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correct answer is option C) 3
Entry to allocate the difference between book implied and book value is recorded on the consolidated statement workpaper. therefore correct answer is option C)
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QUESTION 1 The entry to allocate the amount of difference between book implied and book value...
The difference between the implied value and the book value of the company is calculated to be $200,000. Per review of...
The difference between the implied value and the book value of the company is calculated to be $200,000. Per review of the financial information provided by the company, the difference relates to tangibles and intangibles. Tangibles – Inventory and Property in the amount of $40,000 and $60,000 respectively. The remaining difference is associated with goodwill. Assuming that the inventory has not been sold, what would be the elimination entry to allocate this total difference in year of acquisition: a. Dr....
Problem #1 Phillins Company purchased a un interest in Standards Corporation for $2.340,000 on January 1. 2018. Sta...
Problem #1 Phillins Company purchased a un interest in Standards Corporation for $2.340,000 on January 1. 2018. Standards Corporation had $1,650,000 of common stock and $1,050,000 of retained earnings on that date. The following values were determined for Standards Corporation on the date of purchase: Inventory Land Book Value $240.000 2,400,000 1,620,000 Fair Value $300,000 2,700,000 1.800.000 Equipment Required: A. Prepare a computation and allocation schedule for the difference between the implied and book value in the consolidated statements workpaper....
1) The balance of common stock of S Co. at acquisition date was: * a) $1,625,000...
1) The balance of common stock of S Co. at acquisition
date was: *
a) $1,625,000
b) $1,850,000
c) $2,000,000
d) $1,960,000
2) The eliminating entries for a consolidated statements workpaper
on December 31, 2019, will include: *
a) Debit Investment in S Co. $2,080,000
b) Credit Retained Earnings $600,000
c) Credit Dividends Declared $160,000
d) Debit Dividend Income $128,000
3) The difference between implied and book value at acquisition
date was: *
a) $120,000
b) $175,000
c) $125,000
d)...
Exercise 5-4 On January 1, 2015, Porter Company purchased an 80% interest in Salem Company for...
Exercise 5-4 On January 1, 2015, Porter Company purchased an 80% interest in Salem Company for $262,600. On this date, Salem Company had common stock of $ 204,000 and retained earnings of $130,100. An examination of Salem Company's balance sheet revealed the following comparisons between book and fair values: Inventory Other current assets Equipment Land Book Value $30,000 50,600 305,800 199,100 Fair Value $35,200 54,300 356,100 199,100 (b) Prepare the January 1, 2015, consolidated financial statements workpaper entries to eliminate...
5-1 and 5-2 CISE 5-1 interest in Shaw Company for $540,000 Allocation of Cost LO 1...
5-1 and 5-2
CISE 5-1 interest in Shaw Company for $540,000 Allocation of Cost LO 1 LO3 On January 1, 2018, Pam Company purchased an 85% interest in Shaw Company On this date, Shaw Company had common stock of $400,000 and retained carnings of An examination of Shaw Company's assets and liabilities revealed that the equal to their fair value except for marketable securities and equipment: assets and liabilities revealed that their book value was Book Value Fair Value Marketable...
Calculate the difference between the value implied by the purchase price and book value in each of the separate cases below
[Ⅱ] Calculate the difference between the value implied by the purchase price and book value in each of the separate cases below
Case
Percent of Stock Owned
Investment
Cost
S Company Equity Balances
Common
Stock
Other
Contributed
Capital
Retained
Earnings
a.
100%
$1,200,000
$600,000
$350,000
$200,000
b.
85%
850,000
500,000
200,000
100,000
c.
90%
1,000,000
750,000
300,000
(250,000)
d.
60%
600,000
350,000
-0-
300,000
* Exercise 5-15 A 90% interest in Saxton Corporation was purchased by Palm Incorporated on January...
* Exercise 5-15 A 90% interest in Saxton Corporation was purchased by Palm Incorporated on January 2, 2014. The common stock balance of Saxton Corporation was $2,953,800 on this date, and the balance in retained earnings was The cost of the investment to Palm Incorporated was $3,774,000. The balance sheet information available for Saxton Corporation on the acquisition date revealed these values: Inventory (FIFO) Equipment (net) Land Book Value $687,400 1,988,100 1,630,600 Fair Value $798,200 1,988,100 1,961,300 The equipment was...
Exercise 4-5 On January 1, 2014, Plate Company purchased a 90% interest in the common stock...
Exercise 4-5 On January 1, 2014, Plate Company purchased a 90% interest in the common stock of Set Company for $597,840, an amount $20,400 in excess of the book value of equity acquired. The excess relates to the understatement of Set Company's land holdings. Excerpts from the consolidated retained earnings section of the consolidated statements workpaper for the year ended December 31, 2014, follow: 1/1/14 retained earnings Net income from above Set Company 171,200 119,700 (50,300 ) 240,600 Consolidated Balances...
