Ask Question, Ask an Expert


Ask Accounting Basics Expert

Paulcraft Corporation builds large powerboats. On January 1 2011 Paulcraft acquires Switzer Corporation, a company that manufactures smaller power boats. Paulcraft pays cash in exchange for Switzer common stock. Switzer has the following balance sheet on January 1 2011:

Switzer Corporation
Balance Sheet
January 1, 2011
accounts receivable $82,000
Inventory 40,000
Buildings 60,000
Accumulated depreciation (50,000)
Equipment 100,000
Accumulated depreciation (30,000)
Total Assets $402,000
Liabilities and equity
current liabilities $90,000
Bonds payable 100,000
Common stock ($1 par) 10,000
Paid-in capital in excess of par 90,000
Retained earnings 112,000
Total liabilities and equity $402,00
Appraisal values for identifiable assets and liabilities are as follows:
Accounts receivable $82,000
Inventory (sold during 2011) 38,000
Land 150,000
Buildings (20 year life) 280,000
Equipment (5 year life) 100,000
Current liabilities 90,000
Bonds payable (5 year life) 96,000
Any remaining excess is attributed to goodwill.
Assume that Paulcraft pays $480,000 for 100% of Switzer common stock. Paulcraft uses the cost method to account for its investment in Switzer. Paulcraft and Switzer have the following trial balances on December 31 2013:
cash 100,000
Accounts receivable 90,000
Inventory 120,000
Land 100,000
Investment in Switzer 480,000
Buildings 800,000
Accumulated depreciation (220,000)
Equipment. 150,000
Accumulated depreciation (90,000)
Current liabilities (60,000)
Common stock (100,000)
Paid-in capital in excess of par (900,000)
Retained earnings, January 1, 2013 (315,000)
Sales (800,000)
Cost of goods sold 450,000
Depreciation expense-building 30,000
Depreciation expense-equipment 15,000
other expenses 140,000
Dividend income (10,000)
Dividends declared 20,000
Total 0
cash 110,000
Accounts receivable 55,000
Inventory 86,000
Land 60,000
Buildings 250,000
Accumulated depreciation (80,000)
Equipment 100,000
Accumulated depreciation (72,000)
Current liabilities (102,000)
Bonds payable (100,000)
Common stock (10,000)
Paid-in capital in excess of par (90,000)
Retained earnings, January 1, 2013 (182,000)
Sales (350,000)
Cost of goods sold 210,000
Depreciation expense- buildings 15,000
Depreciation expense-equipment 14,000
Other expenses 68,000
Interest expense 8,000
Dividends declared 10,000
Total 0
1. Prepare a value analysis and a determination and distribution of excess schedule for the investment in Switzer.

2. Complete a consolidated worksheet for Paulcraft Corporation and its subsidiary Switzer Corporation as of December 31, 2013. Prepare supporting amortization and income distribution schedules.


Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M942156

Have any Question? 

Related Questions in Accounting Basics

Government and nonprofit accountingyour portfolio project

Government and Nonprofit Accounting Your Portfolio Project will provide specific answers to the questions that follow. Apply what you have learned in this course to your answers to these questions. Scenario A Is fund acc ...

A tomato farmer with a very large farm of approximately

A tomato farmer with a very large farm of approximately 2200 acres had heard about a new type of rather expensive fertilizer which would supposedly significantly increase his production. The frugal farmer wanted to test ...

Accounting theory and contemporary issues individual case

Accounting Theory and Contemporary Issues Individual case study Assignment- Assessment Description - Learning Outcome:  Research and argue a position in regard to a contemporary issue in the accounting profession. Evalua ...

Landscaping service pricing analysisyou own a landscaping

Landscaping Service Pricing Analysis You own a landscaping company for residential properties. Your average cost for design and implement a standard landscape change per residential property is as follows Bushes @ $130 F ...

Mnc paper and presentationgoogle company paper and

MNC Paper and Presentation: GOOGLE COMPANY Paper and Presentation will consist of research to write a paper on an annual SEC 10-K report filed by a public multinational corporation with the U.S. Securities and Exchange C ...

Taskas part of the planning process for your new accounting

TASK As part of the planning process for your new accounting information system, your manager has asked that you prepare flowcharts. This graphic presents the flow of information through the accounting cycles. • Using th ...

Accounting assignmentyour response should be 2-3 pages

Accounting Assignment YOUR RESPONSE SHOULD BE 2-3 PAGES COMPRISING BOTH RESEARCH CASES. Professional Research 1 Your client took accounting a number of years ago and was unaware of comprehensive income reporting. He is n ...

Question 1the following transactions occurred during july o

Question 1 The following transactions occurred during July: o Received $900 cash for services provided to a customer during July. o Received $2,200 cash investment from Barbara Hanson, the owner of the business. o Receiv ...

Assignment- fraud in the accounting information systemfor

Assignment- Fraud in the Accounting Information System For this assignment, research the Internet or Strayer databases to locate a firm that was involved in a fraud and / or embezzlement case. Explain how the firm's acco ...

Guidelines for literature critiquesstudents are require to

Guidelines for Literature Critiques Students are require to read and understand assigned article. Students must submit a critique of assigned academic article. Please follow the format to complete your assignment. Detail ...

  • 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