Question
In: Accounting
Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $98,000....
Phone Corporation acquired 70 percent of Smart Corporation’s
common stock on December 31, 20X4, for $98,000. At that date, the
fair value of the noncontrolling interest was $42,000. Data from
the balance sheets of the two companies included the following
amounts as of the date of acquisition:
| Phone | Smart | |||||||||
| Item | Corporation | Corporation | ||||||||
| Cash | $ | 62,300 | $ | 21,000 | ||||||
| Accounts Receivable | 95,000 | 51,000 | ||||||||
| Inventory | 136,000 | 90,000 | ||||||||
| Land | 71,000 | 39,000 | ||||||||
| Buildings & Equipment | 425,000 | 254,000 | ||||||||
| Less: Accumulated Depreciation | (162,000 | ) | (79,000 | ) | ||||||
| Investment in Smart Corporation | 98,000 | |||||||||
| Total Assets | $ | 725,300 | $ | 376,000 | ||||||
| Accounts Payable | $ | 151,500 | $ | 26,000 | ||||||
| Mortgage Payable | 304,800 | 231,000 | ||||||||
| Common Stock | 65,000 | 40,000 | ||||||||
| Retained Earnings | 204,000 | 79,000 | ||||||||
| Total Liabilities & Stockholders’ Equity | $ | 725,300 | $ | 376,000 | ||||||
At the date of the business combination, the book values of Smart’s
assets and liabilities approximated fair value except for
inventory, which had a fair value of $96,000, and buildings and
equipment, which had a fair value of $190,000. At December 31,
20X4, Phone reported accounts payable of $14,400 to Smart, which
reported an equal amount in its accounts receivable.
Required:
a. Prepare the consolidation entry or entries needed to prepare a
consolidated balance sheet immediately following the business
combination. (If no entry is required for a
transaction/event, select "No journal entry required" in the first
account field.)
Solutions
ekkarill92 answered 11 months agoRelated Solutions
Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $98,700....
Phone Corporation acquired 70 percent of Smart Corporation’s
common stock on December 31, 20X4, for $98,700. At that date, the
fair value of the noncontrolling interest was $42,300. Data from
the balance sheets of the two companies included the following
amounts as of the date of acquisition: Phone Smart Item Corporation
Corporation Cash $ 67,300 $ 40,000 Accounts Receivable 102,000
62,000 Inventory 142,000 93,000 Land 67,000 43,000 Buildings &
Equipment 419,000 253,000 Less: Accumulated Depreciation (162,000 )
(78,000 ) Investment...
Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $102,200....
Phone Corporation acquired 70 percent of Smart Corporation’s
common stock on December 31, 20X4, for $102,200. At that date, the
fair value of the noncontrolling interest was $43,800. Data from
the balance sheets of the two companies included the following
amounts as of the date of acquisition:
Phone
Smart
Item
Corporation
Corporation
Cash
$
50,300
$
21,000
Accounts Receivable
90,000
44,000
Inventory
130,000
75,000
Land
60,000
30,000
Buildings & Equipment
410,000
250,000
Less: Accumulated Depreciation
(150,000
)
(80,000
)
Investment...
Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $97,300....
Phone Corporation acquired 70 percent of Smart Corporation’s
common stock on December 31, 20X4, for $97,300. At that date, the
fair value of the noncontrolling interest was $41,700. Data from
the balance sheets of the two companies included the following
amounts as of the date of acquisition:
Phone
Smart
Item
Corporation
Corporation
Cash
$
60,300
$
31,000
Accounts Receivable
99,000
46,000
Inventory
142,000
91,000
Land
71,000
41,000
Buildings & Equipment
427,000
261,000
Less: Accumulated Depreciation
(151,000
)
(75,000
)
Investment...
Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $95,900....
Phone Corporation acquired 70 percent of Smart Corporation’s
common stock on December 31, 20X4, for $95,900. At that date, the
fair value of the noncontrolling interest was $41,100. Data from
the balance sheets of the two companies included the following
amounts as of the date of acquisition:
Phone
Smart
Item
Corporation
Corporation
Cash
$
68,300
$
37,000
Accounts Receivable
96,000
57,000
Inventory
142,000
87,000
Land
77,000
31,000
Buildings & Equipment
421,000
257,000
Less: Accumulated Depreciation
(153,000
)
(76,000
)
Investment...
