Question
In: Accounting
The balance sheets of E Ltd. and J Ltd. on December 30, Year 6, were as...
The balance sheets of E Ltd. and J Ltd. on December 30, Year 6, were as follows:
| E Ltd. | J Ltd. | |||||
| Cash and receivables | $ | 96,850 | $ | 21,200 | ||
| Inventory | 58,700 | 9,850 | ||||
| Plant assets (net) | 231,400 | 72,200 | ||||
| Intangible assets | 24,850 | 7,700 | ||||
| $ | 411,800 | $ | 110,950 | |||
| Current liabilities | $ | 64,700 | $ | 30,100 | ||
| Long-term debt | 99,200 | 45,200 | ||||
| Common shares | 156,400 | 46,600 | ||||
| Retained earnings (deficit) | 91,500 | (10,950 | ) | |||
| $ | 411,800 | $ | 110,950 | |||
On December 31, Year 6, E Ltd. issued 525 shares, with a fair value of $40 each, for 70% of the outstanding shares of J Ltd. Costs involved in the acquisition, paid in cash, were as follows:
| Costs of arranging the acquisition | $ | 2,670 |
| Costs of issuing shares | 1,940 | |
| $ | 4,610 | |
The carrying amounts of J Ltd.’s net assets were equal to fair values on this date except for the following:
| Fair value | ||
| Plant assets | $ | 65,850 |
| Long-term debt | 43,400 | |
E Ltd. was identified as the acquirer in the combination.
Required:
(a) Prepare the consolidated balance sheet of E Ltd. on December 31, Year 6, under the identifiable net assets method.
(b) Prepare the consolidated balance sheet of E Ltd. on December 31, Year 6, under the fair value enterprise method.
Solutions
Expert Solution
As per US GAAP / IFRS Assets
and liability in case of business combination is recorded at Fair
Value
ekkarill92 answered 2 years agoRelated Solutions
6. The balance sheets of E Ltd. and J Ltd. on December 30, Year 6, were...
6. The balance sheets of E Ltd. and J Ltd. on December 30, Year
6, were as follows:
E Ltd.
J Ltd.
Cash and receivables
$
96,100
$
19,700
Inventory
57,200
9,100
Plant assets (net)
228,400
70,700
Intangible assets
24,100
6,200
$
405,800
$
105,700
Current liabilities
$
63,200
$
30,100
Long-term debt
97,700
45,200
Common shares
153,400
46,600
Retained earnings (deficit)
91,500
(16,200
)
$
405,800
$
105,700
On December 31, Year 6, E Ltd. issued 483 shares, with...
The comparative balance sheets and income statements for Gypsy Company follow. Balance Sheets As of December...
The comparative balance sheets and income statements for Gypsy
Company follow.
Balance Sheets
As of December 31
Year 2
Year 1
Assets
Cash
$
25,779
$
2,523
Accounts receivable
2,158
1,295
Inventory
6,559
6,149
Equipment
18,948
43,638
Accumulated depreciation—equipment
(7,717
)
(17,493
)
Land
19,647
9,607
Total assets
$
65,374
$
45,719
Liabilities and equity
Accounts payable (inventory)
$
2,552
$
4,122
Long-term debt
2,728
6,236
Common stock
24,100
10,000
Retained earnings
35,994
25,361
Total liabilities and equity
$
65,374...
The comparative balance sheets and income statements for Gypsy Company follow. Balance Sheets As of December...
The comparative balance sheets
and income statements for Gypsy Company follow.
Balance Sheets
As of December 31
2017
2016
Assets
Cash
$
23,243
$
2,651
Accounts receivable
2,237
1,342
Inventory
6,202
5,814
Equipment
22,837
44,607
Accumulated
depreciation—equipment
(9,806
)
(16,588
)
Land
14,214
8,184
Total assets
$
58,927
$
46,010
Liabilities and
equity
Accounts payable (inventory)
$
2,671
$
4,315
Long-term debt
2,695
6,160
Common stock
20,700
10,500
Retained earnings
32,861
25,035
Total liabilities
and equity
$
58,927
$
46,010...
The comparative balance sheets and income statements for Munoz Company follow: Balance Sheets As of December...
The comparative balance sheets and income statements for Munoz
Company follow:
Balance Sheets
As of December 31
Year 2
Year 1
Assets
Cash
$
22,554
$
2,987
Accounts receivable
1,813
1,088
Inventory
6,503
6,097
Equipment
19,699
43,369
Accumulated depreciation—equipment
(5,974
)
(15,475
)
Land
19,269
9,039
Total assets
$
63,864
$
47,105
Liabilities and equity
Accounts payable (inventory)
$
2,738
$
4,423
Long-term debt
2,860
6,538
Common stock
25,200
11,500
Retained earnings
33,066
24,644
Total liabilities and equity
$
63,864...
Common-Sized Balance Sheets The following end-of-the-year balance sheets (in millions) were adapted from recent financial statements...
Common-Sized Balance Sheets
The following end-of-the-year balance sheets (in millions) were
adapted from recent financial statements of Apple
(AAPL).
Year 1
Year 2
Current assets:
Cash
$13,844
$21,120
Marketable securities
11,233
20,481
Accounts receivable
27,219
30,343
Inventory
2,111
2,349
Other
14,124
15,085
Total current assets
$68,531
$89,378
Long-term assets:
Long-term marketable securities
$130,162
$164,065
Property, plant, and equipment
20,624
22,471
Other long-term assets
12,522
14,565
Total long-term assets
$163,308
$201,101
Total assets
$231,839
$290,479
Current liabilities:
Accounts payable and similar...
Presented below are the balance sheets of Trout Corporation as of December 31, Year 1 and...
Presented below are the balance sheets of Trout Corporation as
of December 31, Year 1 and Year 2, and the income statement for the
year ended December 31, Year 2. The statement of retained earnings
for the year ended December 31, Year 2 is on the next page. All
dollars are in thousands.
Trout Corporation Balance Sheets December 31, Year 1 and Year 2
Assets Year 1 Year 2 Cash $ 85 $ 127 Accounts receivable 245 253
Less: Allowance...
Presented below are the balance sheets of Trout Corporation as of December 31, Year 1 and...
Presented below are the balance sheets of Trout Corporation as
of December 31, Year 1 and Year 2, and the income statement for the
year ended December 31, Year 2. The statement of retained earnings
for the year ended December 31, Year 2 is on the next page. All
dollars are in thousands.
Trout Corporation
Balance Sheets
December 31, Year 1 and Year 2
Assets
Year 1
Year 2
Cash
$
85
$ 127...
3) If you were preparing comparative balance sheets as of April 30, 2020 and April 2019...
3) If you were preparing comparative balance sheets as of April
30, 2020 and April 2019 for a small, local retailer, which specific
balance sheet accounts would you expect to see changes
in? Identify which of these accounts you would
anticipate to increase or decrease. Which of the 3
categories of financial ratios (liquidity, solvency,
profitability), would be affected by these changes in the Balance
Sheet accounts? Indicate whether the category or
categories would improve or deteriorate identifying which ratios
within each of...
The following financial statements were provided by Roberts Company: Roberts Company Balance Sheets At September 30,...
The following financial statements were provided by Roberts
Company:
Roberts Company
Balance Sheets
At September 30, 20X1 and 20X2
1
20X1
20X2
2
Assets:
3
Cash
$23,000.00
$7,000.00
4
Accounts receivable
7,600.00
9,600.00
5
Inventory
20,800.00
18,000.00
6
Plant and equipment
40,000.00
60,000.00
7
Accumulated depreciation
(10,000.00)
(16,000.00)
8
Total assets
$81,400.00
$78,600.00
9
Liabilities and equity:
10
Accounts payable
$4,800.00
$3,200.00
11
Wages payable
1,200.00
800.00
12
Common stock
50,000.00
50,000.00
13
Retained earnings
25,400.00
24,600.00
14
Total liabilities...
On 1st July 2009 C Ltd acquires a 30% shares in J Ltd for an exchange...
On 1st July 2009 C Ltd acquires a 30% shares in J Ltd for an
exchange of cash of $270 000. On acquisition date, the assets of J
Ltd are reported at fair value and the total equity is:
Contributing equity $660 000 Retained earnings $240 000
A dividend of $5 000 is paid by J Ltd on 31st October 2009 from
profits earned in 2008-09 period (pre-acquisition). For the year
ended 30th June 2010, J Ltd records an after...
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