ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 7, Problem 7.1.1E
To determine
Concept Introduction:
The intercompany transactions occur when the unit of legal entity is having transactions with another unit of the similar entity. This transaction can be divided into two categories such as direct and indirect intercompany transfer. The direct transfer occurs when there is transfer between the different units of the same entity and indirect transfer occurs when the unit of entity acquires debt or assets issued to unrelated entity through another unit of the same entity. This type of transfer will help the entity in improving the flow of finance and asset in efficient manner.
:
The carrying amount of equipment to be recorded in consolidated
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If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition:
REQUIREMENTS:A. GoodwillB. Consolidated Total Assets at the date of acquisitionC. Consolidated Total Liabilities at the date of acquisitionD. Consolidated Equity at the date of acquisition
Required information
(The folowing information applies to the questions displayed below.]
Pumpworks Inc. and Seaworthy Rope Company agreed to merge on January 1, 20X3. On the date of the
merger agreement, the companies reported the following data:
Seaworthy Rope Company
Book
Value
Pumpworks
Fair
Balance
Sheet Items
Assets
Cash &
Receivables
Inventory
Land
Plant &
Equipment
Less:
Accumulated (131,000)
Depreciation
Total Assets$ 601,000
Liabilities
& Equities
Current
Liabilities
Fair
Value
Book Value
Value
$ 189,000
$109,000
$ 19,000
$ 19,000
107,000
107,000
168,000
160,000
29,000
9,000
41,000
14,000
409,000
309,000
219,000
123,000
picture
picture
(71,000)
$746,000
$205,000
$197,000
$ 77,000
$ 77,000
$ 28,000
$ 28,000
Capital
Stock
Capital in
Excess of
327,000
73,500
22,000
7,000
Par Value
Retained
Earnings
Total
Liabilities $ 601,000
& Equities
175,000
96,500
$205,000
Pumpworks has 10,900 shares of its $30 par value shares outstanding on January 1, 20X3, and Seaworthy
has 4,900 shares…
Box Company (the transferor company) and Cox Company (the transferee company) amalgamate
in an exchange of stock to form Cox & Box Company. The pre-amalgamation balance sheets
of Cox Company and Box Company are as follows:
1.
Вох Сompany
Сох Соmpany
* in million)
(® in million)
Fixed assets
25
10.0
Current assets
20
7.5
Total assets
Share capital (? 10 face value)
Reserves and surplus
Debt
45
17.5
20
5
10
10
15
2.5
45
17.5
For each share held in Box Company, two shares of Cox Company were given in exchange
(face value: 710, share premium: 720) as the market price of Cox's equity shares is 730. The
fair market value of the fixed assets and current assets of Box Company was assessed at ?20
million and 710 million, respectively. Prepare the post-amalgamation balance sheet of Cox &
Box Company under the 'pooling' and 'purchase' methods.
000
Chapter 7 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - Prob. 7.3QCh. 7 - Prob. 7.4QCh. 7 - Prob. 7.5QCh. 7 - Prob. 7.6QCh. 7 - Prob. 7.7QCh. 7 - Prob. 7.8QCh. 7 - Prob. 7.9QCh. 7 - Prob. 7.10Q
Ch. 7 - Prob. 7.11QCh. 7 - Prob. 7.12QCh. 7 - Prob. 7.13QCh. 7 - Prob. 7.14QCh. 7 - Prob. 7.15QCh. 7 - Prob. 7.16QCh. 7 - Prob. 7.17QCh. 7 - Prob. 7.18AQCh. 7 - Prob. 7.1CCh. 7 - Prob. 7.2CCh. 7 - Prob. 7.3CCh. 7 - Prob. 7.4CCh. 7 - Prob. 7.5CCh. 7 - Prob. 7.1.1ECh. 7 - Prob. 7.1.2ECh. 7 - Prob. 7.1.3ECh. 7 - Prob. 7.1.4ECh. 7 - Prob. 7.1.5ECh. 7 - Prob. 7.2.1ECh. 7 - Prob. 7.2.2ECh. 7 - Prob. 7.2.3ECh. 7 - Prob. 7.2.4ECh. 7 - Prob. 7.2.5ECh. 7 - Prob. 7.2.6ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.5ECh. 7 - Prob. 7.6ECh. 7 - Prob. 7.7ECh. 7 - Transfer of Depreciable Asset at Year-End Pitcher...Ch. 7 - Prob. 7.9ECh. 7 - Sale of Equipment to Subsidiary in Current Period...Ch. 7 - Prob. 7.11ECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Prob. 7.14ECh. 7 - Prob. 7.15ECh. 7 - Prob. 7.16ECh. 7 - Prob. 7.17ECh. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Prob. 7.20ECh. 7 - Prob. 7.21ECh. 7 - Prob. 7.22ECh. 7 - Prob. 7.23AECh. 7 - Prob. 7.24PCh. 7 - Prob. 7.25PCh. 7 - Prob. 7.26PCh. 7 - Prob. 7.27PCh. 7 - Prob. 7.28.1PCh. 7 - Prob. 7.28.2PCh. 7 - Prob. 7.28.3PCh. 7 - Prob. 7.28.4PCh. 7 - Prob. 7.29PCh. 7 - Prob. 7.30PCh. 7 - Prob. 7.31PCh. 7 - Prob. 7.32PCh. 7 - Prob. 7.33PCh. 7 - Prob. 7.34PCh. 7 - Prob. 7.35PCh. 7 - Prob. 7.37PCh. 7 - Prob. 7.38PCh. 7 - Prob. 7.41AP
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