Homework Answers
| Particulars | Debit | Credit |
| Investment in Oak | 2000000 | |
| To Cash | 2000000 | |
| (being acquired 30% interest in Oak and investment recorded at equity method) | ||
| (Assumption goodwill already considered in consideration value) | ||
| Investment in Oak | 240000 | |
| To investment revenue | 240000 | |
| (being share of oak in earnings recorded as revenue) | ||
| Cash | 60000 | |
| To investment in Oak | 60000 | |
| (being share of dividend received reduced from investment) |
| Net income | 800000 |
| Share of Dok | 30% |
| Attributable income | 240000 |
| Dividend | 200000 |
| Share of Dok | 30% |
| Attributable to Dok | 60000 |
Investment in Oak
| Particulars | amount | particulars | amount |
| Cash | 2000000 | cash(dividend) | 60000 |
| Investment revenue | 240000 | balance | 2180000 |
| 2240000 | 2240000 |
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Prepare (Journal Enteries) & (T-accounts)
E2-5 Calculate income and investment balance allocation of excess to undervalued...
Q: just the journal entries and T account for the above question E 2-5 Calculate income...
Q: just the journal entries and T account for the above
question
E 2-5 Calculate income and investment balance allocation of excess to undervalued assets Dok Company acquired a 30 percent interest in Oak on January 1 for $2,000,000 cash. Assume the cost of the invest- ment equals the fair value of Oak's net assets. Dok assigned the $500,000 fair value over book value of the interest acquired to the following assets: Assume 305 Inventories $100.000 (sold in the current...
Calculate income and investment balance allocation of excess to undervalued assets Dok Company acquired a 30...
Calculate income and investment balance allocation of excess to undervalued assets Dok Company acquired a 30 percent interest in Oak on January 1 for $2,000,000 cash. Assume the cost of the investment equals the fair value of Oak’s net assets. Dok assigned the $500,000 fair value over book value of the interest acquired to the following assets: Inventories $100,000 (sold in the current year) Building $200,000 (4-year remaining life at January 1) Goodwill $200,000 During the year Oak reported net...
E2-5 Calouiate incoime and invostmont balance alfocation of excess to andervalued assots Pop Company acquired a...
E2-5 Calouiate incoime and invostmont balance alfocation of excess to andervalued assots Pop Company acquired a 30 percent interest in Son on January 1 for $500,000 cash. Assume the cost ot the investment eoualh the ti velue of San's net assets: Pop asigned the $125.00D excess of tair alue over book value ot the interest acquired to the following assets: Inventories Building Goodwill $25,000 (sold in the current year) $50,000 (4 year remaining life at January 1) $50,000 Daring the...
Problem II. On January 1, 2017, Parent Co. acquired 80% of Sub Inc. by paying $800,000....
Problem II. On January 1, 2017, Parent Co. acquired 80% of Sub Inc. by paying $800,000. Non-controlling interest was valued at $200,000. Sub reported common stock on that date of $520,000 with retained earnings of $352,000. A building was undervalued in the company's financial records by $18,000. This building had a ten-year (10) remaining useful life. Copyrights of $80,000 were not recognized in the subsidiary's records and should be amortized over 20 years. Sub earned net income and paid cash...
the amount of consolidated net income. the balance in the investment account on the parent's books...
the amount of consolidated net income. the balance in the investment account on the parent's books O total assets on the consolidated balance sheet Question 2 1 pts To effect a business combination, Proper Co. acquired all the outstanding common shares of Scapula Co, a business entity, for cash equal to the carrying amount of Scapula's net assets. The carrying amounts of Scapula's assets and liabilities approximated their fair values at the acquisition date, except that the carrying amount of...
a)prepare a computation and allocation schedule b)The entries to eliminate the investment account: Exercise 5-1 On...
a)prepare a computation and allocation schedule
b)The entries to eliminate the investment account:
Exercise 5-1 On January 1, 2013, Pam Company purchased an 85% Interest in Shaw Company for $542,200. On this date, Shaw Company had common stock of $403,400 and retained earnings of $138,800. An examination of Shaw Company's assets and liabilities revealed that their book value was equal to their fair value except for marketable securities and equipment: Marketable securities Equipment (net) Book Value $20,200 119,900 Fair Value...
PL Fortuna Company issued 70.000 shares of Spursteck with a fair value of SIS per share,...
PL Fortuna Company issued 70.000 shares of Spursteck with a fair value of SIS per share, for 80% of the outstanding shares of Acappella Company. The firms had the following separate balance sheets prior to the acquisition: Fortuna $2,100,000 4.600.000 Zoot Current assets Property, plant, and equipment (net) Goodwill Teulasts Acapella S 960,000 1.300.000 240.000 2.500.000 56,200.000 $ 800,000 $3.000.000 800,000 Liabilities and Stockholders' Equity Liabilities Common stock (51 ) Common stock is par Paid-in capital in excess of par...
