Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Question
Chapter 2, Problem 6.2E
a.
To determine
Concept Introduction: The elimination entries help the accountants to present the account balances in the case that the parent and subsidiary companies need to be shown as a single economic firm. These entries appear on the consolidated statement worksheet while the accounting records of the specific firm will not have it.
To record: The elimination entries to be made on the consolidated worksheet on the date of acquisition.
b.
To determine
Concept Introduction: The elimination entries help the accountants to present the account balances in the case that the parent and subsidiary companies need to be shown as a single economic firm. These entries appear on the consolidated statement worksheet while the accounting records of the specific firm will not have it.
To record: The elimination entries to be made on the consolidated worksheet on the date of acquisition.
c.
To determine
Concept Introduction: The elimination entries help the accountants to present the account balances in the case that the parent and subsidiary companies need to be shown as a single economic firm. These entries appear on the consolidated statement worksheet while the accounting records of the specific firm will not have it.
The elimination entries to be made on the consolidated worksheet prepared on the date of acquisition.
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Students have asked these similar questions
Hoover Company acquired Burgess Company for $1,200,000 cash. The fair value of Burgess's assets was $1,040,000, and the company had
liabilities of $60,000. Which of the following journal entries would be used to record the purchase of Burgess Company?
Multiple Choice
Burgess assets
Burgess liabilities
Goodwill
Cash
Burgess assets
Cash
1,040,000
60,000
100,000
1,200,000
1,200,000
1,200,000
Problem 15-5 (IAA)
Prepare journal entry to record the sale`of ABC ordinary
statement of financial position on January 1, 2020:
Aborigine Company reported the following accounts in the
share on July 1, 2021.
Market adjustment for unrealized loss
the change in fair value.
3. Prepare journal entry on December 31, 2021 to recognize
A tement of hnancial position on January 1, 2020:
Noncurrent assets
Financial asset –FVOCI
Market adjustment for unrealized loss
4,000,000
( 500,000)
Market value
3,500,000
Other comprehensive income
Unrealized loss
( 500,000)
An analysis of the investment portfolio revealed the
following on December 31, 2020.
Cost
Market
XYZ ordinary share
ABC ordinary share
RST preference share
1,000,000
2,500,000
500,000
1,200,000
2,000,000
200,000
4,000,000
3,400,000
On July 1, 2021, the ABC ordinary share was sold for
P2,100,000.
On December 31, 2021, the remaining investments have the
following market value:
XYZ ordinary share
RST preference share
1,000,000
150,000…
Compute the amount of acquired Goodwill, including contingent earnings and bargain purchase
Assume that you are charged with assigning fair values related to a $3,800,000 acquisition. You determine that the fair value of the net identifiable tangible assets is $1,850,000. You also conclude that the purchase included a Customer List with a fair value at $340,000.
a. How much Goodwill will you record in this acquisition?
$ 1,610,000 ✓
b. Continuing from part (a), now also assume that the purchase and sale agreement requires the payment of an additional $925,000 if the subsidiary achieves a certain level of earnings. You estimate the fair value of that contingent earnings clause in the agreement to be $220,000.
How does this additional information affect your computation of Goodwill?
The amount of Goodwill recorded is $
1,830,000
c. This part of the exercise is independent parts (a) and (b). Assume that the purchase price is $3,800,000 and that fair value of the net identifiable tangible…
Chapter 2 Solutions
Advanced Accounting
Ch. 2 - Prob. 1UTICh. 2 - Prob. 2UTICh. 2 - Prob. 3UTICh. 2 - Prob. 4UTICh. 2 - Prob. 5UTICh. 2 - Prob. 6UTICh. 2 - Santos Corporation is considering investing in...Ch. 2 - Prob. 2.1ECh. 2 - Prob. 2.2ECh. 2 - Prob. 3.1E
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