Question

In: Accounting

On January 1 2017 the balance sheets of Potter Co. and Hogwarts Co. were as follows:...

On January 1 2017 the balance sheets of Potter Co. and Hogwarts Co. were as follows:
Potter Hogwarts
cash 1,000,000 50,000
equipment 1,000,000 100,000
a/d equip 100,000 10,000
Land 2,000,000 20,000
building 3,000,000 100,000
a/d building 1,000,000 30,000
patent 50,000 50,000
total assets 5,950,000 280,000
accounts payable 1,000,000 40,000
notes payable 1,000,000 40,000
common stock $5 par 3,000,000 150,000
apic c/s 100,000 0
r/e 850,000 50,000
On January 2nd Potter acquired all of the stock of Hogwarts by issuing 50,000 shares of common stock when the stock was
selling for $11 per share. At that time the fair market value of Hogwarts assets were:
equipment 60,000
Land 30,000
building 110,000
patent 40,000
THIS IS A CONTINUATION OF 80%BAL
On December 31, 2017 Potter and Hogwarts had the following balance sheets
Income statements
Potter Hogwarts
revenue 5,000,000 80,000
depreciation expense equip 100000 10000 Note: the building, equipment and patent of Hogwarts
depreciation expense bldg 200,000 10,000 each have a 10 year remaining life with no salvage and
amortization exp patent 5000 5000 straight line depreciation is used.
investment income A 0
income B 55,000
Potter Hogwarts
cash 3,000,000 100,000
equipment 1,000,000 100,000
a/d equip 200,000 20,000
Land 2,000,000 20,000
building 3,000,000 100,000
a/d building 1,200,000 40,000
patent 45,000 45,000
Investment in Hogwarts C
total assets D 305,000
accounts payable 1,000,000 40,000
notes payable 1,000,000 40,000
common stock $5 par E 150,000 The only stock transaction Potter had in 2017 was the purchase of Hogwarts
apic c/s F 0
r/e G 75,000
Remember, On January 2nd Potter acquired all of the stock of Hogwarts by issuing 50,000 shares of common stock when the stock was
selling for $11 per share. At that time the fair market value of Hogwarts assets were: equipment
Land 60,000
building 30,000
patent 110,000
40,000
REQUIRED: A) MAKE THE JOURNAL ENTRY POTTER MAKES CONNECTED WITH ITS INVESTMENT IN HOGWARTS (YOU DO NOT HAVE TO MAKE THE ENTRY OF JAN. 2 ACQUIRING THE COMPANY)
B) FILL IN THE ANSWERS FOR A THROUGH G LET ME KNOW WHAT METHOD (INITIAL VALUE, EQUITY, PARTIAL EQUITY) YOU ARE USING
C) MAKE ANY NECESSARY WORKSHEET ENTRIES
D) PREPARE A CONSOLIDATED BALANCE SHEET ON 12/31/2017
E) PREPARE A CONSOLIDATED INCOME STATEMENT FOR 2017
HINT: DON'T FORGET ABOUT DIVIDENDS THAT HOGWARTS AND/OR POTTER MAY HAVE PAID.  

Solutions

Expert Solution

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

On January 1 2017 the balance sheets of Potter Co. and Hogwarts Co. were as follows:...
On January 1 2017 the balance sheets of Potter Co. and Hogwarts Co. were as follows: Potter Hogwarts cash 1,000,000 50,000 equipment 1,000,000 100,000 a/d equip 100,000 10,000 Land 2,000,000 20,000 building 3,000,000 100,000 a/d building 1,000,000 30,000 patent 50,000 50,000 total assets 5,950,000 280,000 accounts payable 1,000,000 40,000 notes payable 1,000,000 40,000 common stock $5 par 3,000,000 150,000 apic c/s 100,000 0 r/e 850,000 50,000 On January 2nd Potter acquired 80% of the stock of Hogwarts by issuing 50,000...
On December 31, 2017 Potter and Hogwarts had the following balance sheets Income statements Potter Hogwarts...
On December 31, 2017 Potter and Hogwarts had the following balance sheets Income statements Potter Hogwarts revenue 5,000,000 80,000 depreciation expense equip 100000 10000 Note: the building, equipment and patent of Hogwarts depreciation expense bldg 200,000 10,000 each have a 10 year remaining life with no salvage and amortization exp patent 5000 5000 straight line depreciation is used. investment income A 0 income B 55,000 Potter Hogwarts cash 3,000,000 100,000 equipment 1,000,000 100,000 a/d equip 200,000 20,000 Land 2,000,000 20,000...
XYZ Co.’s summary balance sheets for 2017 and 2018 are below: XYZ Co. Balance Sheets 2017...
XYZ Co.’s summary balance sheets for 2017 and 2018 are below: XYZ Co. Balance Sheets 2017 2018 Cash 400,000 300,000 Accounts receivable 800,000 _________ (b) Net fixed assets 1,600,000 2,300,000 TOTAL ASSETS _________ _________ Accounts payable 250,000 300,000 Short-term debt 350,000 400,000 Long-term debt 800,000 800,000 Shareholders’ equity _________ (a) 1,500,000 TOTAL LIABIL. & SHAREHOLDER’S EQUITY _________ _________ Calculate the following: a) Shareholders’ equity in 2017 b) Accounts receivable in 2018 c) If XYZ Co. has a company policy to...
On January 1, year 1, Polk Corp. and Strass Corp. had condensed balance sheets as follows:...
On January 1, year 1, Polk Corp. and Strass Corp. had condensed balance sheets as follows: Polk Strass Current assets $ 70,000 $ 20,000 Noncurrent assets 90,000 40,000 Total assets $160,000 $60,000 Current liabilities $ 30,000 $10,000 Long-term debt 50,000 -- Stockholders' equity 80,000 50,000 Total liabilities and stockholders' equity $160,000 $60,000 On January 2, year 1, Polk borrowed $60,000 and used the proceeds to purchase 90% of the outstanding common shares of Strass. This debt is payable in ten...
The balance sheets for Choolwe & Co Ltd for the years ended 2017, 2018, and 2019...
The balance sheets for Choolwe & Co Ltd for the years ended 2017, 2018, and 2019 are as follows: 2017 2018 2019 Non Current assets K000 K000 K000 Plant and Equipment 13,200 16,110 16,410 Current assets Inventory 2,190 2,280 2,490 Trade debtors 2,040 2,280 2,490 Short-term investments 4,200 1,800 1,290 Cash at bank and in hand 1,920 1,650 2,160 Creditors: amounts falling due within one year Short-term loans (2,340) (2 ,580) (2,550) Trade creditors (2,760) (2,610) (2,670) Taxation (360) (420)...
On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows: Park Strand...
On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows: Park Strand Current assets $ 70,000 $ 20,000 Noncurrent assets 90,000 40,000 Total assets $ 160,000 $ 60,000 Current liabilities $ 30,000 $ 10,000 Long-term debt 50,000 0 Stockholders’ equity 80,000 50,000 Total liabilities and equities $ 160,000 $ 60,000 On January 2, Park borrowed $60,000 and used the proceeds to obtain 80 percent of the outstanding common shares of Strand. The acquisition price was considered...
On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows: Park Strand...
On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows: Park Strand Current assets $ 74,500 $ 16,050 Noncurrent assets 92,250 46,200 Total assets $ 166,750 $ 62,250 Current liabilities $ 32,000 $ 12,250 Long-term debt 51,750 Stockholders' equity 83,000 50,000 Total liabilities and equities $ 166,750 $ 62,250 On January 2, Park borrowed $66,000 and used the proceeds to obtain 80 percent of the outstanding common shares of Strand. The acquisition price was considered proportionate...
The stockholders’ equity accounts of Ayayai Corp. on January 1, 2017, were as follows. Preferred Stock...
The stockholders’ equity accounts of Ayayai Corp. on January 1, 2017, were as follows. Preferred Stock ( 7%, $ 100 par noncumulative,  4,200 shares authorized) $ 252,000 Common Stock ($ 3 stated value,  336,000 shares authorized) 840,000 Paid-in Capital in Excess of Par Value—Preferred Stock 12,600 Paid-in Capital in Excess of Stated Value—Common Stock 537,600 Retained Earnings 691,500 Treasury Stock ( 4,200 common shares) 33,600 During 2017, the corporation had the following transactions and events pertaining to its stockholders’ equity. Feb. 1...
The stockholders’ equity accounts of Cyrus Corporation on January 1, 2017, were as follows. Preferred Stock...
The stockholders’ equity accounts of Cyrus Corporation on January 1, 2017, were as follows. Preferred Stock ( 7%, $ 100 par noncumulative,  5,000 shares authorized) $ 300,000 Common Stock ($ 4 stated value,  300,000 shares authorized) 1,000,000 Paid-in Capital in Excess of Par Value—Preferred Stock 15,000 Paid-in Capital in Excess of Stated Value—Common Stock 480,000 Retained Earnings 699,500 Treasury Stock ( 5,000 common shares) 40,000 During 2017, the corporation had the following transactions and events pertaining to its stockholders’ equity. Feb. 1...
The stockholders’ equity accounts of Castle Corporation on January 1, 2017, were as follows. Preferred Stock...
The stockholders’ equity accounts of Castle Corporation on January 1, 2017, were as follows. Preferred Stock (8%, $50 par, cumulative, 10,500 shares authorized) $ 375,000 Common Stock ($1 stated value, 1,900,000 shares authorized) 1,250,000 Paid-in Capital in Excess of Par—Preferred Stock 140,000 Paid-in Capital in Excess of Stated Value—Common Stock 1,450,000 Retained Earnings 1,850,000 Treasury Stock (11,000 common shares) 55,000 During 2017, the corporation had the following transactions and events pertaining to its stockholders’ equity. Feb. 1 Issued 24,500 shares...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT