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

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 ...

Assignmentresearch the foreign corrupt practices actaddress

Assignment: Research "THE FOREIGN CORRUPT PRACTICES ACT" Address, at a minimum, the following: The rationale for the Act (i.e. why was it implemented) What the Act prohibits How the Act impacts businesses nationally, and ...

Question 1 owners of business firms are the only people who

Question 1 Owners of business firms are the only people who need accounting information. Question 2  Requiring employees to take vacations is a weakness in the system of internal controls because it does not promote oper ...

1 the objective of a firms management should be to only

1. The objective of a firm's management should be to only undertake the projects that ________ the market value of shareholders' equity. a. decrease b. increase c. do not change d. provide zero change to e. none of the a ...

Shown below is activity for one of the products of denver

Shown below is activity for one of the products of Denver Office Equipment: January 1 balance, 500 units @ $55 $27,500 Purchases January 10 500 units @ $60 January 20 1,000 units @ $63 Sales: January 12 800 units January ...

Waupaca company establishes a 480 petty cash fund on

Waupaca Company establishes a $480 petty cash fund on September 9. On September 30, the fund shows $211 in cash along with receipts for the following expenditures: transportation-in, $51; postage expenses, $65; and misce ...

1 you are the manager of a payroll system your company is

1. You are the manager of a payroll system. Your company is going to replace the legacy payroll system with a more robust, Web-based version. Suggest two approaches that would minimize downtime and interruption to the pa ...

Assignmentthe company that i chose to research came to me

Assignment The company that I chose to research came to me on the way home from work this week while sitting in traffic. A string of several ads came on the radio and got a little frustrated that my Christmas tunes were ...

Analyze tootsie rolls 2015 consolidated statements of

Analyze Tootsie Roll's 2015 Consolidated Statements of Earnings and Retained Earnings. Discuss the relevance for a manufacturer of reporting a gross profit amount. Then calculate or report the 2015 Gross Profit Rate (%) ...

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 acquisition accounting to a real-world example. Requirements for the assignment: Each student will select ...

  • 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