On January 1, 2020, Random Company acquired 30 percent of the voting shares of Adam, Inc.,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 1, 2020, Random Company acquired 30 percent of the voting shares of Adam, Inc., for $4,400,000 in cash. Equity method is applied to account for investment. The January 1, 2020, carrying amounts and corresponding fair values for Adam's assets and liabilities follow. Any consideration transferred over the fair value of identifiable net assets are allocated to goodwill. Carrying Amount $195,000 5,765,000 Cash and receivables Computing equipment Patented technology Trademark Liabilities. Goodwill has indefinite useful life. 2020 $ 2021 185,000 235,000 (270,000) Req A During the following two years, Adam reported net income and dividends as follows: Net Income Dividends Declared 1,970,000 $ 2,155,000 Req B and C Fair Value $195,000 7,060,000 4,170,000 2,170,000 (270,000) How much is attributable to goodwill? Goodwill $ 402,500 Required: a. How much of Random's $4,400,000 payment for Adam is attributable to goodwill? b. What amount should Random report for its Equity in Investee's Income on its income statements for 2020 and 2021? c. What amount should Random report for its Investment in Investee on its balance sheets at the end of 2020 and 2021? Complete this question by entering your answers in the tabs below. 235,000 245,000 Useful life 7 years 3 years infinite < Req A Req B and C > On January 1, 2020, Random Company acquired 30 percent of the voting shares of Adam, Inc., for $4,400,000 in cash. Equity method is applied to account for investment. The January 1, 2020, carrying amounts and corresponding fair values for Adam's assets and liabilities follow. Any consideration transferred over the fair value of identifiable net assets are allocated to goodwill. Carrying Amount $195,000 5,765,000 Cash and receivables Computing equipment Patented technology Trademark Liabilities. Goodwill has indefinite useful life. 2020 $ 2021 185,000 235,000 (270,000) Req A During the following two years, Adam reported net income and dividends as follows: Net Income Dividends Declared 1,970,000 $ 2,155,000 Req B and C Fair Value $195,000 7,060,000 4,170,000 2,170,000 (270,000) How much is attributable to goodwill? Goodwill $ 402,500 Required: a. How much of Random's $4,400,000 payment for Adam is attributable to goodwill? b. What amount should Random report for its Equity in Investee's Income on its income statements for 2020 and 2021? c. What amount should Random report for its Investment in Investee on its balance sheets at the end of 2020 and 2021? Complete this question by entering your answers in the tabs below. 235,000 245,000 Useful life 7 years 3 years infinite < Req A Req B and C >
Expert Answer:
Answer rating: 100% (QA)
The detailed answer for the above question is provided below a Go... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
Posted Date:
Students also viewed these accounting questions
-
On January 1, 2020, Stream Company acquired 30 percent of the outstanding voting shares of Q-Video, Inc., for $684,000. Q-Video manufactures specialty cables for computer monitors. On that date,...
-
On January 1, 2010, Stream Company acquired 30 percent of the outstanding voting shares of Q-Video, Inc., for $770,000. Q-Video manufactures specialty cables for computer monitors. On that date,...
-
On January 1, 2012, Stream Company acquired 30 percent of the outstanding voting shares of Q-Video, Inc., for $770,000. Q-Video manufactures specialty cables for computer monitors. On that date,...
-
i. Find a. b. ii. Use the trapezium rule with 2 intervals to estimate the value of giving your answer correct to 2 decimal places. +6 e2x + 6 e2 dx,
-
(a) Find the focal length of a thick double-convex lens with an index of refraction of 1.5, a thickness of 4 cm, and radii of +20 cm and 20 cm. (b) Find the focal length of this lens in water.
-
On January 1, 2014, Olson Corporation issued $6 million of 10-year, 7%, convertible debentures at 104. Investment bankers believe that the debenture would have sold at 102 without the conversion...
-
Consider an LRC circuit with \(L=1.00 \mathrm{H}, R=1.00 \times 10^{2} \Omega, C=\) \(1.00 \times 10^{-4} \mathrm{~F}\), and \(V=1.00 \times 10^{3} \mathrm{~V}\). Suppose that no charge is present...
-
Ellen Bright, CEO of TWA Parts (TWAP), looked at the two balanced scorecards before her. One, from the luxury division, showed strong financial results; while the other, from the economy division,...
-
A company is considering a 5-year project that opens a new product line and requires an initial outlay of $76,000. The assumed selling price is $99 per unit, and the variable cost is $63 per unit....
-
GUI Assignment You will be creating a seating arrangement application using JavaFX. The project will comprise of two sections: the interface and the Java code. The application will feature a 3x3...
-
Check whether or not each of the following functions are holomorphic in C. 1. f(z)=x^2y^2 2. f(z)=z/z-1
-
Describe how a heat pump works. What does the Carnot process describe? Describe the components of the heat pump and the cycle, happening in the heat pump. Draw the individual state changes in the...
-
What is internal control, and what are the objectives of a well-designed internal control structure in an organization?
-
Oxycare Manufacturing Inc. focuses on providing medical supplies, particularly for patients with complications of lungs, heart, severe respiratory diseases and those who were infected with COVID-19....
-
On February 1, 2024, Wolf Incorporated issued 10% bonds dated February 1, 2024, with a face amount of $290,000. The bonds sold for $347,399 and mature in 20 years. The effective interest rate for...
-
Apple and Google are both facing monopoly allegations in regard to their app stores. They limit competition through being selective with what developers/applications will be available to their...
-
Part 3: B) Math Game Plan Skill 15:Application Project Part 3: After an innovation from the standard class challenge and material: A new addition or product or service for a craft beer and wine...
-
Write the binomial probability in words. Then, use a continuity correction to convert the binomial probability to a normal distribution probability. P(x 110)
-
The following separate income statements are for Mason and its 80 percentowned subsidiary, Dixon: Additional Information ¢ Amortization expense resulting from Dixons excess acquisition-date fair...
-
What is the purpose of Financial Reporting Releases and Staff Accounting Bulletins?
-
Following are several figures reported for Preston and Sanchez as of December 31, 2011: .:. Preston acquired 70 percent of Sanchez in January 2010. In allocating the newly acquired subsidiarys fair...
-
Consider the following three separate scenarios for a one-year, \(\$ 100,000\) note payable issued on September \(1,2020\). Use the straight-line method to amortize any discount on note payable....
-
Masy's Department Store supported its operations through short-term note financing in 2020 described as follows: May 10 The Company entered into a new credit agreement with certain financial...
-
The following table includes five separate short-term note payable scenarios. Required For each separate scenario, complete the last column in the table by calculating interest expense accrued at the...
Study smarter with the SolutionInn App