On January 1, 2023, Playtel Inc. acquired all of the stock of San Jose Cable for...
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On January 1, 2023, Playtel Inc. acquired all of the stock of San Jose Cable for $250 million in cash. At the date of acquisition, San Jose's shareholders' equity accounts were as follows (in thousands): Common stock. $1 par Additional paid-in capital Retained deficit Treasury stock Total $5,000 30,000 (1.000) (500) $33,500 Both companies have a December 31 year-end. At the date of acquisition, San Jose's reported net assets had book values approximating fair value. However, it had previously unreported indefinite-life identifiable intangibles valued at $65 million, meeting ASC Topic 805 requirements for capitalization, Impairment losses in 2023 for identifiable intangibles were $500,000. Goodwill from this acquisition was not impaired in 2023. San Jose reported net income of $3 million in 2023, and paid no dividends. Playtel uses the complete equity method to report its investment in San Jose on its own books. Required a. Calculate the original amount of goodwill for this acquisiton. S (in thousands) b. Calculate equity in net income of San Jose, reported on Playtel's books in 2023. (in thousands) c. Prepare eliminating entries (C), (E), (R) and (O), required to consolidate Playtel's trial balance accounts with those of San Jose on December 31, 2023. Enter numerical answers in thousands. Description Ref. (C) (E) Common stock, $1 par Treasury stock Investment in San Jose (R) Identifiable intangibles (0) 수 ( 47 4k 수 42 44 47 Debit Credit On January 1, 2023, Playtel Inc. acquired all of the stock of San Jose Cable for $250 million in cash. At the date of acquisition, San Jose's shareholders' equity accounts were as follows (in thousands): Common stock. $1 par Additional paid-in capital Retained deficit Treasury stock Total $5,000 30,000 (1.000) (500) $33,500 Both companies have a December 31 year-end. At the date of acquisition, San Jose's reported net assets had book values approximating fair value. However, it had previously unreported indefinite-life identifiable intangibles valued at $65 million, meeting ASC Topic 805 requirements for capitalization, Impairment losses in 2023 for identifiable intangibles were $500,000. Goodwill from this acquisition was not impaired in 2023. San Jose reported net income of $3 million in 2023, and paid no dividends. Playtel uses the complete equity method to report its investment in San Jose on its own books. Required a. Calculate the original amount of goodwill for this acquisiton. S (in thousands) b. Calculate equity in net income of San Jose, reported on Playtel's books in 2023. (in thousands) c. Prepare eliminating entries (C), (E), (R) and (O), required to consolidate Playtel's trial balance accounts with those of San Jose on December 31, 2023. Enter numerical answers in thousands. Description Ref. (C) (E) Common stock, $1 par Treasury stock Investment in San Jose (R) Identifiable intangibles (0) 수 ( 47 4k 수 42 44 47 Debit Credit
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Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
Posted Date:
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