On January 1, 2XX1, Bargain Inc. acquired 100% of Wind Corporation for $9,750,000 cash. On that date, Willey's total stockholders' equity was $7,250,000. The following assets had fair values different from book values. Book Value Fair Value $14,500,000 250,000 6,250,000 Buildings and Land $13,500,000 Other Assets 625,000 Bonds Payable 7,500,000 Required Prepare the [E] and [A] consolidation entries on the date of the acquisition: Debit Credit 9,750,000 0 [A] Cash Equity investment (to record the [E] consolidation entry) Buildings and land Other assets Goodwill V V Bonds payable Cash (to record the [A] consolidation entry) Debit 14,500,000 250,000 4,000,000 0 0 0x 9,750,000 * Credit 0x 0x 0x 6,250,000 x 9,750,000 x

On January 1, 2XX1, Bargain Inc. acquired 100% of Wind Corporation for $9,750,000 cash. On that date, Willey's total stockholders' equity was $7,250,000. The following assets had fair values different from book values. Book Value Fair Value $14,500,000 250,000 6,250,000 Buildings and Land $13,500,000 Other Assets 625,000 Bonds Payable 7,500,000 Required Prepare the [E] and [A] consolidation entries on the date of the acquisition: Debit Credit 9,750,000 0 [A] Cash Equity investment (to record the [E] consolidation entry) Buildings and land Other assets Goodwill V V Bonds payable Cash (to record the [A] consolidation entry) Debit 14,500,000 250,000 4,000,000 0 0 0x 9,750,000 * Credit 0x 0x 0x 6,250,000 x 9,750,000 x

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 1BCRQ

See similar textbooks

Similar questions

On January 1, 2XX1, Bargain Inc. acquired 100% of Wind Corporation for $9,750,000 cash. On that date, Willey's total stockholders' equity was $7,250,000. The following assets had fair values different from book values. Book Value Fair Value Buildings and Land $13,500,000 $14,500,000 Other Assets Bonds Payable 625,000 250,000 7,500,000 6,250,000 Required Prepare the [E] and [A] consolidation entries on the date of the acquisition: [E] Debit Credit [A] V (to record the [E] consolidation entry) (to record the [A] consolidation entry) Debit Credit
On January 1, 2XX1, Bargain Inc. acquired 100% of Wind Corporation for $9,750,000 cash. On that date, Willey's total stockholders' equity was $7,250,000. The following assets had fair values different from book values. Book Value Fair Value Buildings and Land $13,500,000 $14,500,000 Other Assets 625,000 Bonds Payable 7,500,000 Required Prepare the [E] and [A] consolidation entries on the date of the acquisition: [E] Debit Credit 9,750,000 [A] Cash 250,000 6,250,000 Equity investment (to record the [E] consolidation entry) Buildings and land Other assets Goodwill Bonds payable Cash (to record the [A] consolidation entry). 0 Debit 14,500,000 250,000 4,000,000 0 0 0x 9,750,000 x Credit 0x 0x 0x 6,250,000 * 9,750,000 *
Planter Corporation used debentures with a par value of $644,000 to acquire 100 percent of Sorden Company's net assets on January 1, 20X2. On that date, the fair value of the bonds issued by Planter was $627,000. The following balance sheet data were reported by Sorden: Balance Sheet Item Assets Cash and Receivables Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Total Assets Liabilities and Equities Accounts Payable Common Stock Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Historical Cost $ 56,000 114,000 64,000 414,000 (154,000) 12,000 $ 506,000 $ 49,000 84,000 57,000 316,000 $ 506,000 Fair Value $ 48,000 182,000 92,000 290,000 $ 612,000 $ 49,000 Required: Prepare the journal entry that Planter recorded at the time of exchange. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
The equity accounts of Jordan Company total $2,000,000. On 1/1/X1, Davidson Company purchased 60% of Jordan for $1,985,000. The fair values of net assets are equal to book values. What are goodwill and noncontrolling interests amounts?
HELP ME
On January 1, 20X1, XYZ, Inc. purchased 70% of Set Corporation for $469,000. On that date the book value of the net assets of Set totaled $500,000. Based on the appraisal done at the time of the purchase, all assets and liabilities had book values equal to their fair values except as follows: Book Value Fair Value Inventory $100,000 $120,000 Land 75,000 85,000 Equipment (useful life 4 years) 125,000 165,000 The remaining excess of cost over book value was allocated to a patent with a 10-year useful life. During 20X1 XYZ reported net income of $200,000 and Set had net income of $100,000. What income from subsidiary did Promo include in its net income if Promo uses the simple equity method? a. $70,000 b. $42,000 c. $38,000 d. $110,000
On May 1, Burns Corporation acquired 100 percent of the outstanding ownership shares of Quigley Corporation in exchange for $733,000 cash. At the acquisition date, Quigley's book and fair values were as follows: Cash Receivables Inventory Land Building and equipment (net) Patented technology Total assets Accounts payable Long-term liabilities Common stock ($5 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders equity Total assets Book Value Fair Value $ 101,000 $ 101,000 229,000 229,000 254,000 323,000 157,500 118,500 330,000 409,000 0 220,000 Assets $1,071,500 $ 1,400,500 $ 146,000 $ 666,000 210,000 90,000 (40,500) $1,071,500 Burns directs Quigley to seek additional financing for expansion through a new long-term debt issue. Consequently, Quigley will issue a set of financial statements separate from that of its new parent to support its request for debt and accompanying regulatory filings. Quigley elects to apply pushdown accounting in order to…
On January 1, 20X6, Pumpkin Corporation acquired 70 percent of Spice Company's common stock for $210,000 cash. The fair value of the noncontrolling interest at that date was determined to be $90,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Cash Accounts Receivable Pumpkin $ 50,000 70,000 Spice $ 15,000 25,000 Inventory 30,000 20,000 Land 150,000 80,000 Buildings and Equipment 250,000 200,000 Less: Accumulated Depreciation (70,000) (20,000) Investment in Spice Co. 210,000 Total Assets $690,000 $320,000 Accounts Payable $ 40,000 $ 10,000 Bonds Payable 150,000 40,000 Common Stock 300,000 90,000 200,000 $690,000 180,000 $320,000 Retained Earnings Total Liabilities and Equity At the date of the business combination, the book values of Spice's assets and liabilities approximated fair value except for inventory, which had a fair value of $30,000, and land, which had a fair value of $95,000. Based on the preceding…
On May 1, Burns Corporation acquired 100 percent of the outstanding ownership shares of Quigley Corporation in exchange for $728,000 cash. At the acquisition date, Quigley's book and fair values were as follows: Cash Receivables Inventory Land Building and equipment (net) Patented technology Total assets Accounts payable Long-term liabilities Common stock ($5 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders equity Total assets Assets Book Value $ 112,000 $ 218,000 232,000 $ 177,000 323,000 0 $1,062,000 $ 162,500 $ 638,000 210,000 90,000 (38,500) $1,062,000 Burns directs Quigley to seek additional financing for expansion through a new long-term debt issue. Consequently, Quigley will issue a set of financial statements separate from that of its new parent to support its request for debt and accompanying regulatory filings. Quigley elects to apply pushdown accounting in order to show recent fair valuations for its assets. Prepare a separate…
On March 31, 2021, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $17,000,000 in cash. The book values and fair values of Barney’s assets and liabilities were as follows: Book Value FairValueCurrent assets $ 6,000,000 $7,500,000Property, plant, and equipment 11,000,000 14,000,000Other assets 1,000,000 1,500,000Current liabilities 4,000,000 4,000,000Long-term liabilities 6,000,000 5,500,000 Required:Calculate the amount paid for goodwill.
On January 1, 20X0, Pepper Corporation issued 10,000 of its $15 par value shares to acquire 45 percent of the shares of Salt Manufacturing. Salt Manufacturing’s balance sheet immediately before the acquisition contained the following items: SALT MANUFACTURING Balance Sheet January 1, 20X0 Book Value Fair Value Assets Cash and Receivables $ 48,000 $ 48,000 Land 77,000 87,000 Buildings and Equipment (net) 137,000 167,000 Patent 87,000 87,000 Total Assets 349,000 Liabilities & Equities Accounts Payable $ 153,000 153,000 Common Stock 143,000 Retained Earnings 53,000 Total Liabilities & Equities $ 349,000 On the date of the stock acquisition, Pepper's shares were selling at $40, and Salt Manufacturing’s buildings and equipment had a remaining economic life of 10 years. The amount of the differential assigned to goodwill is not impaired. In the two years following the stock acquisition, Salt Manufacturing reported net income of…
On January 1, 20X0, Pepper Corporation issued 10,000 of its $15 par value shares to acquire 45 percent of the shares of Salt Manufacturing. Salt Manufacturing’s balance sheet immediately before the acquisition contained the following items: SALT MANUFACTURING Balance Sheet January 1, 20X0 Book Value Fair Value Assets Cash and Receivables $ 48,000 $ 48,000 Land 77,000 87,000 Buildings and Equipment (net) 137,000 167,000 Patent 87,000 87,000 Total Assets 349,000 Liabilities & Equities Accounts Payable $ 153,000 153,000 Common Stock 143,000 Retained Earnings 53,000 Total Liabilities & Equities $ 349,000 On the date of the stock acquisition, Pepper's shares were selling at $40, and Salt Manufacturing’s buildings and equipment had a remaining economic life of 10 years. The amount of the differential assigned to goodwill is not impaired. In the two years following the stock acquisition, Salt Manufacturing reported net income of…