Aaron Company's books show current earnings of $439,000 and $48,000 in cash dividends. Zeese Company earns...
Aaron Company's books show current earnings of $439,000 and $48,000 in cash dividends. Zeese Company earns $187,000 in net income and declares $12,000 in dividends. Aaron has held a 70 percent interest in Zeese for several years, an investment with an acquisition-date excess fair over book value attributable solely to goodwill. Aaron uses the initial value method to account for these shares and includes dividend income in its internal earnings reports.
On January 1 of the current year, Zeese acquired in the open market $69,000 of Aaron’s 8 percent bonds. The bonds had originally been issued several years ago at 92, reflecting a 10 percent effective interest rate. On the date of purchase, the carrying amount of the bonds payable was $65,000. Zeese paid $61,000 based on a 12 percent effective interest rate over the remaining life of the bonds.
What is consolidated net income for this year?
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Aaron Company's books show current earnings of $439,000 and
$48,000 in cash dividends. Zeese Company earns...
Redfield Company reports current earnings of $412,000 while declaring $40,000 in cash dividends. Snedeker Company earns...
Redfield Company reports current earnings of $412,000 while declaring $40,000 in cash dividends. Snedeker Company earns $125,000 in net income and declares $10,000 in dividends. Redfield has held a 70 percent interest in Snedeker for several years, an investment with an acquisition-date excess fair over book value attributable solely to goodwill. Redfield uses the initial value method to account for these shares. On January 1 of the current year, Snedeker acquired in the open market $65,600 of Redfield’s 8 percent...
Large Ltd. purchased 80% of Small Company on January 1, Year 6, for $660,000, when the...
Large Ltd. purchased 80% of Small Company on January 1, Year 6, for $660,000, when the statement of financial position for Small showed common shares of $490,000 and retained earnings of $190,000. On that date, the inventory of Small was undervalued by $51,000, and a patent with an estimated remaining life of five years was overvalued by $76,000. Small reported the following subsequent to January 1, Year 6: Profit (Loss) Dividends Year 6 $ 116,000 $ 34,000 Year 7 (44,000...
Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2018 (768,000) (381,000) 380,000 182,000 (24,000) (230,000) % (108,000) Sales Cost of goo...
Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2018 (768,000) (381,000) 380,000 182,000 (24,000) (230,000) % (108,000) Sales Cost of goods sold Operating expenses Dividend income 204,000 69,000 Net incone $ (761,000) (230,000) 50,000 (451,000) 108,000) 40,000 Retained earnings, 1/1/18 Net income Dividends declared Retained earnings, 12/31/18 $(941,0) (519,000) Cash and receivables Inventory Investment in Davis $245,400 582,000 552,660 598,000 443,000 495 090 2,421,000 $1,427,0e0 72,000 220,000 Buildings (net) Equipment (net) 640,000...
Problem 5-33 (LO 5-2, 5-3, 5-4, 5-5, 5-7) On January 1, 2016, Monica Company acquired 70 percent of Young Company's...
Problem 5-33 (LO 5-2, 5-3, 5-4, 5-5, 5-7) On January 1, 2016, Monica Company acquired 70 percent of Young Company's outstanding common stock for $798,000. The fair value of the noncontrolling interest at the acquisition date was $342,000. Young reported stockholders' equity accounts on that date as follows: Common stock-$10 par value Additional paid-in capital Retained earnings $200,000 100,000 660,000 In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a...
The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...
The Holtz Corporation acquired 80 percent of the 100,000
outstanding voting shares of Devine, Inc., for $6.55 per share on
January 1, 2020. The remaining 20 percent of Devine’s shares also
traded actively at $6.55 per share before and after Holtz’s
acquisition. An appraisal made on that date determined that all
book values appropriately reflected the fair values of Devine’s
underlying accounts except that a building with a 5-year future
life was undervalued by $59,500 and a fully amortized trademark...
On January 1, 2021, Ackerman Company acquires 80% of Seidel Company for $1,917,440 in cash consideration....
On January 1, 2021, Ackerman Company acquires 80% of Seidel Company for $1,917,440 in cash consideration. The remaining 20 percent noncontrolling interest shares had an acquisition-date estimated fair value of $479,360. Seidel's acquisition-date total book value was $1,904,000. The fair value of Seidel's recorded assets and liabilities equaled their carrying amounts. However, Seidel had two unrecorded assets, a trademark with an indefinite life and estimated fair value of $274,400 and several customer relationships estimated to be worth $201,600 with four-year...
13 On January 1, 2021, Ackerman Company acquires 80% of Seidel Company for $1,848,960 in cash...
13 On January 1, 2021, Ackerman Company acquires 80% of Seidel Company for $1,848,960 in cash consideration. The remaining 20 percent noncontrolling interest shares had an acquisition-date estimated fair value of $462,240. Seidel's acquisition-date total book value was $1,836,000. 10 points The fair value of Seidel's recorded assets and liabilities equaled their carrying amounts. However, Seidel had two unrecorded assets- a trademark with an indefinite life and estimated fair value of $264,600 and several customer relationships estimated to be worth...
Prepare a 2018 consolidated income statement for Holtz and Devine. (Enter all amounts as positive values.)...
Prepare a 2018 consolidated income statement for Holtz and
Devine. (Enter all amounts as positive values.)
HOLTZ CORPORATION AND DEVINE, INC.
Consolidated Income Statement
For Year Ending December 31, 2018
Sales
Total expenses
0
$0
To noncontrolling interest
To Holtz Corporation
$0
If instead the noncontrolling interest shares of Devine had
traded for $4.50 surrounding Holtz’s acquisition date, what is the
impact on goodwill?
Goodwill
to
The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine,...
Plaza Company acquires an 80% interest in Scenic Company for $200,000 cash on January 1, 20X1....
Plaza Company acquires an 80% interest in Scenic Company for $200,000 cash on January 1, 20X1. On that date, Scenic’s equipment (remaining economic life of 5 years) is undervalued by $25,000; any excess of cost over book value is attributed to goodwill. Scenic’s balance sheet on the date of the purchase is as follows: Assets Liabilities and Equity Cash $ 30,000 Current liabilities $ 30,000 Inventory 30,000 Long-term liabilities 40,000 Property, (net) 210,000 Common Stock (no par) 150,000 Retained Earnings...
ProForm acquired 80 percent of ClipRite on June 30, 2020, for $1,280,000 in cash. Based on...
ProForm acquired 80 percent of ClipRite on June 30, 2020, for
$1,280,000 in cash. Based on ClipRite's acquisition-date fair
value, an unrecorded intangible of $560,000 was recognized and is
being amortized at the rate of $14,000 per year. No goodwill was
recognized in the acquisition. The noncontrolling interest fair
value was assessed at $320,000 at the acquisition date. The 2021
financial statements are as follows:
ProForm
ClipRite
Sales
$
(980,000
)
$
(960,000
)
Cost of goods sold
625,000
490,000...
Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2018 (768,000) (381,000) 380,000 182,000 (24,000) (230,000) % (108,000) Sales Cost of goods sold Operating expenses Dividend income 204,000 69,000 Net incone $ (761,000) (230,000) 50,000 (451,000) 108,000) 40,000 Retained earnings, 1/1/18 Net income Dividends declared Retained earnings, 12/31/18 $(941,0) (519,000) Cash and receivables Inventory Investment in Davis $245,400 582,000 552,660 598,000 443,000 495 090 2,421,000 $1,427,0e0 72,000 220,000 Buildings (net) Equipment (net) 640,000...
Problem 5-33 (LO 5-2, 5-3, 5-4, 5-5, 5-7) On January 1, 2016, Monica Company acquired 70 percent of Young Company's outstanding common stock for $798,000. The fair value of the noncontrolling interest at the acquisition date was $342,000. Young reported stockholders' equity accounts on that date as follows: Common stock-$10 par value Additional paid-in capital Retained earnings $200,000 100,000 660,000 In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a...
The Holtz Corporation acquired 80 percent of the 100,000
outstanding voting shares of Devine, Inc., for $6.55 per share on
January 1, 2020. The remaining 20 percent of Devine’s shares also
traded actively at $6.55 per share before and after Holtz’s
acquisition. An appraisal made on that date determined that all
book values appropriately reflected the fair values of Devine’s
underlying accounts except that a building with a 5-year future
life was undervalued by $59,500 and a fully amortized trademark...
On January 1, 2021, Ackerman Company acquires 80% of Seidel Company for $1,917,440 in cash consideration. The remaining 20 percent noncontrolling interest shares had an acquisition-date estimated fair value of $479,360. Seidel's acquisition-date total book value was $1,904,000. The fair value of Seidel's recorded assets and liabilities equaled their carrying amounts. However, Seidel had two unrecorded assets, a trademark with an indefinite life and estimated fair value of $274,400 and several customer relationships estimated to be worth $201,600 with four-year...
13 On January 1, 2021, Ackerman Company acquires 80% of Seidel Company for $1,848,960 in cash consideration. The remaining 20 percent noncontrolling interest shares had an acquisition-date estimated fair value of $462,240. Seidel's acquisition-date total book value was $1,836,000. 10 points The fair value of Seidel's recorded assets and liabilities equaled their carrying amounts. However, Seidel had two unrecorded assets- a trademark with an indefinite life and estimated fair value of $264,600 and several customer relationships estimated to be worth...
Prepare a 2018 consolidated income statement for Holtz and
Devine. (Enter all amounts as positive values.)
HOLTZ CORPORATION AND DEVINE, INC.
Consolidated Income Statement
For Year Ending December 31, 2018
Sales
Total expenses
0
$0
To noncontrolling interest
To Holtz Corporation
$0
If instead the noncontrolling interest shares of Devine had
traded for $4.50 surrounding Holtz’s acquisition date, what is the
impact on goodwill?
Goodwill
to
The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine,...
ProForm acquired 80 percent of ClipRite on June 30, 2020, for
$1,280,000 in cash. Based on ClipRite's acquisition-date fair
value, an unrecorded intangible of $560,000 was recognized and is
being amortized at the rate of $14,000 per year. No goodwill was
recognized in the acquisition. The noncontrolling interest fair
value was assessed at $320,000 at the acquisition date. The 2021
financial statements are as follows:
ProForm
ClipRite
Sales
$
(980,000
)
$
(960,000
)
Cost of goods sold
625,000
490,000...
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