11. On January 1, 2016, Parent Inc. acquired 100%% of Sub Corp's outstanding common stock in...
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11. On January 1, 2016, Parent Inc. acquired 100%% of Sub Corp's outstanding common stock in exchanging for S480,000 in cash. Sub's balances on the acquisition date, just prior to acquisition are listed below. Fair Value ! Remaining Life Book Value 20,000 40,000 60,000 80,000 20,000 40,000 70,000 Cash Accounts Receivable Inventory Land Indefinite 100,000 120,000 125,000 10 Years Building (net) Equipment (net) Accounts Payable Common Stock, $I par 100,000 120,000 (20,000) (100,000) (100,000) (200,000) 5 Years (15,000) Paid in Capital Retained Earnings 1231/15 a. Compute the value of the Goodwill account on the date of acquisition, 1/1/16. b. Prepare the entry Parent Co would record (if any) on I/1/2016 for this transaction. Assume that Sub continues to operate as a separate entity. e Prepare the entry Sub Corp would record (if any) on 1/1/2016 for this transaction. Assume that Sub continues to operate as a separate entity. 11. On January 1, 2016, Parent Inc. acquired 100%% of Sub Corp's outstanding common stock in exchanging for S480,000 in cash. Sub's balances on the acquisition date, just prior to acquisition are listed below. Fair Value ! Remaining Life Book Value 20,000 40,000 60,000 80,000 20,000 40,000 70,000 Cash Accounts Receivable Inventory Land Indefinite 100,000 120,000 125,000 10 Years Building (net) Equipment (net) Accounts Payable Common Stock, $I par 100,000 120,000 (20,000) (100,000) (100,000) (200,000) 5 Years (15,000) Paid in Capital Retained Earnings 1231/15 a. Compute the value of the Goodwill account on the date of acquisition, 1/1/16. b. Prepare the entry Parent Co would record (if any) on I/1/2016 for this transaction. Assume that Sub continues to operate as a separate entity. e Prepare the entry Sub Corp would record (if any) on 1/1/2016 for this transaction. Assume that Sub continues to operate as a separate entity.
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Related Book For
Fundamentals of Taxation 2017
ISBN: 9781259752735
10th edition
Authors: Ana Cruz, Michael Deschamps, Frederick Niswander, Debra Prendergast, Dan Schisler, Jinhee Trone
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