Pizza Corporation acquired 75 percent of Slice Corporation’s voting common stock on January 1, 20X4, for...
Pizza Corporation acquired 75 percent of Slice Corporation’s
voting common stock on January 1, 20X4, for $353,000, when the fair
value of its net identifiable assets was $466,000 and the fair
value of the noncontrolling interest was $113,000. Slice reported
common stock outstanding of $110,000 and retained earnings of
$230,000. The excess of fair value over book value of Slice’s net
assets was attributed to amortizable assets with a remaining life
of 10 years. On December 31, 20X4, Slice sold...
Patrio Corporation acquired 100 percent of Aloe Corporation’s common stock on December 31, 2019, for $280,000....
Patrio Corporation acquired 100 percent of Aloe Corporation’s
common stock on December 31, 2019, for $280,000. Data from the
balance sheets of the two companies included the following amounts
as of the date of acquisition:
Item
Patrio
Aloe
Corporation
Corporation
Cash
$55,000
$48,000
Accounts Receivable
83,000
110,000
Inventory
310,000
167,000
Property & Plant (net)
200,000
105,000
Investment in Aloe Corporation Stock
280,000
Total Assets
$928,000
$430,000
Accounts Payable
$109,000
$43,000
Notes Payable
235,000
90,000
Common Stock
300,000
102,000
Retained Earnings...
Blank Corporation acquired 100 percent of Faith Corporation’s common stock on December 31, 20X2, for $150,000....
Blank Corporation acquired 100 percent of Faith Corporation’s
common stock on December 31, 20X2, for $150,000. Data from the
balance sheets of the two companies included the following amounts
as of the date of acquisition:
Item
Blank
Corporation
Faith
Corporation
Assets
Cash
$
65,000
$
18,000
Accounts Receivable
87,000
37,000
Inventory
110,000
60,000
Buildings & Equipment (net)
220,000
150,000
Investment in Faith Corporation Stock
150,000
Total Assets
$
632,000
$
265,000
Liabilities and Stockholders’
Equity
Accounts Payable
$
92,000...
Blank Corporation acquired 100 percent of Faith Corporation’s common stock on December 31, 20X2, for $150,000....
Blank Corporation acquired 100 percent of Faith Corporation’s
common stock on December 31, 20X2, for $150,000. Data from the
balance sheets of the two companies included the following amounts
as of the date of acquisition:
Item
Blank
Corporation
Faith
Corporation
Assets
Cash
$
65,000
$
18,000
Accounts Receivable
87,000
37,000
Inventory
110,000
60,000
Buildings & Equipment (net)
220,000
150,000
Investment in Faith Corporation Stock
150,000
Total Assets
$
632,000
$
265,000
Liabilities and Stockholders’
Equity
Accounts Payable
$
92,000...
Blank Corporation acquired 100 percent of Faith Corporation’s common stock on December 31, 20X2, for $190,000....
Blank Corporation acquired 100 percent of Faith Corporation’s
common stock on December 31, 20X2, for $190,000. Data from the
balance sheets of the two companies included the following amounts
as of the date of acquisition:
Item
Blank
Faith
Corporation
Corporation
Assets
Cash
$
67,000
$
21,000
Accounts Receivable
82,000
39,000
Inventory
111,000
64,000
Buildings and Equipment
(net)
230,000
166,000
Investment in Faith
Corporation Stock
190,000
Total Assets
$
680,000
$
290,000
Liabilities and Stockholders’
Equity
Accounts Payable
$
90,000
$...
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...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Hyperparathyroidism questions: 1. Based on what you know about the targets of parathyroid hormone, predict the...
- Exercise 14-4 Algo Consider the following competing hypotheses: H0: ρxy ≥ 0 HA: ρxy < 0...
- PLEASE ANSWER J&K :) THANK YOU! 1. Q Corporation and R Inc. are two companies with...
- Part #1: K Company is planning its cash disbursements for the upcoming months. In June, it...
- Explain the main ethical principles you need to consider in using human subjects in research.(20 marks)
- Discuss whether cloud computing has costs benefits. use specific examples and include resources
- A voltaic cell consists of an Al/Al3+ half-cell and a Cd/Cd2+ half-cell. Calculate Ecell when [Cd2+]...
ADVERTISEMENT