Company P acquired 80% of the outstanding common stock of the Company S by issuing common stock with a market value of $550,000. The balance sheet of Company S was as follows on the acquisition date: Assets Cash Inventory Land Building (net) Total $50,000 $500,000 $ 50,000 $600,000 120,000 100,000 350,000 $620,000 Liabilities and Equity Liabilities Common stock, $10 par Other paid-in capital Retained earnings Total $120,000 100,000 150,000 The market values were as follows: Inventory, $130,000; Land, $120,000; Building, $400,000. What is the amount that will appear as Cash Provided (Used) by Investing Activities on the consolidated statement of cash flows, as a result of this purchase? 250,000 $620,000
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- Armadillo Enterprises acquired the following equity investmentsat the beginning of year 1 as trading investments. Description Number of shares Market price per share Total price Finestra Company 15,000 x $25 $387,500 BVD Company 20,000 X$18 $360,000 Market values at theend of Years 1 &2 are presented below: Market/Fair Value End of year 1 End of year 2 Finestra Company $19 $23 BVD Company |$22 $28 REQUIREMENTS: Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises sells 15,000 shares of BVD Company for $16at the beginning of year 2. Prepare the journal entry to record thesale. Prepare the adjusting journal entry required at the end of year2. Assume that ArmadilloEnterprises now holds these investments asavailable-for-sale. Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises…On 30 June 2020 Pink Ltd acquired all assets (except for cash) and assumed all liabilities (except for debentures) of Purple Ltd. At this date, the carrying amounts of assets and liabilities of Purple Ltd were at fair value and consisted of: $15,000 32,000 40,000 Cash Accounts payable $9,000 Accounts receivable Debentures (10%) Share capital ($2 shares) Retained earnings 40,000 Inventory 110,000 Shares in listed companies 90,000 48,000 Motor Vehicle 45,000 Accumulated depreciation (15,000) In exchange for these net assets, Pink Ltd agreed to: issue two (2) Pink Ltd shares for every five (5) shares in Purple Ltd. On 30 June 2020 Pink Ltd shares were valued at $5.50 provide sufficient additional cash in order for Purple Ltd to pay out the debentures (including interest) and liquidation costs of $3,500. Required: Prepare an acquisition analysis for Pink Ltd's acquisition of Purple Ltd. wwwwPeace Company issued common shares with a par value of $59,000 and a market value of $159,300 in exchange for 30 percent ownership of Symbol Corporation on January 1, 20X2. Symbol reported the following balances on that date: Assets Cash Accounts Receivable Inventory (FIFO basis) Land Buildings & Equipment SYMBOL CORPORATION Balance Sheet January 1, 20X2 Book Value Fair Value $ 57,000 86,000 137,000 $ 57,000 86,000 167,000 59,000 74,000 505,000 328,000 (245,000) 33,000 Less: Accumulated Depreciation Patent Total Assets Liabilities & Equities Accounts Payable Bonds Payable Common Stock Additional Paid-In Capital Retained Earnings Total Liabilities & Equities $ 599,000 $ 745,000 $ 22,000 192,000 137,000 11,000 237,000 $ 599,000 $ 22,000 192,000 The estimated economic life of the patents held by Symbol is 4 years. The buildings and equipment are expected to last 6 more years on average. Symbol paid dividends of $15,000 during 20X2 and reported net income of $87,000 for the year. Required:…
- Required: Compute basic and diluted EPS for the consolidated entity for 20X7. (Round your intermediate calculations and final answers to two decimal places.) Basic earnings per share Diluted earnings per share.The Ludel Company acquired the net assets of the Girl Conrad Company on January 1, 2018, and made the following entry to record the purchases:Current assets P100,000Equipment 150,000Land 50,000Buildings 300,000Goodwill 100,000Liabilities 80,000Common stock, P1 par 100,000Paid-in capital in excess of par 520,0001. Assuming that additional shares on January 1, 2020 would be issued on that date to compensate for any fall in the value of Ludel common stock below P16 per share. The settlement would be to cure the deficiency by issuing added shares based on their fair value on January 1, 2020. The fair price of the shares on January 1, 2020 was P10.What is the additional number of shares issued on January 1, 2020 to compensate for any fall in the value of the stock? a. 60,000b. 100,000c. 10,000d. 160,000 2. The Jonnie Company owns 75% of the Junior Company. On December 31, 2020, the last day of the accounting period, Junior sold to Jonnie a non-current asset for P200,000. The asset…On January 3, 2018,A Corp. purchased 25% of the voting common stock or C0.paying S2,500,000. A Cop. decided to use the equity method to account for this investment. Atthe ime of the investment, G Co, total stockholders' equity was S8,000,000. ACOIp. gathered the following intormation about G Co. assets and liabiiines Fair Value $500,000 1.300,0 00 0,000 Book Value S400,000 1.000,000 Buildings (10-year life) Equipment (5-year lite) Franchises (8-year life) For all other assets and liabilities, book value and fair vaue were equal. Any excess of cost over tair value was attributed to goodwill, which has not been impaired.
- GREY Corp's statement of financial position prior to the acquisition is shown as follows: ASSETS LIABILITIES AND EQUITY Cash 170,000 Liabilities 400,000 80,000 Accounts Receivable 50,000 Ordinary Share, P4 Inventories 100,000 Share Premium 320,000 Property, Plant and Equipment 880,000 Retained Earnings 400,000 TORRES Company will issue shares of P10 par value ordinary shares capital for all the assets and liabilities of GREY Company. As of acquisition date, TORRES Company's ordinary share capital has a current market value of P40 per share. The fair value of he current assets is P400,000 while that of the plant assets is P1,600,000. All the liabilities are correctly stated. TORRES Company issued sufficient share capital so that the fair value of the shares issued is equal to the fair market value of GREY Company's assets. To have goodwill of P200,000 the number of shares to be issued by TORRES Company should beKay Leni Tayo issue 50,000 of its P5 par value common stock for the net assets of AngatBuhay. AngatBuhay's trial balance at the date of acquisition shows the following: Current Assets 420,000 PPE 980,000 Liabilities 500,000 Common Stock 180,000 APIC 320,000 Retained Earnings 400,000 AngatBuhay's current assets are appraised at P550,000 and the PPE was also appraised at P1,800,000. Accordingly, Kay Leni Tayo issued common stock with the total market value equal to AngatBuhay's net assets including goodwill of P200,000. What is the market value per share of Kay Leni Tayo's share at the time of business combination?The balance sheets of E Ltd. and J Ltd. on December 30, Year 6, were as follows: Cash and receivables Inventory Plant assets (net) Intangible assets Current liabilities Long-term debt Common shares Retained earnings (deficit) Costs of arranging the acquisition Costs of issuing shares. On December 31, Year 6, E Ltd. issued 497 shares, with a fair value of $26 each, for 70% of the outstanding shares of J Ltd. Costs involved in the acquisition, paid in cash, were as follows: Plant assets Long-term debt The carrying amounts of J Ltd.'s net assets were equal to fair values on this date except for the following: Assets Liabilities and Equity J Ltd. $ 20,900 9,700 71,900 7,400 $ 109,900 $ 64,400 $ 30,100 98,900 45,200 155,800 46,600 91,500 (12,000) $ 410,600 $ 109,900 Fair value $ 65,700 42,800 E Ltd. was identified as the acquirer in the combination. Required: (a) Prepare the consolidated balance sheet of E Ltd. on December 31, Year 6, under the identifiable net assets method. Assets E Ltd.…
- Company P acquired 80% of the outstanding common stock of the Company S by isuing common stock with a market value of $550,000 The balance sheet of Company S was as follow on the acquisition date: Assets Liabilities and Equity Cash $ 50,000 Liabilities $120,000 Inventory 120,000 Common stock, $10 par 100,000 Other paid-in capital 150,000 250,000 Land 100,000 Building (net) 350,000 Retained earnings Total $620,000 Total $620,000 The market values were as follows. Inventory, $130,000; Land, $120,000, Building, $400,000. What is the amount that will appear as Cash Provided (Used) by Investing Activities on the consolidated statement of cash flows, as a result of this purchase? O $600,000 O $500,000 O $50,000 O SOPeace Company issued common shares with a par value of $58,000 and a market value of $165,300 in exchange for 30 percent ownership of Symbol Corporation on January 1, 20X2. Symbol reported the following balances on that date: Assets Cash Accounts Receivable Inventory (FIFO basis) Land Buildings & Equipment Less: Accumulated Depreciation Patent Total Assets Liabilities & Equities Accounts Payable SYMBOL CORPORATION Balance Sheet January 1, 20X2 Bonds Payable Common Stock Additional Paid-In Capital Retained Earnings Total Liabilities & Equities Book Value Fair Value $ 57,000 $ 57,000 97,000 97,000 133,000 163,000 55,000 70,000 505,000 326,000 (245,000) Investment income (loss) Balance in the investment account $ 602,000 $ 22,000 172,000 148,000 12,000 248,000 $ 602,000 32,000 $ 745,000 $ 22,000 172,000 The estimated economic life of the patents held by Symbol is 10 years. The buildings and equipment are expected to last 12 more years on average. Symbol paid dividends of $18,000 during…On 1/1/21 Pinn Corporation acquired all of Simm Corporation’s common stock by issuing #250,000 shares of $1 par value common stock with a current market value of $10,000,000. Related legal fees were $300,000 and were paid in cash. The book value and fair values of Simm’s accounts are given below: Book Value DR (CR) Fair Value DR (CR) Current Assets 1,900,000 1,900,000 Plant Assets 1,100,000 1,200,000 Current Liabilities (1,000,000) (1,000,000) Long Term Liabilities (500,000) (475,000) Common Stock (800,000) Retained Earnings (700,000) In addition, Simm has a previously unrecorded identifiable Intangible Asset with a fair value of $500,000. Required: Prepare the entry on Pinn’s books to record the acquisition Prepare the working paper eliminating entries to consolidate the balance sheets of Pinn Corporation and Simm Corporation at the date of acquisition.