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

Question 1dollys best issued 200 shares of its 10 common

Question 1 Dolly's Best issued 200 shares of its $10 common stock in exchange for used packaging equipment with a fair market value of $2,400. The entry to record the acquisition of the equipment would include a A. debit ...

1 is a trial balance that gives you the balances to use to

1) is a Trial Balance that gives you the balances to use to prepare the financial statements; 2) is a Template that you can use, note there are drop down choices - but, you can definitely use your own on Excel or similar ...

Assignemntpart 11the type of business organization that can

Assignemnt Part 1 1. The type of business organization that can continue indefinitely is known as a: a. sole proprietorship. b. partnership. c. corporation. d. None of the above answers are correct. 2. The purpose of the ...

Term paperfirmsteamsanadarko petroleumadams michaelaellis

Term Paper Firms Teams Anadarko Petroleum Adams, Michaela Ellis, Tatiana Jenkins, Jordan Samuel, Brittany Cheniere Energy Amaefule, Frankie Fields, Brittanie Johnson, Brandon Small, Devin Chevron Corporation Brown, Tori ...

As you begin this assignment review the broad range of

As you begin this Assignment, review the broad range of topics presented throughout the course related to using accounting information for decision making. Clearly, 8 weeks does not provide enough time to explore all the ...

Discussion liabilities please respond to the followingfor

Discussion: "Liabilities" Please respond to the following: For this week's eActivity, research one publicly traded company in which you are interested using the Internet and/or Strayer databases. Locate the company Websi ...

Accountingflexible budgets and cost variances please

Accounting Flexible Budgets and Cost Variances: Please respond to one of the following: Option 1 Suggest how management can use the real-time variance data analysis to improve operations. Evaluate the potential risk that ...

Reflectionbulldescribe and explain what you believe are the

Reflection • Describe and explain what you believe are the top three most important corporate taxation concepts you learned in this course. (Some of the topics, Enacting New Taxes, Calculating Tax Cost, Cash Method Versu ...

Assignmentair france-klm af a franco-dutch company prepares

Assignment Air France-KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF's financial statements and disclosure notes for the year ended Decemb ...

To write discussion post to given answerrequirementsdo not

To write discussion post to given answer 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). You can agree or disagree wit ...

  • 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