9PCh. 7 - Prob. 10PCh. 7 - Prob. 11PCh. 7 - Prob. 12PCh. 7 - Prob. 13PCh. 7 - Prob. 14PCh. 7 - On January 1, 2016, Uncle Company purchased 80...Ch. 7 - Prob. 16PCh. 7 - Prob. 17PCh. 7 - Prob. 18PCh. 7 - Prob. 19PCh. 7 - Clarke has a controlling interest in Rogerss...Ch. 7 - Prob. 21PCh. 7 - Prob. 22PCh. 7 - Prob. 23PCh. 7 - Prob. 24PCh. 7 - Prob. 25PCh. 7 - Prob. 26PCh. 7 - Prob. 27PCh. 7 - Prob. 28PCh. 7 - Prob. 29PCh. 7 - Prob. 1DYSCh. 7 - Prob. 2DYS
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