Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Demers earns income and pays dividends as follows: 2019 2020 2021 Net income $ 100,000 $ 120,000 $ 130,000 Dividends 40,000 50,000 60,000 5) What is the consolidated balance of the Investment in Demers account at December 31, 2021.
Q: On January 1, 2021, the general ledger of Dynamite Fireworks includes the following account…
A: A classified balance sheet is a financial statement that presents a company's financial position by…
Q: Pertinent information for two alternatives A and B is shown below. If i=10% / year and the effective…
A: Since the MACRS recovery is 5 years the depreciation rates will be seen in the MACRS table which are…
Q: The Ace Battery Company has forecast its sales in units as follows: January 1,700 May February 1,550…
A: Production budget is the budget which is prepared to estimate the number of units to be produced for…
Q: How much is the Ordinary Deduction? Mr. Pim Musay, Filipino and married died in 2021, leaving his…
A: It is a tax imposed on the transfer of the estate of a deceased person. It is a tax on the total…
Q: Sunland Inc. is considering the following alternatives: Revenues Variable costs Fixed costs…
A: Variable costs are those costs which changes along with change in activity level. Fixed costs do not…
Q: Revenue recognition at a point in time On July 1, 2024, Apache Company, a real estate developer,…
A: Revenue recognition is very important because when the revenue is recognized is an important part of…
Q: The following information relates to Company SLP's 20x6 financial statements: Revenue R600 000;…
A: EBITDA means earnjngs before interest, tax, depreciation and amortisation. Operating profit is…
Q: Long-term debt Total liabilities Preferred stock Common stock (10,000 shares) Additional paid-in…
A: Cash flow statement shows the cash inflow and cash outflow of the company. It involves the…
Q: Exercise 11-1 (Algo) Compute the Return on Investment (ROI) [LO11-1] Alyeska Services Company, a…
A: Ratio analysis helps the management for analyzing the financial statements of the company.…
Q: The following items were taken from the adjusted trial balance of the Bremeur Corp. on 31 December…
A: An income statement is prepared by the business entities so as to determine how much amount of net…
Q: Anna Garden recently opened her own basketweaving studio. She sells finished baskets in addition to…
A: Lets understand the basics.There are scenarios in the business where the management has to make…
Q: The following information is provided for the sales of merchandise item PQ for the first week of…
A: Inventory valuation method you to calculate the total amount of purchases, total amount of issues of…
Q: Struggling to find the payback period and NPV. I believed pay period to be annual net…
A: Net present value :— It is the difference between present value of net cash flow and initial…
Q: 25. Vadel Inc., a Canadian public company, has 1,000,000 shares outstanding with a total PUC of…
A: Non-eligible stock dividends are the type of dividends that didn't qualify for lower tax rates as…
Q: Some of the information found on a detail inventory card for Marin Inc. for the first month of…
A: INVENTORY VALUATION Inventory Valuation Methods are methods of valuation of inventory. Inventory…
Q: Many companies request that their auditors provide them with other services, such as tax or…
A: Auditing is a systematic and independent examination of financial information, records, statements,…
Q: Riverbed Warehouse distributes suitcases to retail stores and extends credit terms of n/30 to all of…
A: The T account is a T-shaped account that has debit and credit entries. A t account is a summary…
Q: a. Is the bank reconciliation a journal, a ledger, an account, or a financial statement? If it is…
A: The bank reconciliation is a statement that is prepared to match the accounting book cash balance…
Q: The following salaried employees of Mountain Stone Brewery in Fort Collins, Colorado, are paid…
A: The percentage method has no wages or allowance limit, therefore firm's can use it. If the…
Q: Prepare schedules for (1) expected collections from customers and (2) expected payments for direct…
A: Cash Budget is that budget which helps in every organisation to maintain Cash balance for day to…
Q: Pinder Ltd is considering a merger with Value Co, where Pinder Ltd will issue 2 of its own shares…
A: The Price-to-Earnings ratio, also known as P/E ratio, is a financial metric used to assess the…
Q: Pure Goodness Company produces and sells canned vegetable juice. The ingredients are first combined…
A: PRODUCTION BUDGET Production Budget is a Forecast of the Production for the Budgeted Peirod of an…
Q: Units, beginning work in process Units started Units completed Units, ending work in process Cost of…
A: EQUIVALENT UNITS OF PRODUCTION Equivalent Production is represents the production of a process in…
Q: Sam, a single individual, has $75,000 salary and $25,000 qualified dividends. Sam incurred $2,000…
A: Answer:- Income tax meaning:- Income on which tax is levied is called as income tax. There are many…
Q: What are the causes for any differences in the cost based on obtained results?
