On January 1, 2015, Pomegranate Company acquired 80 % of the voting stock of Starfruit Company for $70,000,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was $9,400,000. Starfruit's book value was $11,600,000 at the date of acquisition. Starfruit's assets and liabilities were reported on its books at values approximating fai value, except its plant and equipment (10-year life, straight-line) was overvalued by $13,000,000. Starfruit Company had previously unreported intangible assets, with a market value of $16,000,000 and 5-year life, straight-line, which were capitalized following GAAP. Additional information:
Q: Accounting changes may be Multiple Choice O mandatory. voluntary. voluntary or mandatory.…
A: "Accounting changes" are modifications to an organization's reporting practices, estimations,…
Q: Data for the cost of direct materials for the month ended March 31, 2022, are as follows: Raw…
A: Cost of direct material used is the amount of material directly used in the manufacturing of…
Q: During February, $189,000 was pai to creditors on account, and purchases on account were $ 209,400.…
A: The accounts payable represent the credit balance due to be paid to suppliers. The accounts payable…
Q: Problem: Module 2 Textbook Problem 11 Learning Objective: 2-7 Show how different inventory cost flow…
A: FIFO --FIFO stands for first- in-first-out. It is a method of inventory valuation. In this method…
Q: Green Thumb Gardening is a small gardening service using activity-based costing to estimate costs…
A: Activity Rate:— It is the rate used to allocate manufacturing overhead cost to cost object under…
Q: a. 25000 shares of $100 par, 0.15 cumulative preferred stock b. 3500 bond of, 0.08 interest, Each…
A: Weighted Average Number of Common Shares (WANCS):The starting point is the number of shares on…
Q: Sol Limited. reported earnings of $510,000 in 20X8. The company has $91,000 of depreciation expense…
A: To calculate the income tax expense for 20X8, we need to consider the current year's taxable income…
Q: ances on March 31 irect materials used (in March) rect labor used (in March) werhead applied (March)…
A: The gross profit is the difference between the sale revenue and the total cost of the job soldThe…
Q: On January 1, 2023, Blossom Ltd. acquires a building at a cost of $200,000. The building is expected…
A: The revaluation is the accounting process under which the business entity determines the market…
Q: an has a simple discount note for $6,100, at an ordinary bank discount rate of 8.53%, for 40 days.…
A: Effective Interest Rate -The rate used to compute the real return on investment and interest rate…
Q: ! Required information Dwight Furniture makes desks specially designed for small spaces, such as…
A: Special Order Pricing is a technique used to calculate the lowest price of a product for which a…
Q: Problem 1-26 (Algo) (LO 1-2, 1-4, 1-5) On December 31, 2022, Akron, Incorporated, purchased 5…
A: Allocation & Annual amortization-12/31/2023WorkingPurchase price of 25% interest $96,000Add:…
Q: Determine the following for 2025. a. The number of shares to be used for calculating: (Round answers…
A: ANSWERBeginning outstanding shares = 877000Additional shares issued in April = 6520008%…
Q: Sheridan Products Limited leases property on which copper has been discovered. The lease provides…
A: A mining lease refers to the lease or an agreement that provides the desired company or the…
Q: The selling price per box for Cynthia's Cookies is $20.26. Fixed costs are $60,000 and the variable…
A: Break-even point (In units) or Break-even quantity = Fixed cost / (Selling price per unit -…
Q: Ramakrishnan, Incorporated, reported 2024 net income of $15 million and depreciation of $2,650,000.…
A: Cash flow statement:— It is one of the financial statements that shows change in cash and cash…
Q: The objective of general-purpose financial reporting is? to provide users with financial information…
A: Financial reporting refers to communicating financial information. There are two types of financial…
Q: On March 15, 2023, Helen purchased and placed in service a new Escalade. The purchase price of the…
A: To calculate the total depreciation deduction for the vehicle in 2023, we need to consider the…
Q: QUESTION 18 Assume that social security taxes a and state unemployment compensa employee's…
A: Employer withhold Social Security and Medicare taxes from employee's pay and contribute the same…
Q: Publix sold 1,000 units last month which yielded the income statement below. Sales…
A: Break even point :— It is the point of production where total cost is equal to total revenue. At…
Q: Cash Accounts receivable Notes receivable office supplies Prepaid insurance Equipment Accounts…
A: Financial Statement: The financial statements are the statements that are prepared by the business…
Q: Exercise 15-11 (Static) Computing inventory balances and over- or underapplied overhead LO P1, P2,…
A: The direct costs such as direct materials, direct labor and overhead applied are debited to work in…
Q: Changes in Net Working Capital are not only reflected in the firm's Balance Sheet but also in its…
A: Cash flow statement :— It is one of the financial statements that shows change in cash and cash…
Q: Blooming Flower Company was started in Year 1 when it acquired $60,500 cash from the issue of common…
A: Financial statement includes income statement, balance sheet, statement of cash flow, statement of…
Q: care e unemployment ral unemployment 1.5% 7 Wages Expense 5.4% 0.8% otal amount withheld from…
A: Payroll expenses is the gross wages along with the relevant taxes and withholding. The wages payable…
Q: Question Content Area Computer equipment was acquired at the beginning of the year at a cost of…
A: Depreciation: It is expense charged against the Assets over it's useful life.Straight line method of…
Q: The following information applies to Emily for 2021. Her filing status is single. Salary Interest…
A: Answer:- Taxable Income:- Every person's or business's compensation that is utilized to calculate…
Q: Selected accounts with some amounts omitted are as follows: Work in Process 23,100 Oct. 31 94,300…
A: FACTORY OVERHEADFactory OH are all Indirect Manufacturing Cost.Factory OH Cost Includes Indirect…
Q: In a payroll processing DFD, the "prepare reports" activity will be represented by will be…
A: A graphical depiction of the data flow inside a payroll system is called a Payroll Processing Data…
Q: Kerriman Company provides the following ABC costing information: Activities Account inquiry hours…
A: The activity rate is calculated as the estimated activity costs divided by the activity usage. The…
Q: 1. Prepare the company's income statement for the year ended June 30, 2024. 1. Net Loss $(9,500) 2.…
A: Financial statement means statement which shows the financial position as on date and financial…
Q: Roarie LLC issued 10,000, $1,000 bonds on January 1, 2020. The bonds have a 10-year term and pay…
A: Bonds offers periodic interest and pays the principal amount at maturity. When the bonds are issued…
Q: Given the following tax structure, what minimum tax would need to be assessed on Shameika to make…
A: In a progressive tax, the tax is rises when taxable income increases.Taxpayers with greater salaries…
Q: Fickel Company has two manufacturing departments-Assembly and Testing & Packaging. The predetermined…
A: Manufacturing Costs:These costs include both direct and indirect expenses associated with the…
Q: Please help with this Accounting type Question: If immediate payment is not made to a partner taking…
A: Partnership -A partnership is a type of corporate structure in which two or more individuals…
Q: Team Spirit Calendars imprints calendars with college names. The company has fixed expenses of…
A: The breakeven point (in units or sales revenue) is a point of no-profit, no-loss. At breakeven point…
Q: On January 1, 2019, Calvert Company issues 11%, $100,000 face value bonds for $103,587.53, a price…
A: Lets understand the basics.Premium of discount on issue of bond can be amortized using,(1) Effective…
Q: Sweeten Company had no jobs in progress at the beginning of the year and no beginning inventories.…
A: The pre-determined overhead rate is calculated as the estimated overhead costs divided by the…
Q: Required: a. Silva Corporation has $168,000 taxable income for its tax year ended December 31, 2017.…
A: Case (a) - Silva Corporation (Tax Year ended December 31, 2017):CalculationAmountTaxable…
Q: Last month when Holiday Creations, Incorporated, sold 35,000 units, total sales were $140,000, total…
A: Contribution margin is the difference between the sales and the variable cost. The contribution…
Q: aditional income statement format equals
A: The income statement is a financial statement which shows the total revenue and total expenditure of…
Q: Juett Company produces a single product. The cost of producing and selling a single unit of this…
A: Variable cost means the cost which vary with the level of output where as fixed cost remain fixed…
Q: The custodian of a $735 petty cash fund discovers that the fund has $157.50 in coins and currency…
A: The petty cash balance is maintained for day to day cash transactions of the business. It is small…
Q: Song earns $175,000 taxable income as an interior designer and is taxed at an average rate of 25…
A: Answer:- Income tax is basically the liability of the income earned by an entity which is paid to…
Q: On January 1, 2024, Presidio Company acquired 100 percent of the outstanding common stock of Mason…
A: Consolidated means combined, hence consolidated financial statements mean the total financial…
Q: Multiple Choice High activity level (September) Low activity level (May) Using the high-low method,…
A: Variable cost is the cost that changes with change in the activity of cost driver used. The variable…
Q: Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell…
A: Long-term investment -Assets designated for long-term holding by a person or business are known as…
Q: Required information Problem 7-42 (LO 7-2) (Algo) [The following information applies to the…
A: The capital gain on shares sold is the profit realized when the selling price of a stock exceeds its…
Q: Journalize the following sales transactions for Lulu's Boutique. Explanations are not required. The…
A: Journal entry is the procedure for initially documenting commercial transactions in the books of…
Q: Kimble, Sykes, and Gerard open an accounting practice on January 1, 2019, in Chicago, Illinois, to…
A: Let's go through the key points and transactions in the scenario:1. Initial Contributions (January…
Step by step
Solved in 3 steps with 4 images
- On January 1, 2015, Pomegranate Company acquired 80% of the voting stock of Starfruit Company for $47,100,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was 16,900,000. Starfruit's book value was $12,000,000 at the date of acquisition. Starfruit's assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10-year life, straight-line) was overvalued by $13,000,000, Starfruit Company had previously unreported intangible assets, with a market value of $16,000,000 and 5-year life, straight-line. which were capitalized following GAAP If Pomegranate follows IFRS and uses the alternative method of valuing the noncontrolling interest, at the date of acquisition the noncontrolling interest in Starfruit appears in the equity section of the consolidated balance sheet in the amount of O$7,800,000 O$6,300,000 O$3,000,000 O$1,300,000On January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company for $1,141,000 in cash. The price paid was proportionate to Sellinger’s total fair value, although at the acquisition date, Sellinger had a total book value of $1,380,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger’s accounting records by $240,000. On January 1, 2018, Palka acquired an additional 25 percent common stock equity interest in Sellinger Company for $415,000 in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger.During the two years following the acquisition, Sellinger reported the following net income and dividends:Show Palka’s journal entry to record its January 1, 2018, acquisition of an additional 25 percent ownership of Sellinger Company shares.Prepare a schedule showing Palka’s December 31, 2018, equity…On January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company for $1,666,000 in cash. The price paid was proportionate to Sellinger’s total fair value, although at the acquisition date, Sellinger had a total book value of $2,070,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger’s accounting records by $300,000. On January 1, 2018, Palka acquired an additional 25 percent common stock equity interest in Sellinger Company for $656,250 in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger. During the two years following the acquisition, Sellinger reported the following net income and dividends: 2017 2018 $525,000 $701,000 Net…
- On January 1, 2016, Adams Corporation acquired all of the stock of Baker Company. The fair value of Adams’ shares used in the exchange was $37,500,000. At the time of acquisition, the book value of Baker’s shareholders’ equity was $5,000,000, and the book value of Baker’s building (25-year life) exceeded its fair value by $1,000,000. From the date of acquisition to December 31, 2021, Baker had cumulative net income of $1,300,000. For 2022, Baker reported net income of $300,000. Adams uses the complete equity method to account for its investment in Baker. There is no goodwill impairment loss for the period 2016 through 2021, but there is impairment loss of $100,000 in 2022. Baker declared no dividends during the period 2016–2022. Required Prepare the working paper eliminating entries necessary to consolidate the financial statements of Adams and Baker at December 31, 2019. Enter numerical answers using all zeros (do not abbreviate in thousands or in millions).On June 30, 2016, Gab Company purchased 25% of the outstanding ordinary shares of IB Co. at a total cost of P2,100,000. The book value of IB Co.’s net assets on acquisition date was P7,200,000. For the following reasons, Gab was willing to pay more than book value for the IB Co. shares: IB Co. has depreciable assets with a current fair value of P180,000 more than their book value. These assets have a remaining useful life of 10 years. IB Co. owns a tract of land with a current fair value of P900,000 more than its carrying amount. All other identifiable tangible and intangible assets of IB Co. have current fair values that are equal to their carrying amounts. IB Co. reported net income of P1,620,000, earned evenly during the current year ended December 31, 2016. Also in the current year, it declared and paid cash dividends of P315,000 to its ordinary shareholders. Market value of IB Co.’s ordinary shares at December 31, 2016 is P9 million. Cabbage Company’s financial year-end is…On June 30, 2016, Gab Company purchased 25% of the outstanding ordinary shares of IB Co. at a total cost of P2,100,000. The book value of IB Co.’s net assets on acquisition date was P7,200,000. For the following reasons, Gab was willing to pay more than book value for the IB Co. shares: IB Co. has depreciable assets with a current fair value of P180,000 more than their book value. These assets have a remaining useful life of 10 years. IB Co. owns a tract of land with a current fair value of P900,000 more than its carrying amount. All other identifiable tangible and intangible assets of IB Co. have current fair values that are equal to their carrying amounts. IB Co. reported net income of P1,620,000, earned evenly during the current year ended December 31, 2016. Also in the current year, it declared and paid cash dividends of P315,000 to its ordinary shareholders. Market value of IB Co.’s ordinary shares at December 31, 2016 is P9 million. Cabbage Company’s financial year-end is…
- Python acquired 75% of Slither’s stock for $316 million in cash on January 2, 2015. The fair value of the noncontrolling interest in Slither was $89 million. Slither’s book value at that time was $120 million. The assets and liabilities reported on Slither’s balance sheet had balances that approximated fair value at the date of acquisition. However, Slither had previously unreported developed technology (10 year life, straight-line), valued at $40 million. There has been no impairment loss on the developed technology since acquisition. Goodwill was impaired $6 million in 2015, and a $3 million impairment loss should be recorded for 2016. It is now December 31, 2016. The trial balances of Python and Slither appear below. (in thousands) Python Dr (Cr) Slither Dr (Cr) Current assets $ 113,500 $ 35,000 Plant assets, net 1,200,000 500,000 Investment in Slither 323,800 – Liabilities (1,342,950) (387,000) Capital stock (40,000) (20,000) Retained earnings, Jan. 1 (215,000) (110,000)…Born Company acquires an 80% interest in Roland Company for $660,000 cash on January 1, 2017. The NCI has a fair value of $165,000. Any excess of cost over book value is attributed to goodwill. To help pay for the acquisition, Born Company issues 5,000 shares of its common stock with a fair value of $70 per share. Roland’s balance sheet on the date of the purchase is as follows: Assets Liabilities and Equity Cash . . . . . . . . . . . . . . . . . . . . $ 20,000 Inventory . . . . . . . . . . . . . . . . 140,000 Property, plant, andequipment (net). . . . . . . . . . 550,000 Total assets . . . . . . . . . . . . . $710,000 Current liabilities . . . . . . . $110,000 Bonds payable . . . . . . . . . 100,000 Common stock ($10 par) . . 200,000 Retained earnings . . . . .. . . 300,000 Total liabilities and equity $710,000 Controlling share of net income for 2017 is $150,000, net of the noncontrolling interest of $10,000. Born declares and pays dividends of $10,000, and Roland…On January 1, 2018, Johnsonville Enterprises, Inc., acquired 80 percent of Stayer Company’s outstanding common shares in exchange for $3,000,000 cash. The price paid for the 80 percent ownership interest was proportionately representative of the fair value of all of Stayer’s shares.At acquisition date, Stayer’s books showed assets of $4,200,000 and liabilities of $1,600,000. The recorded assets and liabilities had fair values equal to their individual book values except that a building (10-year remaining life) with book value of $195,000 had an appraised fair value of $345,000. Stayer’s books showed a $175,500 carrying amount for this building at the end of 2018.Also, at acquisition date Stayer possessed unrecorded technology processes (zero book value) with an estimated fair value of $1,000,000 and a 20-year remaining life. For 2018 Johnsonville reported net income of $650,000 (before recognition of Stayer’s income), and Stayer separately reported earnings of $350,000. During 2018,…
- Nascent, Inc., acquires 60 percent of Sea-Breeze Corporation for $414,000 cash on January 1, 2015. The remaining 40 percent of the Sea-Breeze shares traded near a total value of $276,000 both before and after the acquisition date. On January 1, 2015, Sea-Breeze had the following assets and liabilities:The companies’ financial statements for the year ending December 31, 2018, follow:Answer the following questions:a. How can the accountant determine that the parent has applied the initial value method?b. What is the annual excess amortization initially recognized in connection with this acquisition?c. If the parent had applied the equity method, what investment income would the parent have recorded in 2018?d. What amount should the parent report as retained earnings in its January 1, 2018, consolidated balance sheet?e. What is consolidated net income for 2018 and what amounts are attributable to the controlling and noncontrolling interests?f. Within consolidated statements at January 1,…Adams Corporation acquired 90 percent of the outstanding voting shares of Barstow, Inc., on December 31, 2016. Adams paid a total of $603,000 in cash for these shares. The 10 percent noncontrolling interest shares traded on a daily basis at fair value of $67,000 both before and after Adams’s acquisition. On December 31, 2016, Barstow had the following account balances: Book Value Fair Value Current assets $ 160,000 $ 160,000 Land 120,000 150,000 Buildings (10-year remaining life) 220,000 200,000 Equipment (5-year remaining life) 160,000 200,000 Patents (10-year remaining life) 0 50,000 Notes payable (due in 5 years) (200,000 ) (180,000 ) Common stock (180,000 ) Retained earnings, 12/31/16 (280,000 ) December 31, 2018, adjusted trial balances for the two companies follow: AdamsCorporation Barstow,Inc. Debits Current assets $ 610,000 $ 250,000 Land…Goodfellas acquired 70% of the 200,000 equity shares of Badfellas, its only subsidiary, on 1 April 2018 when the retained earnings of Badfellas were $450,000. The carrying amounts of Badfellas' net assets at the date of acquisition were equal to their fair values apart from a building which had a carrying amount of $600,000 and a fair value of $850,000. The remaining useful life of the building at the acquisition date was 40 years. Goodfellas measures non-controlling interest at fair value, based on share price. The market value of Badfellas shares at the date of acquisition was $1.75. At 31 March 20X9 the retained earnings of Badfellas were $750,000. At what amount should the non- controlling interest appear in the consolidated statement of financial position of Goodfellas at 31 March 20X9? Select one alternative $135,000 $188,750 $195,000 $193,125