Question
In: Accounting
Fargus Corporation owned 51% of the voting common stock of Sanatee, Inc. The parent's interest was...
Fargus Corporation owned 51% of the voting common stock of Sanatee, Inc. The parent's interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition price.
On January 1, 2010, Sanatee sold $1,400,000 in ten-year bonds to the public at 108. The bonds pay a 10% interest rate every December 31. Fargus acquired 40% of these bonds on April 1, 2012, for 95% of the face value. Both companies utilized the straight-line method of amortization.
a.) Prepare amortization tables for Fargus (4/1/2012 to 12/31/2013) and (1/1/2010 to 12/31/2013)
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Fargus Corporation owned 51% of the voting common stock of Sanatee, Inc. The parent's interest was...
Fargus Corporation owned 51% of the voting common stock of
Sanatee, Inc. The parent's interest was acquired several years ago
on the date that the subsidiary was formed. Consequently, no
goodwill or other allocation was recorded in connection with the
acquisition price.
On January 1, 2017, Sanatee sold $1,400,000 in ten-year bonds to
the public at 108. The bonds pay a 10% interest rate every December
31. Fargus acquired 40% of these bonds on January 1, 2019, for 95%
of...
Fargus Corporation owned 61% of the voting common stock of Sanatee, Inc. The parent's interest was...
Fargus Corporation owned 61% of the voting common stock of
Sanatee, Inc. The parent's interest was acquired several years ago
on the date that the subsidiary was formed. Consequently, no
goodwill or other allocation was recorded in connection with the
acquisition price.
On January 1, 2010, Sanatee sold $1,800,000 in ten-year bonds to
the public at 108. The bonds pay a 10% interest rate every December
31. Fargus acquired 40% of these bonds on April 1, 2012, for 95% of...
F owned 51% of the voting common stock of S. the parent’s interest was acquired several...
F owned 51% of the voting common stock of S. the parent’s
interest was acquired several years ago on the date that the
subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition price.
On January 1, 2017 S sold $1,400,000 in ten-year bonds to the
public at 106. The bonds pay a 10% interest rate every December 31.
F acquired 40% of these bonds on the open January 1, 2018, for 96%
of...
Cairns owns 80 percent of the voting stock of Hamilton, Inc. The parent's interest was acquired...
Cairns owns 80 percent of the voting stock of Hamilton, Inc.
The parent's interest was acquired several years ago on the date
that the subsidiary was formed.
Consequently, no goodwill or other allocation was recorded in
connection with the acquisition.
Cairns uses the equity method in its internal records to account
for its investment in Hamilton.
On January 1, 2011, Hamilton sold $1,300,000 in 10-year bonds to
the public at 105.
The bonds had a cash interest rate of 8...
Parent Corporation acquired a 70 percent interest in Subsidiary Corporation’s outstanding voting common stock on January...
Parent Corporation acquired a 70 percent interest in Subsidiary
Corporation’s outstanding voting common stock on January 1, 2011,
for $735,000 cash. The stockholders’ equity of Subsidiary on this
date consisted of $750,000 capital stock and $150,000 retained
earnings. The difference between the fair value of Subsidiary and
the underlying equity acquired in Subsidiary was assigned $7,500 to
Subsidiary’s undervalued inventory, $21,000 to undervalued
buildings, $31,500 to undervalued equipment, and remainder assigned
to goodwill. The undervalued inventory items were Sold during...
Davis Corporation acquired 40% of the voting common stock of ABC, Inc. on January 1, 20X2,...
Davis Corporation acquired 40% of the voting common stock of ABC,
Inc. on January 1, 20X2, for $250,000, giving Davis Corporation
significant influence over the operations of ABC, Inc. For the year
ended December 31, 20X2, ABC, Inc.’s audited financial statements
reported a net income of $50,000. Also, ABC, Inc. declared and paid
total dividends to its shareholders of $25,000 on December 31,
20X2. The fair value of the shares purchased by Davis Corporation
was $280,000 on December 31, 20X2....
Virginia Corp. owned all of the voting common stock of Stateside Co. Both companies use the...
Virginia Corp. owned all of the voting common stock of Stateside
Co. Both companies use the perpetual inventory method, and Virginia
decided to use the partial equity method to account for this
investment. During 2017, Virginia made cash sales of $400,000 to
Stateside. The gross profit rate was 30% of the selling price. By
the end of 2017, Stateside had sold 75% of the goods to outside
parties for $420,000 cash.
1. Prepare journal entries for Virginia and Stateside to...
Print Corporation acquired all outstanding $10 par value voting common stock of Size Inc. on January...
Print Corporation acquired all outstanding $10 par value voting
common stock of Size Inc. on January 1, 20X9, in exchange for
25,000 shares of its $20 par value voting common stock. On December
31, 20X8, Print’s common stock had a closing market price of $30
per share on a national stock exchange. The acquisition was
appropriately accounted for under the acquisition method. Both
companies continued to operate as separate business entities
maintaining separate accounting records with years ending December
31....
Delta Corporation has owned 45% of the voting stock of Egret Company for many years, originally...
Delta Corporation has owned 45% of the voting stock of Egret
Company for many years, originally purchased at book value and
reported using the equity method. Egret has reported significant
net losses in recent years, and at the beginning of 2019, the
carrying value of the investment is $1,000,000. Egret reports a
loss of $3,000,000 for 2019, and the loss is considered other than
temporary. In 2020 Egret unexpectedly reports net income of
$900,000. Required:
a. What amount should Delta...
How does the sale of the subsidiary's own common stock effect the parent's investment in the...
How does the sale of the subsidiary's own common stock effect
the parent's investment in the subsidiary?
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