Question
In: Accounting
On December 31, 2015, Aron Company purchases 80% of the common stock of Shield Company for...
On December 31, 2015, Aron Company purchases 80% of the common stock of Shield Company for $320,000 cash. On this date, any excess of cost over book value is attributed to accounts with fair values that differ from book values. These accounts of Shield Company have the following fair values:
Cash - $40,000
A/R - 30,000
Inventory - 140,000
Land - 45,000
Buildings & equipment - 225,000
Copyrights - 25,000
Current liabilities - 65,000
Bonds payable - 105,000
The following comparative balance sheets are prepared for the two companies immediately after the purchase:
Aron Shield
cash $315,000 40,000
a/r 70,000 30,000
Inventory 130,000 120,000
Investment in Shield 320,000
Land 50,000 35,000
Buildings and equipment 350,000 230,000
Acc.Depr. (100,000) (50,000)
Copyrights 40,000 10,000
total assets 1,175,000 415,000
Current liabilities $192,000 65,000
Bonds payable 100,000
Common stock ($10 par) Aron 100,000
Common stock ($5 par) Shield 50,000
Paid in capital in excess of par 250,000 70,000
Retained Earnings 633,000 130,000
Total liabilites and equity 1,175,000 415,000
Prepare the Value Analysis Schedule and the Determination and Distribution of Excess Schedule for the investment in Shield Company.
Prepare the elimination entries that would be made on a consolidated worksheet prepared on the date of acquisition.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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Also outstanding at December...
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Also outstanding at December 31 were incentive stock options
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On December 31, 2016, Pam Corporation purchased 80 percent of the stock of Sun Company at...
On December 31,
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Company at book value.
The data reported on their
separate balance sheets immediately after the acquisition
follow.
At December 31, 2016, Pam Corporation owes Sun $20,000 on
accounts payable. (All amounts are in thousands.)
Pam
Sun
Assets
Cash
$128
$72
Accounts Receivable
180
136
inventories
572
224
investments in Sun
800
0
Equipment- Net
1520
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3200
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Liabilites and Stockholders' Equity
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132...
Exercise 4-8 On May 1, 2015, Peters Company purchased 80% of the common stock of Smith...
Exercise 4-8
On May 1, 2015, Peters Company purchased 80% of the common stock of
Smith Company for $53,100. Additional data concerning these two
companies for the years 2015 and 2016 are:
2015
2016
Peters
Smith
Peters
Smith
Common stock
$103,300
$27,200
$103,300
$27,200
Other contributed capital
38,900
9,000
38,900
9,000
Retained earnings, 1/1
72,100
10,100
115,800
53,000
Net income (loss)
58,300
44,700
39,400
(5,300
)
Cash dividends (11/30)
14,600
1,800
4,700
—0—
Any difference between book value and the...
Exercise 4-8 On May 1, 2015, Peters Company purchased 80% of the common stock of Smith...
Exercise 4-8
On May 1, 2015, Peters Company purchased 80% of the common stock of
Smith Company for $53,100. Additional data concerning these two
companies for the years 2015 and 2016 are:
2015
2016
Peters
Smith
Peters
Smith
Common stock
$103,300
$27,200
$103,300
$27,200
Other contributed capital
38,900
9,000
38,900
9,000
Retained earnings, 1/1
72,100
10,100
115,800
53,000
Net income (loss)
58,300
44,700
39,400
(5,300
)
Cash dividends (11/30)
14,600
1,800
4,700
—0—
Any difference between book value and the...
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authorized, 45,000 shares issued and
outstanding
$
900,000
Paid-in capital
in excess of par value, common stock
70,000
Retained
earnings
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Total
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$
1,340,000
In year 2016, the
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accounts.
Jan.
1
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stock at $20 cash per share.
Jan.
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Directors declared a $4 per share cash dividend...
Kohler Corporation reports the following components of stockholders’ equity on December 31, 2015: Common stock—$20 par...
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following components of stockholders’ equity on December 31,
2015:
Common stock—$20 par value, 100,000 shares
authorized, 45,000 shares issued and
outstanding
$
900,000
Paid-in capital
in excess of par value, common stock
70,000
Retained
earnings
370,000
Total
stockholders’ equity
$
1,340,000
In year 2016, the
following transactions affected its stockholders’ equity
accounts.
Jan.
1
Purchased 4,500 shares of its own
stock at $20 cash per share.
Jan.
5
Directors declared a $4 per share cash dividend...
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