Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2023, for $4,100 cash. As of that date Clark has the following trial balance: Cash Accounts receivable Debit $ 500 Credit 600 Inventory 900 Buildings (net) (5-year life) 1,600 Equipment (net) (2-year life) 1,000
Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2023, for $4,100 cash. As of that date Clark has the following trial balance: Cash Accounts receivable Debit $ 500 Credit 600 Inventory 900 Buildings (net) (5-year life) 1,600 Equipment (net) (2-year life) 1,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 8MC
Related questions
Question
Note:-
- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
- Answer completely.
- You will get up vote for sure.
![Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2023, for $4,100 cash. As of that date Clark has the following trial balance:
Debit
Credit
Cash
Accounts receivable
$ 500
600
Inventory
900
Buildings (net) (5-year life)
1,600
Equipment (net) (2-year life)
1,000
Land
900
Accounts payable
Long-term liabilities (due 12/31/25)
Common stock
Additional paid-in capital
$ 400
1,900
1,000
700
Retained earnings
1,500
$ 5,500
$ 5,500
Total
Net income and dividends reported by Clark for 2023 and 2024 follow:
2023
2024
Net income
Dividends
$ 120
$ 140
40
50
The fair value of Clark's net assets that differ from their book values are listed below:
Fair Value
Buildings
Equipment
Land
Long-term liabilities
$ 1,200
1,350
1,300
1,750
Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life.
Compute the amount of Clark's buildings that would be reported in a December 31, 2023, consolidated balance sheet.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff110307c-6212-4e88-9e3e-d4aec6bffdcc%2F95e531e0-3fcf-4f3e-8af9-431007096521%2F3gqo16_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2023, for $4,100 cash. As of that date Clark has the following trial balance:
Debit
Credit
Cash
Accounts receivable
$ 500
600
Inventory
900
Buildings (net) (5-year life)
1,600
Equipment (net) (2-year life)
1,000
Land
900
Accounts payable
Long-term liabilities (due 12/31/25)
Common stock
Additional paid-in capital
$ 400
1,900
1,000
700
Retained earnings
1,500
$ 5,500
$ 5,500
Total
Net income and dividends reported by Clark for 2023 and 2024 follow:
2023
2024
Net income
Dividends
$ 120
$ 140
40
50
The fair value of Clark's net assets that differ from their book values are listed below:
Fair Value
Buildings
Equipment
Land
Long-term liabilities
$ 1,200
1,350
1,300
1,750
Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life.
Compute the amount of Clark's buildings that would be reported in a December 31, 2023, consolidated balance sheet.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning