Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Top Company obtained 100 percent of Bottom Company's common stock on January 1, 20X6 by issuing 12,500 shares of its own common stock, which had a $5 par value and a $15 fair value on that date. Bottom reported a net book value of $150,000 and its shares had a $20 per share fair value on that date. However, some of its plant assets (with a 5-year remaining life) were undervalued by $20,000 in the company's accounting records. Bottom had also developed a customer list with an estimated fair value of $10,000 and a remaining life of 10 years. Top Company uses the equity-method to account for its investment in Bottom.

During 20X6 Top and Bottom reported the following:

Net income: Top -$300,000 , Bottom - $200,000
Dividends declared: Top$25,00, Bottom - $15,000

Required:

Prepare each of the journal entries listed below related to Top's investment in Bottom.

1. Top's acquisition of Bottom.
2. Top's share of Bottom's 20X6 income.
3. Top's share of Bottom's 20X6 dividend income.
4. Top's amortization of excess acquisition price.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M947612

Have any Question? 


Related Questions in Accounting Basics

Assignment - perform the calculations using the financial

Assignment - Perform the calculations using the financial statements from their individual companies. Part I - Complete the following: Perform at least one profitability ratio to measure the income and operating success ...

Problem 1a two four-year-old companies are identical in all

Problem 1: a. Two four-year-old companies are identical in all respects except that Company A has used straight-line depreciation exclusively since inception while Company B has used double-declining balance depreciation ...

Big alrsquos pizza emporium a subsidiary of big alrsquos

Big Al’s Pizza Emporium, a subsidiary of Big Al’s Pizza, Inc., has decided to sell frozen pizzas in its restaurants. Restaurant customers will take these pizzas home and cook them. The restaurants will sell frozen meat p ...

A lorge corporation has collected the following information

A Lorge Corporation has collected the following information after its first year of sales. Sales... Description A Lorge Corporation has collected the following information after its first year of sales. Sales were $1,500 ...

Choose a manufacturing company as a basis for this

Choose a manufacturing company as a basis for this discussion. Select one of the following variances: • direct material price variance, • direct labor price variance, • direct material efficiency variance, • direct labor ...

Big alrsquos pizza inc a new subsidiary of big alrsquos

Big Al’s Pizza, Inc., a new subsidiary of Big Al’s Pizza Emporium, has been established to produce partially baked, flash-frozen, 16-inch meat pizzas to be sold wholesale to grocery and convenience stores and school cafe ...

Bond issuedetermine the valuation of long-term

Bond Issue Determine the valuation of long-term liabilities. Discussion Donald Lennon is the president, founder, and majority owner of Wichita Medical Corporation, an emerging medical technology products company. Wichita ...

1 k limited provided the following information as on

1. K Limited provided the following information as on 31.3.2009 Particulars Rs. Rs. Share capital: 2,50,000 equity shares of Rs. 10 each.   25,00,000 Profit & Loss a/c   3,50,000 Land & Building 12,00,000   Plant & Machi ...

Presentation on cybercrimemayfield electronics inc an

Presentation on CyberCrime Mayfield electronics, Inc., an international company has asked your accounting firm to share with its employees the threat of cybercrime and how the company can protect itself corporately as we ...

Project instructions-you have just been contracted as a

PROJECT INSTRUCTIONS- You have just been contracted as a budget consultant by LBJ Company, a distributor of bracelets to various retail outlets across the country. The company has done very little in the way of budgeting ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate