Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Chapter 1, Problem 1.2.2C
To determine
Introduction: Acquisition is a corporate term used to represent purchase of another company and gaining the ownership of the company.
To calculate: The total price paid for the purpose of acquisition.
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These are two independent situations:
1. Pharoah Cosmetics acquired 13% of the 278,500 shares of common stock of Elite Fashion at a total cost of $14 per share on
March 18, 2022. On June 30, Elite declared and paid a $69,800 dividend. On December 31, Elite reported net income of
$263,120 for the year. At December 31, the market price of Elite Fashion was $15 per share.
2. Sheffield Inc. obtained significant influence over Kasey Corporation by buying 25% of Kasey's 30,500 outstanding shares of
common stock at a total cost of $11 per share on January 1, 2022. On June 15, Kasey declared and paid a cash dividend of
$32,100. On December 31, Kasey reported a net income of $120,900 for the year.
Prepare all the necessary journal entries for 2022 for Sheffield Inc. (Record journal entries in the order presented in the problem.
Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No…
Situation 1
Riverbed Cosmetics acquired 10% of the 215,000 shares of common stock of Martinez Fashion at a total cost of $12 per share on
March 18, 2020. On June 30, Martinez declared and paid $74,000 cash dividend to all stockholders. On December 31, Martinez
reported net income of $127,600 for the year. At December 31, the market price of Martinez Fashion was $13 per share.
Situation 2
Marin, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles's 31,300 outstanding shares of common
stock at a total cost of $9 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $36,600 to all
stockholders. On December 31, Seles reported a net income of $80,100 for the year.
Prepare all necessary journal entries in 2020 for both situations. (Credit account titles are automatically indented when amount is
entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Situation 1:
Novak Cosmetics acquired 10% of the 193,000 shares of common stock of Martinez Fashion at a total cost of $14 per share on March
18, 2025. On June 30, Martinez declared and paid $67,500 cash dividends to all stockholders. On December 31, Martinez reported
net income of $118,700 for the year. At December 31, the market price of Martinez Fashion was $15 per share.
Situation 2:
Splish, Inc. obtained significant influence over Seles Corporation by buying 40% of Seles's 30,700 outstanding shares of common stock
at a total cost of $8 per share on January 1, 2025. On June 15, Seles declared and paid cash dividends of $38,300 to all stockholders.
On December 31, Seles reported a net income of $84,200 for the year.
Prepare all necessary journal entries in 2025 for both situations. (List all debit entries before credit entries. Credit account titles are
automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account…
Chapter 1 Solutions
Advanced Accounting
Ch. 1 - Prob. 1UTICh. 1 - Prob. 3UTICh. 1 - Prob. 4UTICh. 1 - Prob. 5UTICh. 1 - Prob. 6UTICh. 1 - Prob. 7UTICh. 1 - Prob. 8UTICh. 1 - Prob. 9UTICh. 1 - Prob. 10UTICh. 1 - Prob. 1.1E
Ch. 1 - Prob. 1.2ECh. 1 - Prob. 1.3ECh. 1 - Prob. 2ECh. 1 - Prob. 5.1ECh. 1 - Prob. 5.2ECh. 1 - Prob. 6ECh. 1 - Lake craft Company has the following balance...Ch. 1 - Prob. 8.2ECh. 1 - Prob. 8.3ECh. 1 - Prob. 9.1ECh. 1 - Prob. 9.2ECh. 1 - Prob. 1A.1.1AECh. 1 - Prob. 1A.1.2AECh. 1 - Prob. 1.2PCh. 1 - Prob. 1.3.1PCh. 1 - Prob. 1.4PCh. 1 - Jack Company is a Corporation that was organized...Ch. 1 - Prob. 1.6PCh. 1 - Prob. 1.7.1PCh. 1 - Prob. 1.7.2PCh. 1 - Prob. 1.8PCh. 1 - Prob. 1.10.A1PCh. 1 - Prob. 1.11PCh. 1 - Prob. 1.12PCh. 1 - Prob. 1.13.2PCh. 1 - Prob. 1A.1.1APCh. 1 - Prob. 1A.1.2APCh. 1 - (Note: The use 01 a financial calculator or Excel...Ch. 1 - Frontier does not have publicly traded stock. You...Ch. 1 - Frontier does not have publicly traded stock. You...Ch. 1 - Prob. 1.1B.3CCh. 1 - Prob. 1.1CCCh. 1 - Prob. 1.2.1CCh. 1 - Prob. 1.2.2CCh. 1 - Case 1-2 Disney Acquires Marvel Entertainment On...