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...
On 1/1/2016, Wilson buys 25% of Taylormade for $500,000 and accounts for the investment using the...
On 1/1/2016, Wilson buys 25% of Taylormade for $500,000 and accounts for the investment using the equity method. The carrying value of net assets at date of purchase totaled $1,800,000. Fair value and the carrying values of the acquired assets were same except for a factory with a 10 year useful life, which exceeded its carrying value by $150,000 and inventory which exceeded its carrying value by $50,000. The inventory was sold during 2016. (That is the fair value of...
On January 1, 2020, John Doe Enterprises (JDE) acquired a 55% interest in Tractors-R-Us Manufacturing, Inc....
On January 1, 2020, John Doe Enterprises (JDE) acquired a 55%
interest in Tractors-R-Us Manufacturing, Inc. (TMI). JDE paid for
the transaction with $3 million cash and 500,000 shares of JDE
common stock (par value $1.00 per share). At the time of the
acquisition, TMI's book value was $16,970,000.
On January 1, JDE stock has a market value of $14.90 per share
and there was no control premium in this transaction. Any
consideration transferred over book value is assigned to...
Q: just the journal entries and T account for the above
question
E 2-5 Calculate income and investment balance allocation of excess to undervalued assets Dok Company acquired a 30 percent interest in Oak on January 1 for $2,000,000 cash. Assume the cost of the invest- ment equals the fair value of Oak's net assets. Dok assigned the $500,000 fair value over book value of the interest acquired to the following assets: Assume 305 Inventories $100.000 (sold in the current...
E2-5 Calouiate incoime and invostmont balance alfocation of excess to andervalued assots Pop Company acquired a 30 percent interest in Son on January 1 for $500,000 cash. Assume the cost ot the investment eoualh the ti velue of San's net assets: Pop asigned the $125.00D excess of tair alue over book value ot the interest acquired to the following assets: Inventories Building Goodwill $25,000 (sold in the current year) $50,000 (4 year remaining life at January 1) $50,000 Daring the...
Problem II. On January 1, 2017, Parent Co. acquired 80% of Sub Inc. by paying $800,000. Non-controlling interest was valued at $200,000. Sub reported common stock on that date of $520,000 with retained earnings of $352,000. A building was undervalued in the company's financial records by $18,000. This building had a ten-year (10) remaining useful life. Copyrights of $80,000 were not recognized in the subsidiary's records and should be amortized over 20 years. Sub earned net income and paid cash...
the amount of consolidated net income. the balance in the investment account on the parent's books O total assets on the consolidated balance sheet Question 2 1 pts To effect a business combination, Proper Co. acquired all the outstanding common shares of Scapula Co, a business entity, for cash equal to the carrying amount of Scapula's net assets. The carrying amounts of Scapula's assets and liabilities approximated their fair values at the acquisition date, except that the carrying amount of...
a)prepare a computation and allocation schedule
b)The entries to eliminate the investment account:
Exercise 5-1 On January 1, 2013, Pam Company purchased an 85% Interest in Shaw Company for $542,200. On this date, Shaw Company had common stock of $403,400 and retained earnings of $138,800. An examination of Shaw Company's assets and liabilities revealed that their book value was equal to their fair value except for marketable securities and equipment: Marketable securities Equipment (net) Book Value $20,200 119,900 Fair Value...
PL Fortuna Company issued 70.000 shares of Spursteck with a fair value of SIS per share, for 80% of the outstanding shares of Acappella Company. The firms had the following separate balance sheets prior to the acquisition: Fortuna $2,100,000 4.600.000 Zoot Current assets Property, plant, and equipment (net) Goodwill Teulasts Acapella S 960,000 1.300.000 240.000 2.500.000 56,200.000 $ 800,000 $3.000.000 800,000 Liabilities and Stockholders' Equity Liabilities Common stock (51 ) Common stock is par Paid-in capital in excess of par...
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...
On January 1, 2020, John Doe Enterprises (JDE) acquired a 55%
interest in Tractors-R-Us Manufacturing, Inc. (TMI). JDE paid for
the transaction with $3 million cash and 500,000 shares of JDE
common stock (par value $1.00 per share). At the time of the
acquisition, TMI's book value was $16,970,000.
On January 1, JDE stock has a market value of $14.90 per share
and there was no control premium in this transaction. Any
consideration transferred over book value is assigned to...
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