QUESTION 4 Refer to question 3. For the difference associated with Property ($50,000). This is due...
QUESTION 4 Refer to question 3. For the difference associated with Property ($50,000). This is due to Property having a book and fair value amounting to $120,000 and $170,000 respectively (no residual value at the end). Assume that the Company uses 5 years to depreciate the life of its property (using straight line depreciation). What would be the amount of additional depreciation at the date of acquisition (1/1/2010): a. $34,000 b. $24,000 c. $10,000 d. No additional depreciation expense QUESTION...
On January 1, 2013, Point Corporation acquired an 80% interest in Sharp Company for $1,997,000. At that time Sharp Compa...
On January 1, 2013, Point Corporation acquired an 80% interest
in Sharp Company for $1,997,000. At that time Sharp Company had
common stock of $1,516,000 and retained earnings of $702,000. The
book values of Sharp Company’s assets and liabilities were equal to
their fair values except for land and bonds payable. The land had a
fair value of $99,000 and a book value of $81,000. The outstanding
bonds were issued at par value on January 1, 2008, pay 9% annually,...
Problem #1 Phillins Company purchased a un interest in Standards Corporation for $2.340,000 on January 1. 2018. Standards Corporation had $1,650,000 of common stock and $1,050,000 of retained earnings on that date. The following values were determined for Standards Corporation on the date of purchase: Inventory Land Book Value $240.000 2,400,000 1,620,000 Fair Value $300,000 2,700,000 1.800.000 Equipment Required: A. Prepare a computation and allocation schedule for the difference between the implied and book value in the consolidated statements workpaper....
1) The balance of common stock of S Co. at acquisition
date was: *
a) $1,625,000
b) $1,850,000
c) $2,000,000
d) $1,960,000
2) The eliminating entries for a consolidated statements workpaper
on December 31, 2019, will include: *
a) Debit Investment in S Co. $2,080,000
b) Credit Retained Earnings $600,000
c) Credit Dividends Declared $160,000
d) Debit Dividend Income $128,000
3) The difference between implied and book value at acquisition
date was: *
a) $120,000
b) $175,000
c) $125,000
d)...
Exercise 5-4 On January 1, 2015, Porter Company purchased an 80% interest in Salem Company for $262,600. On this date, Salem Company had common stock of $ 204,000 and retained earnings of $130,100. An examination of Salem Company's balance sheet revealed the following comparisons between book and fair values: Inventory Other current assets Equipment Land Book Value $30,000 50,600 305,800 199,100 Fair Value $35,200 54,300 356,100 199,100 (b) Prepare the January 1, 2015, consolidated financial statements workpaper entries to eliminate...
5-1 and 5-2
CISE 5-1 interest in Shaw Company for $540,000 Allocation of Cost LO 1 LO3 On January 1, 2018, Pam Company purchased an 85% interest in Shaw Company On this date, Shaw Company had common stock of $400,000 and retained carnings of An examination of Shaw Company's assets and liabilities revealed that the equal to their fair value except for marketable securities and equipment: assets and liabilities revealed that their book value was Book Value Fair Value Marketable...
* Exercise 5-15 A 90% interest in Saxton Corporation was purchased by Palm Incorporated on January 2, 2014. The common stock balance of Saxton Corporation was $2,953,800 on this date, and the balance in retained earnings was The cost of the investment to Palm Incorporated was $3,774,000. The balance sheet information available for Saxton Corporation on the acquisition date revealed these values: Inventory (FIFO) Equipment (net) Land Book Value $687,400 1,988,100 1,630,600 Fair Value $798,200 1,988,100 1,961,300 The equipment was...
Exercise 4-5 On January 1, 2014, Plate Company purchased a 90% interest in the common stock of Set Company for $597,840, an amount $20,400 in excess of the book value of equity acquired. The excess relates to the understatement of Set Company's land holdings. Excerpts from the consolidated retained earnings section of the consolidated statements workpaper for the year ended December 31, 2014, follow: 1/1/14 retained earnings Net income from above Set Company 171,200 119,700 (50,300 ) 240,600 Consolidated Balances...
QUESTION 4 Refer to question 3. For the difference associated with Property ($50,000). This is due to Property having a book and fair value amounting to $120,000 and $170,000 respectively (no residual value at the end). Assume that the Company uses 5 years to depreciate the life of its property (using straight line depreciation). What would be the amount of additional depreciation at the date of acquisition (1/1/2010): a. $34,000 b. $24,000 c. $10,000 d. No additional depreciation expense QUESTION...
On January 1, 2013, Point Corporation acquired an 80% interest
in Sharp Company for $1,997,000. At that time Sharp Company had
common stock of $1,516,000 and retained earnings of $702,000. The
book values of Sharp Company’s assets and liabilities were equal to
their fair values except for land and bonds payable. The land had a
fair value of $99,000 and a book value of $81,000. The outstanding
bonds were issued at par value on January 1, 2008, pay 9% annually,...
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