Solve the case using incomplete equity method not equity method
Case 3:
In 1/1/2019 comp...
Business, 01.01.2021 21:10 karenjunior
Solve the case using incomplete equity method not equity method
Case 3:
In 1/1/2019 company A purchased 75% of company B outstanding share capital cash of 25000 $, and it issued 50.000 shares for investment. The book value of issued shares is 6$, and market value is 15$. And it paid 4000$ cash as a commission and 8000$ auditing and legal expenses for combination.
Company A used purchase method to account for investment in company B and
used incomplete equity method to address the change of investment
account
Below are the financial statements of A and B companies before investment.
Account
Cash Receivables Inventory Equipment Cars Total assets Payable Share capital Additional paid-in eapita Retained Earnings
Total
The financial statement of parent and subsidiary at 31/12/2019 reported as follow:
Income statements at 31/12/2019
A company 800000
(650000)
150000 (25000)
125000 28125 153125
Retained earnings at 31/12/2019 A company 13000 153125 (130000) 36125
SFP on 31/12/2019 A company 123000
165000 175000 18750 784375
80000
30000
1376125 35000 130000 650000
525000 36125 1376125
B company 10000
60000 (25000) 45000
B company 44000 85000
48000
85000
13000
Sales Cost of goods sold Gross profit
Managerial Net profit
and sales expenses
Investment Year net profit
Retained earning 1/1 Year profits or losses Dividends Retained earnings 31/12
Cash Receivables Inventory Prepaid dividends Investment in company B Equipment's, net
Cars
Total assets Payable Accrued dividends Share capital Additional paid in capital Retained earnings Total liabilities and equity
profit in subsidiary
Company A
190000 130000
180000 100000 60000 660000
210000 350000 75000 25000 660000
Company B book value fair value 120000 80000 50000 800XXO 90000
60000 45000
60000
215000
65000 120XX00
20000
215000
200XX)
B company 150000 (80000)
70000 (10000)
60000
275000
65000
18750
120000
20000 45000 275000
The following are additional information related to subsidiary company:
1- Remaining age of Equipment that are in the subsidiary company at date of acquisition (1/1/2019) 2- At the year of 2019, 75% of inventory have been sold. And remaining inventory have been sold on 2020,
is 4 years.
3- Remaining age of Cars that are in the subsidiary company at date of acquisition (1/1/2019) is 4 years.
Requirement:
1- Prepare the consolidated financial statement at the date of acquisition
2- Prepare acquisition
the consolidate financial statements for the year of
Answers: 3
Business, 21.06.2019 17:40
Carlos would like to start saving for his son’s college expenses. which type of savings account should carlos open? ida money market 529 plan basic savings account
Answers: 2
Business, 22.06.2019 00:40
Gdonald was unhappy that his company did not provide good transport facilities. he found it very strenuous to drive to work on his own, and this eventually led to job dissatisfaction. hence, he recommended ways to solve this problem. according to the evln model, this information suggests that donald's main reaction to job dissatisfaction was:
Answers: 3
Business, 22.06.2019 06:30
If a team of three workers, each making the u.s. federal minimum wage, produced these 12 rugs, what would the total labor cost be? don't forget that these workers would be working overtime.
Answers: 3
Business, 22.06.2019 07:40
Alicia has a collision deductible of $500 and a bodily injury liability coverage limit of $50,000. she hits another driver and injures them severely. the case goes to trial and there is a verdict to compensate the injured person for $40,000 how much does she pay?
Answers: 1
Mathematics, 03.12.2019 23:31
Mathematics, 03.12.2019 23:31
History, 03.12.2019 23:31
English, 03.12.2019 23:31
Mathematics, 03.12.2019 23:31
Mathematics, 03.12.2019 23:31
Biology, 03.12.2019 23:31
English, 03.12.2019 23:31
Health, 03.12.2019 23:31
Mathematics, 03.12.2019 23:31
English, 03.12.2019 23:31
History, 03.12.2019 23:31
Computers and Technology, 03.12.2019 23:31
Health, 03.12.2019 23:31
Social Studies, 03.12.2019 23:31