Question

In: Accounting

Star & Anderson SAOG. acquired all of the common stock of Wilkinson SAOG. on January 1,...

Star & Anderson SAOG. acquired all of the common stock of Wilkinson SAOG. on January 1, 2018.  As of that date, Wilkinson had the following trial balance:

Particulars

Debit

Credit

Sundry Creditors

30,000

Land & Buildings (10 year  life)

70,000

Additional Paid-in –Capital

30,000

Sundry Debtors

25,000

Cash and bank balances

18,000

Short Term Investments

17,000

Equity share capital

150,000

Inventory

55,000

Plant and Equipment (4 year life)

120,000

Land

45,000

Long term borrowings ( Maturity 31/12/2020

90,000

Retained earnings (Opening Balance)

60,000

Supplies

10,000

Total

360,000

360,000

During 2018, Wilkinson SAOG reported net income of OMR 48,000 while paying dividends of OMR 6,000.   

During 2019, Wilkinson SAOG reported net income of OMR 66,000 while paying dividends of OMR 18,000.
Assume that Star & Anderson SAOG.  acquired the common stock of Wilkinson SAOG. for OMR 294,000 in cash. As of January 1, 2018, Wilkinson SAOG land had a fair value of OMR 51,000, its buildings were valued at OMR 94,000, and its equipment was appraised at OMR 108,000. Any excess of consideration transferred over fair value of assets and liabilities acquired is due to an unamortized patent to be amortized over 5 years.

Star & Anderson SAOG decided to use the equity methodfor this investment.

Required:   Prepare consolidation worksheet entriesfor December 31, 2018.

Solutions

Expert Solution

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Giant acquired all of Small’s common stock on January 1, 2014, in exchange for cash of...
Giant acquired all of Small’s common stock on January 1, 2014, in exchange for cash of $770,000. On that day, Small reported common stock of $170,000 and retained earnings of $400,000. At the acquisition date, $46,500 of the fair-value price was attributed to undervalued land while $86,000 was assigned to undervalued equipment having a 10-year remaining life. The $67,500 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill. Over the next few years, Giant...
Giant acquired all of Small’s common stock on January 1, 2014, in exchange for cash of...
Giant acquired all of Small’s common stock on January 1, 2014, in exchange for cash of $770,000. On that day, Small reported common stock of $170,000 and retained earnings of $400,000. At the acquisition date, $46,500 of the fair-value price was attributed to undervalued land while $86,000 was assigned to undervalued equipment having a 10-year remaining life. The $67,500 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill. Over the next few years, Giant...
Giant acquired all of Small’s common stock on January 1, 2014, in exchange for cash of...
Giant acquired all of Small’s common stock on January 1, 2014, in exchange for cash of $770,000. On that day, Small reported common stock of $170,000 and retained earnings of $400,000. At the acquisition date, $37,500 of the fair-value price was attributed to undervalued land while $98,000 was assigned to undervalued equipment having a 10-year remaining life. The $64,500 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill. Over the next few years, Giant...
Matthews Co. acquired all of the common stock of Jackson Co. on January 1, 2020. As...
Matthews Co. acquired all of the common stock of Jackson Co. on January 1, 2020. As of that date, Jackson had the following trial balance: Debit Credit Accounts payable $ 60,000 Accounts receivable $ 50,000 Additional paid-in capital 60,000 Buildings (net) (20-year life) 140,000 Cash and short-term investments 70,000 Common stock 300,000 Equipment (net) (8-year life) 240,000 Intangible assets (indefinite life) 110,000 Land 90,000 Long-term liabilities (mature 12/31/22) 180,000 Retained earnings, 1/1/20 120,000 Supplies 20,000 Totals $ 720,000 $ 720,000...
Giant acquired all of Small’s common stock on January 1, 2014, in exchange for cash of...
Giant acquired all of Small’s common stock on January 1, 2014, in exchange for cash of $770,000. On that day, Small reported common stock of $170,000 and retained earnings of $400,000. At the acquisition date, $64,500 of the fair-value price was attributed to undervalued land while $72,000 was assigned to undervalued equipment having a 10-year remaining life. The $63,500 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill. Over the next few years, Giant...
Giant acquired all of Small’s common stock on January 1, 2014, in exchange for cash of...
Giant acquired all of Small’s common stock on January 1, 2014, in exchange for cash of $770,000. On that day, Small reported common stock of $170,000 and retained earnings of $400,000. At the acquisition date, $64,500 of the fair-value price was attributed to undervalued land while $72,000 was assigned to undervalued equipment having a 10-year remaining life. The $63,500 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill. Over the next few years, Giant...
) Matthews Co. acquired all of the common stock of Jackson Co. on January 1, 2017....
) Matthews Co. acquired all of the common stock of Jackson Co. on January 1, 2017. As of that date, Jackson had the following trial balance: Debit Credit Accounts payable $ 60,000 Accounts receivable $ 50,000 Additional paid-in capital 60,000 Buildings (net) (20-year life) 140,000 Cash and short-term investments 70,000 Common stock 300,000 Equipment (net) (8-year life) 240,000 Intangible assets (indefinite life) 110,000 Land 90,000 Long-term liabilities (mature 12/31/19) 180,000 Retained earnings, 1/1/17 120,000 Supplies 20,000 Totals $ 720,000 $...
Exceed, a US company, on January 1, 2019 acquired all the outstanding common stock of Silver...
Exceed, a US company, on January 1, 2019 acquired all the outstanding common stock of Silver Company, which is located in a country whose currency is the peso. The peso is the functional currency of Silver. For 2019, exchange rates for the peso were as follows: Peso 1 = Jan. 1 $0.39 Dec. 31 $0.32 Average for the year $0.35          Notes: Read carefully and follow strictly so that Bb can grade you correctly! 1. Use comma in numbers, one...
Hamza Inc. acquired all of the outstanding common stock of Ali Corp. on January 1, 2016,...
Hamza Inc. acquired all of the outstanding common stock of Ali Corp. on January 1, 2016, for $372,000. Equipment with a ten-year life was undervalued on Ali's financial records by $46,000. Hamza also owned an unrecorded customer list with an assessed fair value of $67,000 and an estimated remaining life of five years. Ali Co. earned reported net income of $180,000 in 2016 and $216,000 in 2017.  Dividends of $70,000 were paid in each of these two years.  Selected account balances as...
11) Harry Inc. acquired all of the outstanding common stock of Rose Company on January 1,...
11) Harry Inc. acquired all of the outstanding common stock of Rose Company on January 1, 2020. Annual amortization of $25,000 resulted from this transaction. On the date of the acquisition, Harry reported retained earnings of $550,000 while Rose reported a $260,000 balance for retained earnings. Harry reported net income of $105,000 in 2020 and $75,000 in 2021, and paid dividends of $20,000 each year. Rose reported net income of $28,000 in 2020 and $39,000 in 2021, and paid dividends...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT