Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

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
Assets
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:
Paulcraft
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
Switzer
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

Transactions and fasb standards1 the new city college

Transactions and FASB Standards 1. The New City College reported deferred revenues of $612,000 as of July 1, 2014, the first day of its fiscal year. Record the following transactions related to student tuition and fees a ...

Requirement 1 -it was early november 20x5 and the

REQUIREMENT 1 - It was early November 20X5, and the Hydromaint people requested a meeting with you and Tom Lockhart.  They wished to brief you on several 20X5 events and strategy changes. Nick Riley reported that the mai ...

Assignment accounting qualitybased on the requirements of

Assignment: Accounting Quality Based on the requirements of the Sarbanes-Oxley Act and SEC reporting requirements for publically traded companies, Write a five page paper in which you: 1. Assess the roles of the Board of ...

Questionson may 5 2006 disney company completed an all

Questions On May 5, 2006, Disney Company completed an all stock acquisition of Pixar, a digital animation studio. Disney believes that the creation of high quality feature animation is a key driver of success across many ...

Assignmentpaper 1excel spreadsheet and 1-2 pagesconsider

Assignment Paper #1 Excel Spreadsheet and 1-2 pages Consider the following scenario: Andre has asked you to evaluate his business, Andre's Hair Styling. Andre has five barbers working for him. (Andre is not one of them.) ...

Accounting systems and assurance assessment internal

Accounting Systems and Assurance Assessment: Internal Control and information quality Accounting students learn how to process, analyse and use accounting information. It is also necessary to learn what contributes to th ...

Focus of the final paperyouve just been hired onto abc

Focus of the Final Paper You've just been hired onto ABC Company as the corporate controller. ABC Company is a manufacturing firm that specializes in making cedar roofing and siding shingles. The company currently has an ...

Accounting anonymousabsorption and variable costing please

Accounting Anonymous Absorption and Variable Costing: Please respond to one of the following: Option 1 Create a situation for determining performance evaluations and bonuses where absorption-costing operating income is u ...

If a nurse deposits 12000 today in a real estate investment

If a nurse deposits $12,000 today in a real estate investment trust (REIT) and the interest is compounded annually at 7% percent, what will be the value of this investment: a.) Five years from now? b.) Ten years from now ...

On the cash dividends become a liability of a

On the ________, cash dividends become a liability of a corporation. declaration date date of record end of the fiscal year payment date ________ are equity securities in which the investor owns 20% or more, but less tha ...

  • 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

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

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