![GB 112/212 MANAGERIAL ACC. W/ACCESS >C<](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260218831/9781260218831_smallCoverImage.gif)
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Question
Chapter A, Problem 10P
1.
To determine
Compute the amount of
2.
To determine
Journalize the entry related to acquisition of Company W in the books of Company D.
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Students have asked these similar questions
Computing
the amount of goodwill in an acquisition
On July 1, 2022 an investor paid $3,330,000 for 100% of the voting common stock of an investee. The transaction qualifies as a business combination. At that time, investee had the following
summarized balance sheet information:
July 1, 2022
$450,000
Current assets
Plant and equipment, net 2,520,000
Liabilities
1.260,000
Equity
1,710,000
On July 1, 2022, the fair value of the plant and equipment was $630,000 more than its carrying amount. The acquisition-date fair values approximated their recorded book values for all of the
remaining individual net assets of the investee. Related to this transaction, what amount of goodwill must the investor report in its post-acquisition consolidated balance sheet on July 1, 20227
$630,000
O$1,620,000
O$990,000
O$2,250,000
SUBSEQUENT TO DATE OF ACQUISITION
CHAPTER 3: CONSOLIDATION-
21. Patriotism Company purchased 70% of Strength Company on
January 2, 2022 for P420,000. At that date Strength had inventory
and plant assets with market values greater than book values in the
amount of P50,000 and P90,000, respectively. The inventory and
plant assets were assigned to have a remaining life of six months and
five years, respectively. Strength Company has 2022 income and
dividends of P160,000 and P60,000, respectively and 2023 income
and dividends of P210,000 and P80,000, respectively.
The balance of non-controlling interest account on December 31.
180,000
NU beg (420K 787. x30%.)
2023 must be:
a. P223,200
b. P276,000
P169,200
с.
d. P136,800
22. Jenny Company acquired 80% of the equity share capital of Smith
Constructing the Consolidated Balance Sheet at Acquisition
On January 1 of the current year, Healy Company purchased all of the common shares of Miller Company for $500,000 cash. Balance sheets of the two firms immediately after the acquisition follow:
During purchase negotiations, Miller's plant assets were appraised at $425,000 and all of its remaining assets and liabilities were appraised at values approximating their book values. Healy also concluded that an
additional $85,000 (for goodwill) demanded by Miller's shareholders was warranted because Miller's earning power was better than the industry average.
Prepare the consolidating adjustments and the consolidated balance sheet at acquisition.
Use negative signs with consolidating adjustment answers, when appropriate.
Current assets
Investment in Miller
Healy Miller Consolidating Consolidated
Company Company Adjustments Balance Sheet
$1,400,000 $80,000
$
500,000
3,000,000 410,000
Plant assets, net
Goodwill
Total assets
$4,900,000…
Chapter A Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. A - Prob. 1QCh. A - Explain the difference in accounting methods used...Ch. A - Explain how bonds held to maturity are reported on...Ch. A - Explain the application of the cost principle to...Ch. A - Under the fair value method, when and how does the...Ch. A - Under the equity method, why does the investor...Ch. A - Prob. 7QCh. A - Prob. 8QCh. A - Prob. 9QCh. A - Company X owns 40 percent of Company Y and...
Ch. A - Prob. 2MCQCh. A - Dividends received from stock that is reported as...Ch. A - Prob. 4MCQCh. A - Prob. 5MCQCh. A - When using the equity method of accounting, when...Ch. A - Prob. 7MCQCh. A - Prob. 8MCQCh. A - Which of the following is true regarding the...Ch. A - Prob. 10MCQCh. A - Matching Measurement and Reporting Methods Match...Ch. A - Prob. 2MECh. A - Prob. 3MECh. A - Prob. 4MECh. A - Prob. 5MECh. A - Prob. 6MECh. A - Prob. 7MECh. A - Prob. 8MECh. A - Prob. 9MECh. A - Prob. 10MECh. A - Prob. 11MECh. A - Prob. 1ECh. A - Prob. 2ECh. A - Recording Transactions in the Available-for-Sale...Ch. A - Prob. 4ECh. A - Prob. 5ECh. A - Reporting Gains and Losses in the Trading...Ch. A - Prob. 7ECh. A - Prob. 8ECh. A - Prob. 9ECh. A - Prob. 10ECh. A - Prob. 11ECh. A - Prob. 1PCh. A - Prob. 2PCh. A - Prob. 3PCh. A - Prob. 4PCh. A - Prob. 5PCh. A - Comparing Methods to Account for Various Levels of...Ch. A - Prob. 7PCh. A - Recording Investments for Significant Influence LO...Ch. A - Prob. 9PCh. A - Prob. 10PCh. A - Prob. 11PCh. A - Prob. 1APCh. A - Prob. 2APCh. A - Reporting Passive Investments During January 2017,...Ch. A - Prob. 4APCh. A - Prob. 5APCh. A - Prob. 6APCh. A - Prob. 1CONCh. A - Finding Financial Information Refer to the...Ch. A - Prob. 2CPCh. A - Prob. 3CPCh. A - Prob. 4CPCh. A - Prob. 5CPCh. A - Prob. 6CP
Knowledge Booster
Similar questions
- 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…arrow_forwardPamrod Manufacturing acquired all the assets and liabilities of Stafford Industries on January 1, 20X2, in exchange for 4,000 shares of Pamrod's $20 par value common stock. Balance sheet data for both companies just before the merger are given as follows: Balance Sheet Items Assets Cash Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Total Assets Liabilities and Equities Accounts Payable Bonds Payable Common Stock: $20 par value $5 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Pamrod Manufacturing Book Value $ 70,000 100,000 200,000 50,000 600,000} (250,000) $ 779,000 $ 50,000 300,000 200,000 40,000 180,000 $ 770,000 Fair Value 70,000 100,000 375,000 80,000 540,000 $1,165,000 $ 50,000 310,000 Stafford Industries Book Value $ 30,000 60,000 100,000 40,000 400,000 (150,000) $ 480,000 $ 10,000 150,000 100,000 20,000 200,000 $ 480,000 Fair Value $ 30,000 60,000 160,000 30,000 350,000 $630,000 $ 10,000 145,000…arrow_forwardCar Inc. wants to purchase the net assets of Paint Inc. for purposes of horizontal consolidation and will pay $750,000 cash for them. The balance sheet for Paint Inc. on the date of purchase is as follows: Assets Liabilities & Owners' Equity Book Value Fair Market Value Book Value Fair Market Value Cash $0 $0 A/P $75,000 $75,000 A/R 60,000 50,000 Notes Payable 25,000 25,000 Inventory 75,000 80,000 Mortgage Payable 50,000 50,000 Net Fixed Assets 150,000 200,000 Total Liabilities: $150,000 Patents 0 25,000 Common Stock 50,000 Retained Earnings 85,000 Total Equity: $135,000 Total Assets: $285,000 Total Liabilities & O.E.: $285,000 A) Prepare the journal entry amounts for this asset acquisition on the books of Car Inc. by entering the proper debit and credit amounts in the gray-shaded cells below. Account Debits Credits A/R Inventory Net…arrow_forward
- Merger In 2018, PepsiCo, Inc. acquired SodaStream, a sparkling water maker, for $6,686 million in cash. At the acquisition date, SodaStream's identifiable net assets had fair values as follows (in millions): Inventories Property, plant and equipment Intangible assets Other net assets Required Prepare the journal entry necessary to record this acquisition on PepsiCo's books, assuming it is reported as a merger. Note: Provide all answers in millions. Property, plant and equipment Intangible assets Goodwill $352 386 4,248 (186) Previous V V V V Inventories Other net assets To record acquisition of SodaStream. V Debit 352 386 4,248 1,886 0 0 Credit E 0x 0 0✓ 0✓ 6,686 X 186 ✔ R 5 T MacBook Air 7 8 Nextarrow_forwardIn 2018, PepsiCo, Inc. acquired SodaStream, a sparkling water maker, for $3,343 million in cash. At the acquisition date, SodaStream's identifiable net assets had fair values as follows (in millions): Inventories $176 Property, plant and equipment 193 Intangible assets 2,124 Other net assets (93) Required Prepare the journal entry necessary to record this acquisition on PepsiCo's books, assuming it is reported as a merger. Note: Provide all answers in millions. To record acquisition of SodaStream. くくくくくく Debit Creditarrow_forwardBlank Corporation acquired 100 percent of Faith Corporation’s common stock on December 31, 20X2, for $207,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Blank Corporation Faith Corporation Assets Cash $ 66,000 $ 36,000 Accounts Receivable 85,000 39,000 Inventory 107,000 65,000 Buildings and Equipment (net) 224,000 151,000 Investment in Faith Corporation Stock 207,000 Total Assets $ 689,000 $ 291,000 Liabilities and Stockholders’ Equity Accounts Payable $ 82,000 $ 23,000 Notes Payable 142,000 61,000 Common Stock 99,000 43,000 Retained Earnings 366,000 164,000 Total Liabilities and Stockholders’ Equity $ 689,000 $ 291,000 At the date of the business combination, the book values of Faith’s net assets and liabilities approximated fair value. Assume that Faith Corporation’s accumulated depreciation on buildings and equipment on the acquisition date was $16,000. Required:…arrow_forward
- Putin Company acquired the assets and assumed the liabilities of Joni Company on January 1, 2018, paying OMR 4,500,000 cash. Immediately prior to the acquisition, Joni Company's balance sheet was as follows: BOOK VALUE FAIR VALUE Accounts receivable 240,000 220,000 Inventory 290,000 320,000 Land 960,000 1,508,000 Buildings 1,020,000 1,392,000 Total 2,510,000 3,440,000 Accounts payable 270,000 270,000 Note payable 600,000 600,000 Common stock, $5 par 420,000 Other contributed capital…arrow_forwardEliminating Entries, Goodwill Polaris Company acquires all of the stock of SSC, Inc. for $60 million in cash. At the date of acquisition, SSC's current assets had a book value of $20 million, its noncurrent assets had a book value of $80 million, and its liabilities had a book value of $90 million. It is determined that the book values of SSC's net assets approximate fair value at the date of acquisition. SSC's shareholders' equity consists of capital stock of $2 million, retained earnings of $9 million (credit balance), and treasury stock of $1 million. Required Prepare the eliminating entries necessary to consolidate the balance sheet accounts of Polaris and SSC at the date of acquisition. Enter answers in millions. Description Ref. (E) Capital stock (R) Investment in SSC ¶ Debit Creditarrow_forward6. On April 1, X3, Yongquan Company acquired all the net assets of Qingquan Company by way of absorption and merger; Purchaser and recognized goodwill of $180,000 in the acquisition entry. Among the net assets of Qingquan Company on April 1, X3, there was an account of equipment The face value and tentative fair value are $200,000 and $240,000 respectively, with an estimated useful life of eight years, no residual value, straight-line method Set aside depreciation. On January 1, X4, Yongquan Company adjusted the provisional fair value of the acquisition date of the equipment to 2 $320,000. Which of the following statements is incorrect? (A) The amount of equipment that should be recognized on Yongquan's accounts on April 1, X3 is $240,000. (B) The disposal equipment benefit of $80,000 should be recognized on Yongquan's accounts on January 1, X4. (C) On January 1, X4, Yongquan's accounts should be adjusted to reduce retained earnings by $7,500. (D) On December 31, X3, the depreciation…arrow_forward
- 10 Company A acquired 100% of Company B on January 1 2018 at a premium to book value and wants to prepare a consolidated balance sheet for the combined entity as of December 31, 2018 The financial statements for each individual entity are for the period ending December 31, 2018. Balance Sheet Company A Company B Sales 400,000 250,000 Cost of Goods Sold (150,000) (100,000) Depreciation (30,000) (25,000) Net Income 220,000 125,000 Statement of Retained Earnings Beginning Balance 230,000 100,000 Net Income 220,000 125,000 Ending Balance 450,000 225,000 Balance Sheet Totals Cash 20,000 40,000 Accounts Receivable 30,000 25,000 Inventory 60,000 60,000…arrow_forwardOn July 1, 2022 the ABC Company acquired the net assets of XYZ Company for P8,000,000. The recorded assets and liabilities of XYZ Corporation on July 1, 2022, immediately before the acquisition are as follows: Cash P 800,000 Inventory 2,400,000 Property and equipment, net 4,800,000 Liabilities 1,800,000 On July 1, 2022 it was determined that the inventory of XYZ had a fair value of P1,900,000, and the property and equipment, net had a fair value of P5,600,000. What is the amount of goodwill (gain on bargain purchase) that will be reported in the books of ABC?arrow_forwardassuming the beginning of the year (20X3) balance in the Investment in A account is $716,000 complete the consolidated worksheet below. To ald in this, Information from Problem 4 is repeated below. Monroe Company purchased 80% of Adams Company on January 1, 20X1. The purchase price paid was $600,000. On that day, the book value of Adams was $500,000. Excess of cost over book value is due to goodwill. Included in Adams's income are intercompany sales to Monroe of $40,000 with a cost to Adams of $25,000. 30% of this inventory is on hand in the Monroe inventory at December 31, 20X3. In addition, inventory sold at a profit of $5,000 was in the inventory of Monroe at December 31, 20X2. Below are the balances of accounts of Monroe and Adams at December 31, 20x3. Consolidation Entries Consolidated Bal. Monroe Adams Dr. Cr. Sales $50,000 $250,000 CGS & Expenses $30,000 $150,000 Income from S. Income $100,000 NCI Controlling Interest Retained Earnings Jan 1, 10 $700,000 $190,000 Dividends…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning