On January 1, 2019, Palm Corporation acquired 70 percent of Smart Company's common stock for $210,000 cash, when the book value of Smart Company was $260,000. At the date of the business combination, the book values of Star's net assets and liabilities approximated fair value except for inventory, which had a book value of $140,000 and fair value of $145,000, and equipment, which had a book value of $200,000 and a fair value of $220,000. During 2019 50% of the goodwill was impaired. What is the value of goodwill on December 31, 20192
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- Below are Lebnas Corp.’s 2019 income statement and comparative balance sheet at 12/31/2019 and 12/31/2018. Additional information: On December 31, 2018, Lebnas acquired 25% of Island ’s common stock for $609,000. On that date, the carrying value of Island’s assets and liabilities, which approximated their fair values, was $2,435,000. Island reported income of $319,000 for the year ended December 31, 2019. No dividend income was received by Lebnas on Island’s common stock during the year 2019. During 2018, Lebnas loaned $797,500 to POI , an unrelated company. POI made the first semi-annual principal repayment of $72,500, plus interest at 10%, on December 31, 2018. POI is current on the loan as of December 31, 2019. On January 2, 2019, Lebnas sold equipment costing $145,000, with a carrying amount of $44,950 for cash. On December 31, 2019, Lebnas entered into a finance lease for a new The present value of the annual rental…On January 1, 2019, Post Corporation acquired 80 percent of Star Company's common stock for $160,000 cash, when the book value of Star Company was $160,000. At the date of the business combination, the book values of Star's net assets and liabilities approximated fair value except for inventory, which had a book value of $40.000 and fair value of $45,000, and equipment, which had a book value of $100,000 and a fair value of $120,000. Additional information: * Star Company uses the FIFO method and all inventory acquired on January 1, 2019 were sold during 2019. * Equipment has a remaining useful life of 10 years, and the straight-line method is used. * Star reported net income of $60.000 and $75,000 for 2019 and 2020 respectively. * Star Company declared and paid dividends of $30.000 in 2019 and $40,000 in 2020. What is the balance of Investment in Star Company on December 31, 2020? Select one: O a. $160.000 O b. $212.000 C. $208.000 Od. $204,800On January 1, 2019, Post Corporation acquired 80 percent of Star Company's common stock for $160,000 cash, when the book value of Star Company was $160,000. At the date of the business combination, the book values of Star's net assets and liabilities approximated fair value except for inventory, which had a book value of $40,000 and fair value of $45,000, and equipment, which had a book value of $100,000 and a fair value of $120,000. Additional information: * Star Company uses the FIFO method and all inventory acquired on January 1, 2019 were sold during 2019. Equipment has a remaining useful life of 10 years, and the straight-line method is used. * Star reported net income of $60,000 and $75,000 for 2019 and 2020 respectively. * Star Company declared and paid dividends of $30,000 in 2019 and $40,000 in 2020. What is the balance of Noncontrolling interest in Net Assets on December 31, 2020? Select one: a. $52,200 b. $53,000 c. $51,200 d. $40,000
- On January 1, 2019, Post Corporation acquired 80 percent of Star Company's common stock for $160,000 cash, when the book value of Star Company was $160,000. At the date of the business combination, the book values of Star's net assets and liabilities approximated fair value except for inventory, which had a book value of $40,000 and fair value of $45,000, and equipment, which had a book value of $100,000 and a fair value of $120,000. Additional information: * Star Company uses the FIFO method and all inventory acquired on January 1, 2019 were sold during 2019. * Equipment has a remaining useful life of 10 years, and the straight-line method is used. * Star reported net income of $60,000 and $75,000 for 2019 and 2020 respectively. * Star Company declared and paid dividends of $30,00 in 2019 and $40,000 in 2020. What is the balance of Investment in Star Company on December 31, 2020? Select one: a. $204,800 b. $212,000 c. $160,000 d. $208,000 solve it as soon as possible pleaseeeeeOn January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. Theconsideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shareswith a market price of P45 per share.The book value of Luna Corp.’s identifiable net assets approximate its fair value, except for thefollowing:• Merchandise inventory’s fair value is lower than the book balance by 150,000.• Equipment-A, with 2 years remaining useful life, costing P300,000 is understated byP50,000.• Land with a fair value of P500,000 is recognized in the books amounting to P350,000.The following events happened to Luna Corp.• Equipment-A was sold in June 30, 2023 for P320,000.• 60% of merchandise inventory were sold in 2022.• There is no movement as to the ordinary shares of Luna Corp during the year.The unadjusted trial balance as of December 31, 2022 were as follows:Lucas Company Luna CorpCash 2,240,000 1,800,000Trade Receivables 1,000,000 960,000Merchandise Inventory 2,320,000…On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. Theconsideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shareswith a market price of P45 per share.The book value of Luna Corp.’s identifiable net assets approximate its fair value, except for thefollowing:• Merchandise inventory’s fair value is lower than the book balance by 150,000.• Equipment-A, with 2 years remaining useful life, costing P300,000 is understated byP50,000.• Land with a fair value of P500,000 is recognized in the books amounting to P350,000.The following events happened to Luna Corp.• Equipment-A was sold in June 30, 2023 for P320,000.• 60% of merchandise inventory were sold in 2022.• There is no movement as to the ordinary shares of Luna Corp during the year.The unadjusted trial balance as of December 31, 2022 were as follows:Lucas Company Luna CorpCash 2,240,000 1,800,000Trade Receivables 1,000,000 960,000Merchandise Inventory 2,320,000…
- On January 1, 2020, Merlo Company acquired 80% of the stocks of Fritzie Company for P2,000,000. On this date, Fritzie Company had P1,000,000 of Capital Stock and P800,000 of Retained Earnings. On this date, the carrying values of the identifiable assets and liabilities of Fritzie Company are equal to their fair values.During the year, Merlo Company ships merchandise to Fritzie Company merchandise amounting to P800,000, which includes 25% gross profit rate. At the end of the year, records show the following: Merlo Company Fritzie CompanyInventories, Jan 1. P350,000 P120,000Inventories, Dec. 31 400,000 200,000Sales 5,500,000 2,500,000Cost of Sales 3,200,000 1,600,000Operating expenses 650,000 300,000Dividends paid 500,000 350,000The ending…On January 1, 2021, Alamar Corporation acquired a 36 percent interest in Burks, Inc., for $218,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $349,000. During 2021, Burks reported net income of $76,000 and declared and paid cash dividends of $25,000. Alamar sold inventory costing $25,000 to Burks during 2021 for $36,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar’s 2021 journal entries to apply the equity method to this investment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. Record the acquisition of a 36 percent interest in Burks. 1b. Record the 36 percent income earned by Alamar from this investment. 1c. Record the investee dividend declaration. 1d. Record the collection of dividend from investee.On January 1, 2021, Alamar Corporation acquired a 36 percent interest in Burks, Inc., for $198,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $353,000. During 2021, Burks reported net income of $84,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $27,000 to Burks during 2021 for $35,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar’s 2021 journal entries to apply the equity method to this investment 2. Record the 36 percent income earned by Alamar from this investment.
- On January 1, 2021, Alamar Corporation acquired a 36 percent interest in Burks, Inc., for $198,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $353,000. During 2021, Burks reported net income of $84,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $27,000 to Burks during 2021 for $35,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar’s 2021 journal entries to apply the equity method to this investment. 3. Record the investee dividend declaration.On January 1, 2021, Alamar Corporation acquired a 36 percent interest in Burks, Inc., for $198,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $353,000. During 2021, Burks reported net income of $84,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $27,000 to Burks during 2021 for $35,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar’s 2021 journal entries to apply the equity method to this investment. 4. Record the collection of dividend from investee.On January 1, 2024, Alamar Corporation acquired a 35 percent interest in Burks, Incorporated, for $235,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $347,000. During 2024, Burks reported net income of $79,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $22,000 to Burks during 2024 for $44,000. Burks used all of this merchandise in its operations during 2024. Required: Prepare all of Alamar's 2024 journal entries to apply the equity method to this investment. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < 1 2 3 Note: Enter debits before credits. 4 Record the investee dividend declaration. Transaction с 5 General Journal Debit Credit