Questions on Organization Accounting

 Questions upon Company Accounting Essay

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On January 1, Puckett Company paid $2. 64 million to get 88, 500 shares of Harrison's voting common stock, which symbolizes a 40 percent purchase. No allowance to goodwill or additional specific bank account was made. Significant influence more than Harrison can be achieved by this kind of acquisition and thus Puckett does apply the equity method. Harrison distributed a dividend of $2 every share in the past year and reported net income of $613, 500. What is the total amount in the Expense in Harrison account present in Puckett's monetary records since December 23?

$2, 709, 200.

Obtain price

$

2, 640, 000

Fairness income ($613, 000 Г— 40%)

245, 200

Returns (88, 000 shares Г— $2)

(176, 000

)

Investment in Harrison Corporation as of Dec 31

dollar

2, 709, 200

In January 2012, Wilkinson, Inc., acquired 20% of the spectacular common stock of Bremm, Inc., intended for $734, 500. This expense gave Wilkinson the ability to exercise significant affect over Bremm. Bremm's property on that date had been recorded by $4, 079, 000 with liabilities of $929, 000. Any excess of cost more than book benefit of the purchase was caused by a patent having a outstanding useful existence of ten years. В В В В В In 2012, Bremm reported net income of $257, 000. In 2013, Bremm reported net income of $315, two hundred fifty. Dividends of $72, 000 were paid in each of these two years. What is the value method stability of Wilkinson's Investment in Bremm, Inc., at January 31, 2013?

$798, eight hundred fifty.

Acquisition price

$

734, 000

Salary accruals: 2012—$257, 000 × 20%

fifty-one, 400

2013—$315, 250 Г— 20% В

63, 050

Amortization (see below): 2012

(10, 400

)

Demise: 2013

(10, 400

)

Dividends: 2012—$72, 000 × 20%

(14, 400

)

2013—$72, 500 × 20%

(14, 4 hundred

)

Investment in Bremm, December 31, 2013

money

798, 850

Acquisition cost

$

734, 000

Bremm's net possessions acquired ($3, 150, 500 Г— 20%)

(630, 500

)

Extra cost to patentВ В

dollar

104, 000

Annual retirement (10 12 months life)

$

10, 500

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Ace purchases 40 percent of Baskett Company upon January you for $593, 600. Although Ace did not use it, this kind of acquisition provided Ace the cabability to apply significant influence to Baskett's working and financing policies. Baskett reports В assets on that date of $1, 589, 000 with liabilities of $592, 000. One building with a seven-year life is undervalued on Baskett's books by simply $234, 500. Also, Baskett's book benefit for its hallmark (10-year life) is undervalued by $252, 500. During the year, Baskett reports net income of $172, 500 while paying out dividends of $110, 1000. What is the Investment in Baskett Firm balance (equity method) in Ace's monetary records by December 23?

в†’

$594, 900.

Cost of Baskett stock

$

593, 600

Book benefit of Baskett ($997, 1000 Г— 40%)

(398, 800

)

Price in excess of book value

bucks

194, 800

Payment identified with undervalued

Life

Twelve-monthly

Amortization

Building ($234, 500 Г— 40%)

93, 800

7 yrs.

$

13, 400 В В

Trademark ($252, 500 Г— 40%)

info, 000

10 yrs.

15, 100 В В

Total

$

0

money

23, five-hundred В В

Cost of investment

bucks

593, six-hundred

Basic income accrual ($172, 000 Г— 40%)

sixty-eight, 800

Amount (above)

(23, 500

)

Dividend collectedВ ($110, 1000 Г— 40%)

(44, 000

)

Expense in Baskett as of 12 , 31

dollar

594, nine hundred

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Goldman Business reports net income of $182, 000 annually and pays an...

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