A: The traditional approach to cost allocation entails allocating indirect costs to goods using a…
Q: 5. The following is a summary of the balance sheet accounts for Betty's Bacon Inc. Organize the…
A: The balance sheet is a summary of permanent accounts prepared at the end of the accounting period.…
Q: The following information was taken from the records of Marigold Inc. for the year 2020: Income tax…
A: Income statement is prepared to determine the profit or loss by deducting expenses from revenues. It…
Q: market value of $1.5 billion in equal amounts for a period of 15 years, and the corporate income tax…
A: The part of a person's or entity's income that is subject to taxation by the government is known as…
Q: Requirement Determine George's AGI for 2019. (Assume that the 2018 STCL of $5,500 is before George…
A: The term capital gain refers to the increase in the value of a capital asset when it is sold. Put…
Q: California imposes a Non-Economic Substance Penalty (NEST) on a taxpayer with an understatement of…
A: If a transaction is found to lack economic substance, it might be disallowed for tax purposes, and…
Q: Crane, Inc. leased equipment from Tower Company under a 4-year lease requiring equal annual payments…
A: In the question, Crane Inc. leased the equipment for 4 years and made the leased payment of Rs.…
Q: 6. Jamison Corp.'s balance sheet accounts as of December 31, 2021 and 2020 and information relating…
A: A cash flow statement consists of cash inflow and cash outflow transaction details of a particular…
Q: CLV3: A new streaming platform, MV expects to make a margin of $10 every month from each of its…
A: It is a measure to determine the margin or profit that can be generated from a customer throughout…
Q: Ch 22-Budgeting Problem A company has the following data to prepare the budgets for 2022: • Budgeted…
A: Budgets are the estimates or forecasts made for future period of time. Production budget shows…
Q: Tennies Clinic uses client-visits as its measure of activity. During November, the clinic budgeted…
A: Variance arises when the actual costs differ from the standard costs. The results are favorable…
Q: Assume the following data for Burnette Merchandising for 2023: View the data. On December 31, a…
A: FIFO Method :— It is one of the method of inventory valuation in which it is assumed that old…
Q: Planning Budget the Month Ended May 31 for Budgeted diving-hours (9) Revenue ($390,000) Expenses!…
A: The master budget is the budget which is fixed and can not be changed. The flexible budget can be…
Q: Calculating Depletion, Depreciation, and Ending Inventory Aerial Company acquired land containing…
A: -Natural resources such as mines are accounted as wasting assets.-Depletion of wasting assets is…
Q: Marlblestone encountered the following situations during the preparation of its annual financial…
A:
Q: You believe you have discovered a new medical device. You anticipate it will take additional time to…
A: Net present value is difference between present value of cash inflows and present value of cash…
Q: 1. 2. 3. 4. 5. 6. Insurance expires at the rate of $450 per month. A count of supplies shows $1,120…
A: Lets understand the basics.Income statement gets prepared by closing all the income and expense…
Q: E17.12 (LO 2) AP The following information is provided for Jolly Ltd. JOLLY LTD. Balance Sheet…
A: The cash flow statement is prepared to record the cash flow from various activities during the…
Q: Which of the following is NOT a type of ratio analysis used by managers to interpret the numbers in…
A: Ratio analysis is one of useful tool used in management accounting. Under this, different type of…
Q: Question 2 Version B Bemerd Co uses a predetermined overhead rate based on computer hours used to…
A: Overhead means all type of indirect costs being incurred in business. These costs can not be…
Q: actor tables, (2) a financial calculator, or (3) Excel functions, calculate the amount Oriole Corp…
A: The practice of identifying and disclosing lease transactions in a company's financial statements is…
Q: Dunn, Inc. uses the accrual method of accounting for financial reporting purposes and appropriately…
A: The deferred tax laibility can be defined as the taxes that are owed but these taxes are not due…
Q: 3. Given the following transactions for Clip Corporation, prepare a trial balance as of March 31,…
