Parkovash, Incorporated, obtained 100 percent of Salerno Company's common stock on January 1, 2023, by Issuing...
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Parkovash, Incorporated, obtained 100 percent of Salerno Company's common stock on January 1, 2023, by Issuing 8,500 shares of $10 par value common stock. Parkovash's shares had a $15 per share fair value. On that date, Salerno reported a net book value of $88,750. However, its equipment (with a 5-year remaining life) was undervalued by $7,250 In the company's accounting records. Also, Salerno had developed computer software with an assessed value of $31,500, although no value had been recorded on Salerno's books. The computer software had an estimated remaining useful life of 10 years. The following balances come from the Individual accounting records of these two companies as of December 31, 2023: Items Revenues Expenses Investment income Dividends declared Parkovash $ (692,000) 449,000 Not given 120,000 Salerno $ (275,000) 130,000 0 70,000 The following balances come from the Individual accounting records of these two companies as of December 31, 2024: Revenues Expenses Items Investment income Dividends declared Equipment Parkovash $ (886,000) 471,200 Not given 140,000 532,000 Salerno $(348,750) 163,100 0 50,000 373,000 Required: e. What balance does Parkovash's Investment In Salerno account show on December 31, 2024, when the equity method is applied? b. What is the consolidated net income for the year ending December 31, 2024? c-1. What is the consolidated equipment balance as of December 31, 2024? c-2. Would this answer be affected by the Investment method applied by the parent? d. Prepare entry "C for the beginning of the Retained Earnings account on a December 31, 2024 by using Initial value, partial equity and equity method. Answer is not complete. Complete this question by entering your answers in the tabs below. Req A to C2 Req D Prepare entry *C for the beginning of the Retained Earnings account on a December 31, 2024 by using initial value, partial equity and equity method. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No 1 Date December 31, 202 Investment in Salemo Retained earnings Accounts Debit Credit Parkovash, Incorporated, obtained 100 percent of Salerno Company's common stock on January 1, 2023, by Issuing 8,500 shares of $10 par value common stock. Parkovash's shares had a $15 per share fair value. On that date, Salerno reported a net book value of $88,750. However, its equipment (with a 5-year remaining life) was undervalued by $7,250 In the company's accounting records. Also, Salerno had developed computer software with an assessed value of $31,500, although no value had been recorded on Salerno's books. The computer software had an estimated remaining useful life of 10 years. The following balances come from the Individual accounting records of these two companies as of December 31, 2023: Items Revenues Expenses Investment income Dividends declared Parkovash $ (692,000) 449,000 Not given 120,000 Salerno $ (275,000) 130,000 0 70,000 The following balances come from the Individual accounting records of these two companies as of December 31, 2024: Revenues Expenses Items Investment income Dividends declared Equipment Parkovash $ (886,000) 471,200 Not given 140,000 532,000 Salerno $(348,750) 163,100 0 50,000 373,000 Required: e. What balance does Parkovash's Investment In Salerno account show on December 31, 2024, when the equity method is applied? b. What is the consolidated net income for the year ending December 31, 2024? c-1. What is the consolidated equipment balance as of December 31, 2024? c-2. Would this answer be affected by the Investment method applied by the parent? d. Prepare entry "C for the beginning of the Retained Earnings account on a December 31, 2024 by using Initial value, partial equity and equity method. Answer is not complete. Complete this question by entering your answers in the tabs below. Req A to C2 Req D Prepare entry *C for the beginning of the Retained Earnings account on a December 31, 2024 by using initial value, partial equity and equity method. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No 1 Date December 31, 202 Investment in Salemo Retained earnings Accounts Debit Credit
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Advanced Accounting
ISBN: 9781264798483
15th Edition
Authors: Joe Ben Hoyle, Thomas Schaefer And Timothy Doupnik
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