Koch acquired 100% of O'Bannon on January 1, 2016. The transaction was not a bargain purchase....
Koch acquired 100% of O'Bannon on January 1, 2016. The transaction was not a bargain purchase. On the acquisition date, O'Bannon's Inventory had a book value of 49,228 and a fair value of 27,009. No intercompany inventory transaction occurred during 2016. Koch and O'Bannon both use the FIFO inventory cost flow assumption.
O'Bannon's inventory turns over approximately 10 times per year. What adjustment to Inventory must be made when preparing Koch's consolidated financial statements as of 12/31/2016?
Homework Answers
THERE IS NO ADJUSTMENT REQUIRED IN THE INVENTORY OF O'BANNON'S DURING PREPARATION OF KOCH'S CONSOLIDATED FINANCIAL STATEMENTS. THE BOOK VALUE OF THE INVENTORY I.E $49228 SHALL BE CONSIDERED IN WHOLE FOR CONSOLIDATION PURPOSE. HOWEVER, ADJUSTMENTS MIGHT HAVE BEEN NECESSITATED IF THERE WERE SOME INTERCOMPANY INVENTORY TRANSACTIONS AND THE INVENTORY AT END INCLUDED STOCK PURCHASED FROM KOCH.
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Koch acquired 100% of O'Bannon on January 1, 2016. The
transaction was not a bargain purchase....
Koch acquired 100% of O'Bannon on January 1, 2016. The transaction was not a bargain purchase....
Koch acquired 100% of O'Bannon on January 1, 2016. The transaction was not a bargain purchase. On the acquisition date, O'Bannon's Inventory had a book value of 44,621 and a fair value of 35,751. No intercompany inventory transaction occurred during 2016. Koch and O'Bannon both use the FIFO inventory cost flow assumption. O'Bannon's inventory turns over approximately 10 times per year. What AAP adjustment to Cost of Goods Sold must be made when preparing Koch's consolidated financial statements for 2016?
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of a Swiss company for 4.0 million Swiss francs (CHF), which is
indicative of book and fair value. At the acquisition date, the
exchange rate was $1.00 = CHF 1. On December 18, 2017, the book and
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Inventory
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Property, plant & equipment
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)
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