On January 1, 2014, Hi-Speed.com acquired 100 percent of the common stock of Wi-Free Co. for cash

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On January 1, 2014, Hi-Speed.com acquired 100 percent of the common stock of Wi-Free Co. for cash of $730,000. The consideration transferred was allocated among Wi-Free’s net assets as follows:


On January 1, 2014, Hi-Speed.com acquired 100 percent of the


At the acquisition date, the computer software had a 4-year remaining life, and the Internet domain name was estimated to have a 10-year remaining life. By the end of 2014, it became clear that the acquired in-process research and development would yield no economic benefits and Hi-Speed.com recognized an impairment loss. At December 31, 2015, Wi-Free’s accounts payable include a $30,000 amount owed to Hi-Speed.
The December 31, 2015, trial balances for the parent and subsidiary follow:

On January 1, 2014, Hi-Speed.com acquired 100 percent of the


Required
a. Using Excel, prepare calculations showing how Hi-Speed derived the $856,000 amount for its investment in Wi-Free.
b. Using Excel, compute consolidated balances for Hi-Speed and Wi-Free. Either use a worksheet approach or compute the balancesdirectly.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
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Fundamentals of Advanced Accounting

ISBN: 978-0077862237

6th edition

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik

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