A: The journal entries are prepared to record the transactions on regular basis. The trial balance is…
Q: In an article entitled ‘Berry nasty’ that appeared in the Courier Mail on 15 February 2015 (by Greg…
A: For businesses, "contingent liabilities" are like those tools. They're possible responsibilities…
Q: ent, calculate the flexible budget, the spending and the efficiency variances for variable…
A: The variance is the difference between the actual costs and standard production costs. The spending…
Q: Which of the following is NOT a function of the XRB? Select one alternative: O Developing and…
A: The XRB is the External Reporting Board of New Zealand. It is responsible for developing and issuing…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received $12,000,000 in net assets. In 2016, the market value of the goodwill obtained from Branta Corp. was valued at $4,000,000, but in 2017 it dropped to $2,000,000. Prepare the journal entry for the creation of goodwill and the entry to record any impairments to it in subsequent years.On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was estimated at 2,000. The equipment will be depreciated over 10 years using the double-declining balance method. Counting the year of acquisition as one-half year, Mundo should record 2019 depredation expense of: a. 7,680 b. 9,000 c. 9,600 d. 10,000Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of zero. Bliss uses the straight -line method of depreciation. At the beginning of the sixth year, the assets book value is 200,000 and Bliss changes the estimate of the assets life to 25 years, so that 20 years now remain in the assets life. Explain how this change will be accounted for in Blisss financial statements, and compute the current and future annual depreciation expense.
- Gray Companys financial statements showed income before income taxes of 4,030,000 for the year ended December 31, 2020, and 3,330,000 for the year ended December 31, 2019. Additional information is as follows: Capital expenditures were 2,800,000 in 2020 and 4,000,000 in 2019. Included in the 2020 capital expenditures is equipment purchased for 1,000,000 on January 1, 2020, with no salvage value. Gray used straight-line depreciation based on a 10-year estimated life in its financial statements. As a result of additional information now available, it is estimated that this equipment should have only an 8-year life. Gray made an error in its financial statements that should be regarded as material. A payment of 180,000 was made in January 2020 and charged to expense in 2020 for insurance premiums applicable to policies commencing and expiring in 2019. No liability had been recorded for this item at December 31, 2019. The allowance for doubtful accounts reflected in Grays financial statements was 7,000 at December 31, 2020, and 97,000 at December 31, 2019. During 2020, 90,000 of uncollectible receivables were written off against the allowance for doubtful accounts. In 2019, the provision for doubtful accounts was based on a percentage of net sales. The 2020 provision has not yet been recorded. Net sales were 58,500,000 for the year ended December 31, 2020, and 49,230,000 for the year ended December 31, 2019. Based on the latest available facts, the 2020 provision for doubtful accounts is estimated to be 0.2% of net sales. A review of the estimated warranty liability at December 31, 2020, which is included in other liabilities in Grays financial statements, has disclosed that this estimated liability should be increased 170,000. Gray has two large blast furnaces that it uses in its manufacturing process. These furnaces must be periodically relined. Furnace A was relined in January 2014 at a cost of 230,000 and in January 2019 at a cost of 280,000. Furnace B was relined for the first time in January 2020 at a cost of 300,000. In Grays financial statements, these costs were expensed as incurred. Since a relining will last for 5 years, Grays management feels it would be preferable to capitalize and depreciate the cost of the relining over the productive life of the relining. Gray has decided to nuke a change in accounting principle from expensing relining costs as incurred to capitalizing them and depreciating them over their productive life on a straight-line basis with a full years depreciation in the year of relining. This change meets the requirements for a change in accounting principle under GAAP. Required: 1. For the years ended December 31, 2020 and 2019, prepare a worksheet reconciling income before income taxes as given previously with income before income taxes as adjusted for the preceding additional information. Show supporting computations in good form. Ignore income taxes and deferred tax considerations in your answer. The worksheet should have the following format: 2. As of January 1, 2020, compute the retrospective adjustment of retained earnings for the change in accounting principle from expensing to capitalizing relining costs. Ignore income taxes and deferred tax considerations in your answer.Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Demers earns income and pays dividends as follows: 2019 Net income $100,000 Dividends 40,000 2020 2021 $120,000 $130,000 50,000 60,000 Assume the equity method is applied. Compute Pell's equity income from Demers for the year ended December 31, 2020.Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Demers earns income and pays dividends as follows: 2019 Net income $ 100,000 Dividends 40,000 2020 2021 $ 120,000 $ 130,000 50,000 60,000 Assume the initial value method is applied. Compute the noncontrolling interest in the net income of Demers at December 31, 2020. Multiple Choice $12,600. $18,400. ⚫ $22,600. $14,000. $24,000.
- Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Demers earns income and pays dividends as follows: 2019 2020 2021 Net income $ Dividends 100,000 40,000 Multiple Choice $780,000. $660,000. $785,000. $676,000. SO. $ 120,000 50,000 $ 130,000 60,000 Assume the partial equity method is applied. What is the consolidated balance of the Investment in Demers account at December 31, 2021.Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Demers earns income and pays dividends as follows: 2019 2020 2021 Net income $ 100,000 $ 120,000 $ 130,000 Dividends 40,000 50,000 60,000 Assume the equity method is applied. What is the consolidated balance of the Equity in Demers Earnings account at December 31, 2021. Multiple Choice $0. $98,400. $104,000. $97,000. $56,000.Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Demers earns income and pays dividends as follows: 2019 2020 2021 $ Net income $ Dividends a. $112,000. b. Assume the equity method is applied. Compute the noncontrolling interest in Demers at December 31, 2019. $135,600. C. $118,600. d. $137,000. e. 100,000 40,000 $100,000. 120,000 50,000 $ 130,000 60,000
- Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Demers earns income and pays dividends as follows: 2019 2020 2021 Net income $ 100,000 $ 120,000 $ 130,000 Dividends 40,000 50,000 60,000 Assume the equity method is applied. 1) Compute Pell's Investment in Demers account balance at December 31, 2019, 2020 and 2021. 2) Compute Pell's equity income from Demers for the year ended December 31, 2019, 2020 and 2021. 3) Compute the noncontrolling interest in the net income of Demers at December 31, 2019, 2020 and 2021. 4) Compute the noncontrolling interest in Demers at December 31, 2019, 2020 and…Ryan Company acquired 70% of Garcia Company for $475,000 on January 1, 2021. Garcia reported common stock of $250,000 and retained earnings of $180,000 on that date. Equipment was undervalued by $12,000 and buildings were undervalued by $50,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. According to an annual review, goodwill has not been impaired. Garcia earns income and pays dividends as follows: 2021 Net income $ Dividends 120,000 49,000 2022 S 147,000 52,000 Assume the initial value method is applied. Compute the noncontrolling interest in Garcia at December 31, 2022.Lee Company acquired 75% of Winters Company for $600,000 on January 1, 2020. Winters reported common stock of $350,000 and retained earnings of $220,000 on that date. Equipment was overvalued by $10,000 and buildings were undervalued by $60,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. According to an annual review, goodwill has not been impaired. Winters earns income and pays dividends as follows: 2021 2022 $220,000 $245,000 90,000 110,000 Net income Dividends 2020 $150,000 65,000 Assume the partial equity method is applied. Compute the noncontrolling interest in Winters at December 31, 2021.