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- please solve with working On January 3, 2024, Roberts Company purchased 30% of the 100,000 shares of common stock of Thomas Corporation, paying $1,500,000. There was no goodwill or other cost allocation associated with the investment. Roberts has significant influence over Thomas. During 2024, Thomas reported net income of $300,000 and paid dividends of $100,000. On January 4, 2025, Roberts sold 15,000 shares for $800,000. What was the balance in the investment account before the shares were sold?arrow_forwardOn April 1 2018, Honda Co., purchased 75% of outstanding common stock of GMC Co., @ OMR 250,000 cash. The Co., common stock OMR 40,000 @12 per share. The fair value of common stock 15 per share. Calculate the investment in GMC Company. Select one: a. OMR 3,750,000 b. OMR 250,000 c. OMR 480,000 d. OMR 600,000arrow_forwardSituation 1 Pharoah Tables acquired 15% of the 4,800,000 shares of common stock of Robot Sofas at a total cost of $7.80 per share on April 1, 2025. On August 8, Robot Sofas declared and paid a $267,000 cash dividend. On December 31, Robot Sofas market price was $8.30 per share and the company reported net income of $625,000 for the year. Situation 2 On January 1, 2025, Coronado Company purchased 40% of Santos Corporation 525,000 outstanding shares of common stock at a total cost of $14 per share. On October 25, Santos declared and paid a cash dividend of $0.40 per share. On December 31, Santos reported a net income of $928,000 for the year and the market price of its common stock was $15 per share. Prepare all necessary journal entries in 2025 for both situations. (Credit account titles are automatically Indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries…arrow_forward
- 4. On January 1, 2017, the Z Corporation acquired a 20% interest in D Company by purchasing 4,800 shares of its 24,000 outstanding shares of common stock. The acquisition price was $30 per share. On the date of purchase, D Company's net assets were as follows: Book Value $ 60,000 160,000 $220,000 Fair Value $ 74,000 196.000 $270,000 Total liabilities $ 80,000 $80,000 During 2017, D Company earned income of $70,000 and paid dividends of $18,000. The depreciable assets have a ten-year remaining life and no residual value. Nondepreciable assets Depreciable assets Total assets Difference $14,000 36,000 $50,000 Required: Prepare all of the journal entries on Z Corporation's books to record the acquisition and subsequent events in 2017 related to the investment in D Company.arrow_forwardOn August 1 2018, Sea Food Co., purchased 80% of the common stock of Dolphin Co.,. The common stock issue 70,000 shares of its (Sea Food) OMR 25 par value. Common stock market price of OMR 30 per share. Calculate the investment of Dolphin Co., Select one: a. 1,750,000 b. 2,100,000 c. 1,400,000 d. 1,680,000arrow_forward15P On January 1, 2017, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc., for $2,700,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail’s board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail’s board which gave it the ability to significantly influence Sauk Trail’s operating and investing activities.The January 1, 2017, carrying amounts and corresponding fair values for Sauk Trail’s assets and liabilities follow:Also as of January 1, 2017, Sauk Trail’s computing equipment had a seven-year remaining estimated useful life. The patented technology was estimated to have a three-year remaining useful life. The trademark’s useful life was considered indefinite. Ridge Road attributed to goodwill any unidentified excess cost.During the next two…arrow_forward
- Haskins acquires 100% of Sells on January 1, 2011. Haskins uses the equity method. It is now December 31, 2014. The following are stockholders equity accounts of Sells on various dates. 1/1/11 1/1/14 12/31/14 Common Stock. 120,000 140,000 160,000 Additional Paid in Capital. 2,000,000 2,300,000 2,500,000 Retained Earnings 100,000 130,000 150,000 a. Prepare consolidation worksheet S at December 31, 2014 b.Assume total Stockholders Equity of Haskins at December 31, 2015 is $6,000,000. How much is consolidated Stockholders equity. c. How would this answer differ if Haskins were using the partial equity method and if there was $10,000 of excess amortization. thank youarrow_forwardParagraph Styles Editing On January 1, 2013, ABC Corporation spent $2,600,000 to acquire control over XYZ, Inc. This price was based on paying $750,000 for 30 percent of XYZ's preferred stock, and $1,850,000 for 80 percent of its outstanding common stock. As of the date of the acquisition, XYZ's stockholders' equity accounts were as follows: Common stock (10 par value) $1,000,000 Preferred stock (7% fully participating, $100 par value) $1,000,000 Retained earnings $2,000,000 Required: 1) What is the total acquisition-date fair value of XYZ? 2) Assuming all accounts XYZ are correctly valued within the company's financial statements, what amount of goodwill should be recognized for the Investment in XYZ? ed States) 124arrow_forwardHaskins acquires 100% of Sells on January 1, 2011. Haskins uses the equity method. It is now December 31, 2014. The following are stockholders equity accounts of Sells on various dates. 1/1/11 1/1/14 12/31/14 Common Stock. 120,000 140,000 160,000 Additional Paid in Capital. 2,000,000 2,300,000 2,500,000 Retained Earnings 100,000 130,000 150,000 a. Prepare consolidation worksheet S at December 31, 2014arrow_forward
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