Questions
On 1 July 2019 Short Ltd acquired 80% of the shares of Tall Ltd for $436...


On 1 July 2019 Short Ltd acquired 80% of the shares of Tall Ltd for $436 200.
At this date the equity of Tall Ltd consisted of share capital of $280 000 and retained earnings of $140 000. All the identifiable asset and liabilities of Tall Ltd were recorded at amounts equal to fair value except for:

Carrying amount FV
Land 80 000 95 000
Plant (Cost $380 000) 300 000 330 000
Inventories 15 000 18 000

The plant was considered to have a further 10-year life.

All the inventory was sold by 30 June 2020.

A litigation claim of $6 000 and Patent of $20 000 was unrecorded during the 2019 financial year.

The tax rate is 30%. Short Ltd uses the partial goodwill method.

During the 2019-20 period Tall Ltd recorded a profit of $60 000.

Required

A. Using partial goodwill, Calculate acquisition analysis at 1 July 2019
B. Prepare all consolidation journal entries for 30 June 2020


At 1 July 2019:




(a) Worksheet entries at 1 July 2019:

(i) BCVR entries:

Land:

Plant:

Inventories

Patent

Litigation


(ii) Pre-acquisition entries:



(iii) NCI share of equity at 1 July 2019:



Part B
(i) Journal entries 30 June 2020:

Land:

Plant:


Sale of inventory

Patent

Litigation


(ii) Pre-acquisition entries:





(iii) NCI share of equity at 30 June 2020:



(iv) NCI share of equity (1/7/19 - 30/6/20):


In: Accounting

Speedy Taxi Service purchased a new cab for $33,500. It is expected to have a salvage...

  1. Speedy Taxi Service purchased a new cab for $33,500. It is expected to have a salvage value of $1000 and a life of 3 years. The cab is expected to be driven 150,000 miles over those three years. It has been driven 30,000 miles in year 1 and 20,000 miles in year 2.
    1. Compute the annual depreciation for the first two years under each of the following methods:
      1. Straight Line
      2. Units-of-Activity
      3. Double-Declining

If you were the owner of the Taxi Service, which method and why would you deem most appropriate?Summit Company sells equipment on June 30, 2020. The equipment originally cost $45,000 and as of December 31, 2019 had accumulated depreciation of $24,000. Depreciation expense for the first six months of 2020 is $4,000.

Prepare the journal entries to record the depreciation expenses up to the date of sale and to record the sale of the equipment in these two independent situations. (Sales price – Book value = gain or loss)

  1. Sold for $25,000 on June 30, 2020
  2. Sold for $10,000 on June 30, 2020

#

Account Titles and Explanation

Ref

Debit

Credit

EXTRA CREDIT: Match the statement with the term most directly associated with it.

Goodwill

Intangible Assets

Research and development costs

Amortization

Franchises

  1. Rights, privileges, and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance.___________________________________
  2. The excess of cost of a company over the fair value of the net assets acquired.___________________________________
  3. A right to sell certain products or services, or use certain trademarks or trade names within a designated geographic area._______________________________________
  4. Costs incurred by a company that often lead to patents or new products. These costs must be expensed as incurred.________________________________________________
  5. The allocation of the cost of an intangible asset to expense in a rational and systematic manner._________________________________________________

In: Accounting

Accounting Cycle Review 11-01 a,b, c1-c3 Morgan Company’s balance sheet at December 31, 2019, is presented...

Accounting Cycle Review 11-01 a,b, c1-c3

Morgan Company’s balance sheet at December 31, 2019, is presented below.

MORGAN COMPANY
Balance Sheet
December 31, 2019

Cash $31,500 Accounts Payable $12,500
Inventory 30,750 Interest Payable 233
Prepaid Insurance 5,808 Notes Payable 46,500
Equipment 37,800 Owner’s Capital 46,625
$105,858 $105,858


During January 2020, the following transactions occurred. (Morgan Company uses the perpetual inventory system.)

1. Morgan paid $233 interest on the note payable on January 1, 2020. The note is due December 31, 2021.
2. Morgan purchased $243,000 of inventory on account.
3. Morgan sold for $491,000 cash, inventory which cost $261,000. Morgan also collected $31,915 in sales taxes.
4. Morgan paid $234,000 in accounts payable.
5. Morgan paid $15,000 in sales taxes to the state.
6. Paid other operating expenses of $21,000.
7. On January 31, 2020, the payroll for the month consists of salaries and wages of $56,000. All salaries and wages are subject to 7.65% FICA taxes. A total of $8,500 federal income taxes are withheld. The salaries and wages are paid on February 1.


Adjustment data:

8. Interest expense of $233 has been incurred on the notes payable.
9. The insurance for the year 2020 was prepaid on December 31, 2019.
10. The equipment was acquired on December 31, 2019, and will be depreciated on a straight-line basis over 5 years with a $3,120 salvage value.
11. Employer’s payroll taxes include 7.65% FICA taxes, a 5.4% state unemployment tax, and an 0.8% federal unemployment tax.

1. Prepare an adjusted trial balance at January 31, 2020. (Round answers to 0 decimal places, e.g. 5,275.)
2. Prepare an income statement. (Round answers to 0 decimal places, e.g. 5,275.)

3. Prepare an owner’s equity statement for the month ending January 31, 2020. (Round answers to 0 decimal places, e.g. 5,275.)
4. Prepare a classified balance sheet as of January 31, 2020. (List current assets in order of liquidity. Round answers to 0 decimal places, e.g. 5,275.)

In: Accounting

How much do wild mountain lions weigh? Adult wild mountain lions (18 months or older) captured...

How much do wild mountain lions weigh? Adult wild mountain lions (18 months or older) captured and released for the first time in the San Andres Mountains gave the following weights (pounds):

70 110 134 129 60 64

Assume that the population of x values has an approximately normal distribution.

(a) Use a calculator with mean and sample standard deviation keys to find the sample mean weight x and sample standard deviation s. (Round your answers to one decimal place.)

x = lb
s = lb


(b) Find a 75% confidence interval for the population average weight μ of all adult mountain lions in the specified region. (Round your answers to one decimal place.)

lower limit     lb
upper limit    

lb

Do you want to own your own candy store? Wow! With some interest in running your own business and a decent credit rating, you can probably get a bank loan on startup costs for franchises such as Candy Express, The Fudge Company, Karmel Corn, and Rocky Mountain Chocolate Factory. Startup costs (in thousands of dollars) for a random sample of candy stores are given below. Assume that the population of x values has an approximately normal distribution.

90 177 128 92 75 94 116 100 85

(a) Use a calculator with mean and sample standard deviation keys to find the sample mean startup cost x and sample standard deviation s. (Round your answers to one decimal place.)

x = thousand dollars
s = thousand dollars


(b) Find a 90% confidence interval for the population average startup costs μ for candy store franchises. (Round your answers to one decimal place.)

lower limit     thousand dollars
upper limit     thousand dollars

Over the past several months, an adult patient has been treated for tetany (severe muscle spasms). This condition is associated with an average total calcium level below 6 mg/dl. Recently, the patient's total calcium tests gave the following readings (in mg/dl). Assume that the population of x values has an approximately normal distribution.

9.7 8.6 10.9 8.9 9.4 9.8 10.0 9.9 11.2 12.1

(a) Use a calculator with mean and sample standard deviation keys to find the sample mean reading x and the sample standard deviation s. (Round your answers to two decimal places.)

x = mg/dl
s = mg/dl


(b) Find a 99.9% confidence interval for the population mean of total calcium in this patient's blood. (Round your answer to two decimal places.)

lower limit     mg/dl
upper limit     mg/dl


(c) Based on your results in part (b), do you think this patient still has a calcium deficiency? Explain.

Yes. This confidence interval suggests that the patient may still have a calcium deficiency.Yes. This confidence interval suggests that the patient no longer has a calcium deficiency.     No. This confidence interval suggests that the patient may still have a calcium deficiency.No. This confidence interval suggests that the patient no longer has a calcium deficiency.

What percentage of hospitals provide at least some charity care? Based on a random sample of hospital reports from eastern states, the following information is obtained (units in percentage of hospitals providing at least some charity care):

57.2 55.9 52.5 65.9 59.0 64.7 70.1 64.7 53.5 78.2

Assume that the population of x values has an approximately normal distribution.

(a) Use a calculator with mean and sample standard deviation keys to find the sample mean percentage x and the sample standard deviation s. (Round your answers to one decimal place.)

x = %
s = %


(b) Find a 90% confidence interval for the population average μ of the percentage of hospitals providing at least some charity care. (Round your answers to one decimal place.)

lower limit     %
upper limit     %

In: Statistics and Probability

Which one of the following best fits the description of a private placement? A. 3-year commercial...

Which one of the following best fits the description of a private placement?

A. 3-year commercial bank loan B. 10-year loan from an insurance company C. 2-year direct business loan D. 3-year loan to a firm by its original founder E. 20-year bonds sold in the public markets

In: Finance

1. What does it mean biologically to be human? How can evolution explain both the unity...

1. What does it mean biologically to be human? How can evolution explain both the unity and diversity of human phenotypes? Use specific examples of evidence and some version of the following terms in your answer: neutral genetic variation, evolution, natural selection, drift/bottleneck/founder effect, migration, mutation, and species/population/lineage.

In: Biology

Which of the following is not true for allelic diversity: Select one: It can be used...

Which of the following is not true for allelic diversity:

Select one:

It can be used to infer past demographic processes like founder events

It can be used to detect recent population genetic bottlenecks

It can be related to future adaptive potential

All of the listed statements are true

When low, it can buffer populations against inbreeding depression

In: Biology

Which one of the following best fits the description of private placement?

Which one of the following best fits the description of private placement? 

a) 3- year commercial bank loan

b) 3-year loan to a firm by its original founder

c) 10-year loan from an insurance company

d) 20-year bonds sold in the public markets

e) 2-year direct business loan

In: Finance

Do you agree with the statement: “There is only one boss, the customer. And you can...

Do you agree with the statement: “There is only one boss, the customer. And you can fire everyone in the company, from the president down, simply by spending your money elsewhere. -Sam Walton, founder of Wal-Mart

How does this thinking apply to your expectations of service? Does he support or refute them? Register your opinion

In: Accounting

Benjamin Disraeli once said ‘there three sorts of lies: lies, big lies and statistics.’ If one...

  • Benjamin Disraeli once said ‘there three sorts of lies: lies, big lies and statistics.’ If one of the co-founders (Jevons) claim that for economics to be an exact science, a perfect system of statistics is necessary, while the other co-founder (Walras) rejects the use of statistics, even though both praise mathematics and quantative analysis, how to resolve this contradiction?

In: Economics