Acquisition Cost, Equity Method, Eliminating Entries, Second Year

Peak Entertainment acquires all of the stock of Saddlestone Inc. on January 1, 2020. In preparing to consolidate the trial balances of Peak and Saddlestone at December 31, 2021 (two years after the acquisition), you assemble the following information:

Date-of-acquisition information:

• Value of stock given up to acquire Saddlestone: $20,000,000.

• Direct merger costs: $250,000.

• Saddlestone’s shareholders’ equity: $7,200,000, consisting of capital stock, $2,000,000; retained earnings, $5,000,000; accumulated other comprehensive income, $200,000.

• Fair value of earnings contingency agreement to be paid in cash: $300,000.

• Fair value of previously unrecorded identifiable intangibles (5-year life): $2,000,000. There are no revaluations of Saddlestone’s reported net assets.

Information for 2020 and 2021:

• Saddlestone’s reported net income for 2020: $3,000,000; for 2021: $3,500,000.

• Saddlestone’s reported other comprehensive income for 2020: $100,000 net income; for 2021: $25,000 net loss.

• Saddlestone declared and paid dividends of $1,000,000 each year.

• Goodwill and identifiable intangibles are not impaired in 2020; goodwill is impaired by $200,000 in 2021.

Required

a. Prepare the 2020 and 2021 journal entries made by Peak to record its investment, using the complete equity method.

Enter numerical answers using all zeros (do not abbreviate in thousands or in millions).

b. Prepare the consolidation eliminating entries made at December 31, 2021.

Enter numerical answers using all zeros (do not abbreviate in thousands or in millions).

On January 1, 2020, Aumont Company sold 12% bonds having a maturity value of $500,000 for $537,907, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2020, and mature January 1, 2025, with interest payable December 31 of each year. Aumont Company allocates interest and unamortized discount or premium on the effective-interest basis. Prepare the journal entry at the date of the bond issuance. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

a.Prepare the journal entry at the date of the bond issuance

b.Prepare a schedule of interest expense and bond amortization for 2020–2022.

c.Prepare the journal entry to record the interest payment and the amortization for 2020.

d.Prepare the journal entry to record the interest payment and the amortization for 2022.

Prepare the journal entry at the date of the bond issuance. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Prepare a schedule of interest expense and bond amortization for 2020–2022. (Round answer to 0 decimal places, e.g. 38,548.)

Prepare the journal entry to record the interest payment and the amortization for 2020. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Prepare the journal entry to record the interest payment and the amortization for 2022. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Question 1: Partial year’s depreciation; alternative methods; exchange/disposal of PPE

Videotron Ltee completed the following transactions involving printing equipment.

Machine 6690 was purchased for cash on May 1, 2020, at an installed cost of $72,900. Its useful life was estimated to be four years with an $8,100 trade-in value. Straight-line depreciation was recorded for the machine at the ends of 2020 and 2021.

On August 5, 2020, it was traded for Machine 6691, which had an installed cash price of $54,000. A trade-in allowance of $40,500 was received and the balance was paid in cash. The new machine’s life was estimated at five years with a $9,450 trade-in value. The fair values of Machines 6690 and 6691 were not reliably determined at the time of the exchange. Double-declining-balance depreciation was recorded on each December 31 of Machine 6691’s life. On February 1, 2025, it was sold for $13,500.

Machine 6711 was purchased on February 1, 2025, at an installed cash price of $79,650. It was estimated that the new machine would produce 75,000 units during its useful life, after which it would have an $8,100 trade-in value. Units-of-production depreciation was recorded on the machine for 2025, a period in which it produced 7,500 units of product. Between January 1 and October 3, 2026, the machine produced 11,250 more units. On October 3, 2026, it was sold for $54,000

Required

Prepare journal entries to record:

1. The depreciation expense recorded to the nearest whole month on the first December 31 of each machine’s life. (for units-of-production, round the rate per unit to three decimal places).
2. The purchase/exchange/disposal of each machine.

Question 2: Intangible assets

On February 3, 2020, Secure Software Group purchased the patent for a new software for cash of $220,800. The company expects the software to be sold over the next five years and uses the straight-line method to amortize intangibles.

Required

1. Prepare entries to record the:

1. Purchase of the software patent.
2. Straight-line amortization for the year ended December 31, 2020, calculated to the nearest whole month. Round to the nearest dollar.

2. On December 31, 2020, the company’s adjusted trial balance showed the additional asset accounts shown below. Prepare the asset section of the balance sheet at December 31, 2020, including the patent purchased on February 3, 2020.

Accounts receivable………………………………$285,600

Accumulated depreciation, equipment……………$259,200

Accumulated depreciation, building………………$189,000

Allowance for doubtful accounts……………………$8,400

Cash………………………………………………. $103,200

Equipment…………………………………………$477,600

Building………………………………………… $595,200

Land………………………………………………. $ 110,400

Merchandise inventory…………………………… $ 135,600

Blue Department Store converted from the conventional retail method to the LIFO retail method on January 1, 2020, and is now considering converting to the dollar-value LIFO inventory method. During your examination of the financial statements for the year ended December 31, 2021, management requested that you furnish a summary showing certain computations of inventory cost for the past 3 years.

Here is the available information.

Compute the cost of inventory on hand at December 31, 2019, based on the conventional retail method. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987)

Compute the inventory to be reported on December 31, 2019, in accordance with procedures necessary to convert from the conventional retail method to the LIFO retail method beginning January 1, 2020. Assume that the retail value of the December 31, 2019, inventory was $60,900. (Round ratios for computational purposes to 2 decimal places, e.g. 78.72% and final answer to 0 decimal places, e.g. 28,987.)

Without prejudice to your solution to part (b), assume that you computed the December 31, 2019, inventory (retail value $60,900) under the LIFO retail method at a cost of $36,845. Compute the cost of the store’s 2020 and 2021 year-end inventories under the dollar-value LIFO method. (Round ratios for computational purposes to 2 decimal places, e.g. 78.72% and final answer to 0 decimal places, e.g. 28,987.)

Malcolm Gladwell makes the case that the greatest revolution in science has been the move from searching for universals to the understanding of variability.  How will this revolution impact the future of innovative healthcare technology?

Malcolm Gladwell makes the case that the greatest revolution in science has been the move from searching for universals to the understanding of variability. How will this revolution impact the future of innovative healthcare technology?

Use the five competitive forces model to describe how information technology might be used to provide a winning position for each of these businesses:

a. A global advertising agency

b. An insurance company

Use the five competitive forces model to describe how information technology might be used to provide a winning position for each of these businesses:

a. A global advertising agency

b. An insurance company

Could you please recommend some thesis statements, Research questions, problem statements for my MBA Thesis,

Topic: Block chain Technology

Starting with various types of cryptocurrencies