On January 4, 2020, Black Corporation acquired 100% of the outstanding shares of White Inc by...

       

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On January 4, 2020, Black Corporation acquired 100% of the outstanding shares of White Inc by a share-for-share exchange of its own shares, valued at $1,800,000. The statements of financial position of both companies just prior to the share exchange are as follows: Statement of Financial Position December 31, 2019 Cash Accounts and other receivables Inventories Building and equipment Accumulated depreciation Deferred charges Accounts and other payabies Bonds payable Deferred income taxes Common shares Retained earnings $ Black 100.000 50,000 110,000 1,600,000 800,000 $ 1,060,000 $ 150,000 60,000 750,000 100,000 $ 1,060,000 White $ 80,000 120,000 150,000 800,000 400,000 120,000 $ 870,000 $80,000 300,000 30,000 250,000 210,000 $ 870,000 White had patents, not shown on the SFP, that had an estimated fair value of $225,000 and an estimated remaining productive life of 5 years White's building and equipment had an estimated fair value of $100,000 in excess of carrying value, and the deferred charges were assumed to have a fair value of zero. White's buildings and equipment are being depreciated on the straight-line basis and have a remaining useful life of 20 years. The deferred charges are being amortized over 4 years During 2020, the year following the acquisition, White borrowed $100,000 from Black; $50,000 is still outstanding at year-end. No interest is being charged on the loan. Through the year, White sold goods to Black totaling $300,000. White's gross margin is 40% of selling price, 45% of these goods were sold by Black to its customers, for $500,000. Dividend declarations amounted to $150,000 by Black and $100,000 by White. There were no other intercompany transactions. The year-end 2020 SFPs and SCIs for Black and White is as follows: Statements of Financial Position December 31, 2020 Cash Accounts and other receivables Inventories Building and equipment Accumulated depreciation Land Investment in Sub (at cost) Other investments Deferred charges Accounts and other payables Bonds payable Deferred income taxes Common shares Retained earnings $ Black 150,000 $ 160,000 200,000 1,600,000 900,000 1,800,000 100,000 $ 3,110,000 180,000 80,000 2,550,000 300.000 $ White 35,000 130,000 205,000 800,000 $ 450,000 100,000 30,000 145,000 $ 995,000 125,000 280,000 50,000 250,000 290.000 Sales Dividend income Statements of Comprehensive Income Year Ended December 31, 2020 Black White $ 2,500,000 $ 1,100,000 100,000 Cost of sales Depreciation expense Amortization expense Income tax expense Other expenses Net income and comprehensive income $3,110,000 Retained earnings Net income Dividends declared Retained earnings $ Statements of Changes in Equity - Retained Earnings Section Year Ended December 31, 2020 2,600 000 1,600,000 100,000 $ 300,000 100,000 450,000 2,250,000 $ 350,000 $ Black 100,000 $ 350,000 150,000 H $ 995,000 White 210,000 180,000 100,000 $ 290,000 1,100,000 650,000 50,000 20,000 25,000 175,000 920,000 180,000 Statements of Changes in Equity - Retained Earnings Section Year Ended December 31, 2020 Retained earnings Net income Dividends declared Retained earnings $ Dividend income Black 100,000 350,000 150,000 300,000 Cort of color $ $ Instructions: Enter all numbers without dollar signs. Round numbers to the nearest whole dollar do not enter any decimals in your number. Enter all numbers as positive numbers. Use commas properly. If the amount is zero, enter 0, do not leave any answers blank. For example, a properly formatted number is 125,250. Numbers incorrectly formatted with not result in any marks. Part B Based on the consolidated financial statements for Black for 2020, determine the following: Sales White 210,000 180,000 100,000 290,000 A/ Cost of sales Combined amortization and depreciation expense Income tax expense Other expenses I Net income and comprehensive income Dividends Retained earnings, December 31, 2020 N 1 A/ A A/ N Cash Accounts and other receivable Inventories Building and equipment Accumulated depreciation' Land Investment in White N A/ N 신 A/ Other investments Deferred charges Patent Goodwill I Accounts and other payables Bonds payable Deferred income taxes A/ A/ A A A/ A Common shares A Total Assets (or Total Liabilities + Shareholders' Equity) A/ On January 4, 2020, Black Corporation acquired 100% of the outstanding shares of White Inc by a share-for-share exchange of its own shares, valued at $1,800,000. The statements of financial position of both companies just prior to the share exchange are as follows: Statement of Financial Position December 31, 2019 Cash Accounts and other receivables Inventories Building and equipment Accumulated depreciation Deferred charges Accounts and other payabies Bonds payable Deferred income taxes Common shares Retained earnings $ Black 100.000 50,000 110,000 1,600,000 800,000 $ 1,060,000 $ 150,000 60,000 750,000 100,000 $ 1,060,000 White $ 80,000 120,000 150,000 800,000 400,000 120,000 $ 870,000 $80,000 300,000 30,000 250,000 210,000 $ 870,000 White had patents, not shown on the SFP, that had an estimated fair value of $225,000 and an estimated remaining productive life of 5 years White's building and equipment had an estimated fair value of $100,000 in excess of carrying value, and the deferred charges were assumed to have a fair value of zero. White's buildings and equipment are being depreciated on the straight-line basis and have a remaining useful life of 20 years. The deferred charges are being amortized over 4 years During 2020, the year following the acquisition, White borrowed $100,000 from Black; $50,000 is still outstanding at year-end. No interest is being charged on the loan. Through the year, White sold goods to Black totaling $300,000. White's gross margin is 40% of selling price, 45% of these goods were sold by Black to its customers, for $500,000. Dividend declarations amounted to $150,000 by Black and $100,000 by White. There were no other intercompany transactions. The year-end 2020 SFPs and SCIs for Black and White is as follows: Statements of Financial Position December 31, 2020 Cash Accounts and other receivables Inventories Building and equipment Accumulated depreciation Land Investment in Sub (at cost) Other investments Deferred charges Accounts and other payables Bonds payable Deferred income taxes Common shares Retained earnings $ Black 150,000 $ 160,000 200,000 1,600,000 900,000 1,800,000 100,000 $ 3,110,000 180,000 80,000 2,550,000 300.000 $ White 35,000 130,000 205,000 800,000 $ 450,000 100,000 30,000 145,000 $ 995,000 125,000 280,000 50,000 250,000 290.000 Sales Dividend income Statements of Comprehensive Income Year Ended December 31, 2020 Black White $ 2,500,000 $ 1,100,000 100,000 Cost of sales Depreciation expense Amortization expense Income tax expense Other expenses Net income and comprehensive income $3,110,000 Retained earnings Net income Dividends declared Retained earnings $ Statements of Changes in Equity - Retained Earnings Section Year Ended December 31, 2020 2,600 000 1,600,000 100,000 $ 300,000 100,000 450,000 2,250,000 $ 350,000 $ Black 100,000 $ 350,000 150,000 H $ 995,000 White 210,000 180,000 100,000 $ 290,000 1,100,000 650,000 50,000 20,000 25,000 175,000 920,000 180,000 Statements of Changes in Equity - Retained Earnings Section Year Ended December 31, 2020 Retained earnings Net income Dividends declared Retained earnings $ Dividend income Black 100,000 350,000 150,000 300,000 Cort of color $ $ Instructions: Enter all numbers without dollar signs. Round numbers to the nearest whole dollar do not enter any decimals in your number. Enter all numbers as positive numbers. Use commas properly. If the amount is zero, enter 0, do not leave any answers blank. For example, a properly formatted number is 125,250. Numbers incorrectly formatted with not result in any marks. Part B Based on the consolidated financial statements for Black for 2020, determine the following: Sales White 210,000 180,000 100,000 290,000 A/ Cost of sales Combined amortization and depreciation expense Income tax expense Other expenses I Net income and comprehensive income Dividends Retained earnings, December 31, 2020 N 1 A/ A A/ N Cash Accounts and other receivable Inventories Building and equipment Accumulated depreciation' Land Investment in White N A/ N 신 A/ Other investments Deferred charges Patent Goodwill I Accounts and other payables Bonds payable Deferred income taxes A/ A/ A A A/ A Common shares A Total Assets (or Total Liabilities + Shareholders' Equity) A/

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Based on the information provided the following are the values for Black Corporation for the year 2020 Sales 500000 Dividend income 180000 Cost of sales 300000 Combined amortization and depreciation e... View the full answer