Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Cost Accounting Expert

Problem 1

Pre-Contribution Balance Sheets and Fair Values
June 30, 20X9
(in thousands of $)

655_Balance sheet_1.jpg

Swag Co. gets Perk on June 30, 20X9.  Both the companies have June 30 year-ends.  Before the combination, Swag and Perk had, respectively, 840,000 and 525,000 common shares, issued and outstanding.
Required:
Make Swag’s consolidated balance sheet under each of the following situations independently:
a) Swag purchased assets and supposed the liabilities of Perk by paying $1,400,000 in cash and issuing a $12,600,000 note.
b) Swag issued 280,000 common shares in exchange for all of Perk’s outstanding shares.  Fair value of Swag shares was $14,000,000.
c) In exchange for all of Perk’s outstanding shares, Swag paid $700,000 cash and issued 189,000 common shares with the market value of $9,450,000.

Problem 2
Balance Sheets
December 31, 20X3

1387_Balance sheet_2.jpg

Income Statements
Year Ended December 31, 20X3

                            Green Tower Ltd.      Blue Loft Ltd.

Sales revenue           $1,560,000          $1,283,100
Cost of goods sold     1,040,000           845,000
                               ______               ______   

                               520,000              438,100
Gain on sale of land   ______               273,000

                               ______             ______   

                              520,000           711,100
Operating expense    305,500    464,100
   Net income    214,500    247,000


Income Statements
Year Ended December 31, 20X3
Statements of Retained Earnings
Year Ended December 31, 20X3
                                                          Green Tower Ltd.    Blue Loft Ltd.
Retained earnings, December 31, 20X2    $1,498,900            $ 429,000
Net income                                               214,500             247,000
Retained earnings, December 31, 20X3       $1,713,400         $ 676,000

Blue Loft Ltd.
Carrying and Fair Values
January 1, 20X2

                                     Carrying Value         Fair Value
Cash                               $   104,000           $   104,000
Accounts receivable             128,700              128,700
Inventory                           231,400              253,500
Land                                  650,000               811,000
Equipment                          390,000               151,000
Accumulated amortization    (260,000)    
Accounts payable                91,000                  91,000
Bonds payable                    260,000                260,000
Common shares                   325,000                   -
Retained earnings                 568,100                   -

• On January 1, 20X2, Green Tower Ltd. obtain all the outstanding common shares of Blue Loft Ltd. for $1,409,200 cash.

• At December 31, 20X2, Green Tower’s inventory incorporated goods which it had purchased from Blue Loft for $58,500.  Intercompany profit on these goods was $15,600.  All these goods were sold to third parties in 20X3.

• During 20X3, Green Tower purchased goods from Blue Loft for $195,000.  Blue Loft earned a gross profit of $65,000 on this sale.  At December 31, 20X3, Green Tower still had 40% of these goods in its inventory.

• During 20X3, Green Tower sold goods to Blue Loft for $507,000.  Green Tower earned a gross profit of $117,000 on this sale.  At December 31, 20X3, Blue Loft still had 20% of these goods in its inventory.

• In December, 20X3, Blue Loft sold a tract of land to Green Tower for $923,000. Blue Loft had purchased the land 8 years ago for $650,000.

• At the time of Green Tower’s acquisition, Blue Loft’s equipment had a remaining estimated useful life of 3 years.  Blue Loft uses the straight-line method of amortization, with no residual value.

Required:

Make the consolidated financial statements for 20X3 using the direct method.  

Problem 3

Cox Ltd. acquired 70% of the common shares of March Co. at the beginning of 20X7.  At the acquisition date, March’s shareholders’ equity consisted of the following:
             Common shares        $720,000
             Retained earnings      360,000

The only acquisition differential pertained to goodwill.
Cox’s “Investment in March” general ledger account is as follows:
1/2/X7    Cost                     $ 781,200           12/31/X7  Dividends  $33,600
12/31/X7 Investment Income   62,160            12/31/X8  Dividends    42,000
12/31/X8 Investment Income   76,440            12/31/X9  Dividends    50,400
12/31/X9 Investment income   94,080   
        Balance                         $ 887,880

March generally declares half of its profits as dividends.

Cox uses the entity theory method to consolidate its subsidiary.

Required:

a) Compute the total amount of dividends declared by March for 20X7.
b) Compute March’s profit for 20X8. 
c) Compute the non-controlling interest amounts for Cox’s 20X9
i. consolidated income statement, and 
ii. consolidated balance sheet.
d) Compute the amount of goodwill that should appear on Cox’s 20X9 consolidated balance sheet.

Cost Accounting, Accounting

  • Category:- Cost Accounting
  • Reference No.:- M9773
  • Price:- $65

Guranteed 36 Hours Delivery, In Price:- $65

Have any Question? 


Related Questions in Cost Accounting

Assignmentdolan products is a small family owned audio

Assignment Dolan Products is a small, family owned audio component manufacturer. Several years ago, the company decided to concentrate on only three models, which were sold under many brand names to electronic retailers ...

Assignment discussion-cost accumulation systemwhen

Assignment: Discussion-Cost Accumulation System When companies accumulate costs, they generally use either a job-order or a process costing system. The type of system used often varies based on the type of product or ser ...

Questionyou are just from attending a conference on

QUESTION You are just from attending a conference on Activity Based Costing (ABC) and you now wish to put your knowledge to practice by applying the principles of ABC to the four products currently made and sold by your ...

Module 3 - slpstrategic choicessimulationin module 3 you

Module 3 - SLP Strategic Choices SIMULATION In Module 3, you will use CVP analysis to inform the pricing of your 3 products. SCENARIO CONTINUATION: You've now completed SLP2, and it the date is (once again) January 1, 20 ...

Accounting1 lisa inc estimates that its employees will

Accounting 1. Lisa Inc. estimates that its employees will utilize 200,000 direct labor hours during the coming year. Total overhead costs are estimated to be $6,700,000 and machine hours are estimated to be 100,000. Actu ...

Assignment1 the following information is from the

Assignment 1. The following information is from the manufacturing budget and the budgeted financial statements of Fabor Fabrication: Compute the budgeted amounts for: a. Purchases of direct materials during the year. b. ...

Requirementsdo not use any direct quotes andor cut and

Requirements: Do not use any direct quotes and/or cut and pasted information (i.e. your discussion is to be 100% your thoughts, ideals and insights). A minimum 350 words are required (this is the minimum and totally feel ...

Accounting assignment1 punch products inc is considering

Accounting Assignment 1. Punch Products, Inc. is considering purchasing a new production machine and has assembled the following information from two vendors of the machine that it is considering buying:   A Products B P ...

Assignmentwhile a form of abc was being used by general

Assignment While a form of ABC was being used by General Electric back in the sixties, widespread use of ABC didn't began in the United States until the late eighties. The early focus of ABC was on developing more reliab ...

Cost behaviordetermining cost behavior please respond to

Cost Behavior Determining Cost Behavior: Please respond to one of the following: Option 1 Choose a company that interests you. It could be your current employer, a past employer, or even a future employer. Compare and co ...

  • 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

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen