Project: Consolidated Balance Sheet of and Acquisition-date consolidation worksheet for a parent and a variable interest...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Project: Consolidated Balance Sheet of and Acquisition-date consolidation worksheet for a parent and a variable interest entity' On January 1, 2021, Jake Corp. exchanged $850,000 for 40% of the out standing voting stock of Johnson Corp. Especially attractive to Jake Corp was a research project underway Johnson Corp that would enhance both quality and quantity of Chip production. Although not recorded in Johnson Corp's financial records, the fair value of the research project was considered to be $1,810,000. In contractual Agreements with the sole owner of the remaining 60% of the Johnson Corp., Jake Corp. was granted: 1. Various decision-making rights over Johnson Corp.'s operating decisions 2. Special service purchase provisions at below-market rates. As a result of these contractual; agreements, Jake Corp established itself as the primary beneficiary of Johnson Corp. Immediately after the purchase, Jake Corp. and Johnson Corp presented the following balance sheets: Jake Corp. 46,000 850,000 966,000 1,051,000 901,000 Johnson Corp. $4 26,000 Cash Investment in Johnson Corp Capitalized Chip production software Computer equipment Communication Equipment 141,000 41,000 321,000 176,000 705,000 Patent Total Assets $ 3,814,000 Long-term Debt Common Stock-Jake $ (926,000) (2,510,000) (601,000) Common Stock-Johnson Retained Earnings Total liabilities and equity (378,000) $ (3,814,000) (26,000) (78,000 (705,000) (Note: Parentheses indicate Credit balance) Each of the above amounts represents a fair value at January 1, 2021. The fair value of the 60% percent of Johnson Corp shares not owned by Jake Corp was estimated at $1,275,000 Requirement: 1. Compute the Goodwill resulted from the purchase 2. Prepare an acquisition – date Consolidation Worksheet for Jake and its Variable Interest entity 3. Prepare a consolidation balance sheet after the acquisition Project: Consolidated Balance Sheet of and Acquisition-date consolidation worksheet for a parent and a variable interest entity' On January 1, 2021, Jake Corp. exchanged $850,000 for 40% of the out standing voting stock of Johnson Corp. Especially attractive to Jake Corp was a research project underway Johnson Corp that would enhance both quality and quantity of Chip production. Although not recorded in Johnson Corp's financial records, the fair value of the research project was considered to be $1,810,000. In contractual Agreements with the sole owner of the remaining 60% of the Johnson Corp., Jake Corp. was granted: 1. Various decision-making rights over Johnson Corp.'s operating decisions 2. Special service purchase provisions at below-market rates. As a result of these contractual; agreements, Jake Corp established itself as the primary beneficiary of Johnson Corp. Immediately after the purchase, Jake Corp. and Johnson Corp presented the following balance sheets: Jake Corp. 46,000 850,000 966,000 1,051,000 901,000 Johnson Corp. $4 26,000 Cash Investment in Johnson Corp Capitalized Chip production software Computer equipment Communication Equipment 141,000 41,000 321,000 176,000 705,000 Patent Total Assets $ 3,814,000 Long-term Debt Common Stock-Jake $ (926,000) (2,510,000) (601,000) Common Stock-Johnson Retained Earnings Total liabilities and equity (378,000) $ (3,814,000) (26,000) (78,000 (705,000) (Note: Parentheses indicate Credit balance) Each of the above amounts represents a fair value at January 1, 2021. The fair value of the 60% percent of Johnson Corp shares not owned by Jake Corp was estimated at $1,275,000 Requirement: 1. Compute the Goodwill resulted from the purchase 2. Prepare an acquisition – date Consolidation Worksheet for Jake and its Variable Interest entity 3. Prepare a consolidation balance sheet after the acquisition
Expert Answer:
Answer rating: 100% (QA)
Answer parent consolidates its subsidiaries relationship of parent and subsidiary arises if one enti... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
In preparing the consolidation worksheet for a parent company and its foreign subsidiary, what consolidation entries are made related to the cumulative translation adjustment?
-
The following items appear on the consolidated balance sheet of Boeing Inc. at December 31, 2013 (in millions). The information in parentheses was added to aid in your understanding. Accounts payable...
-
In the December 31, 2017, consolidated balance sheet of Patrick and its subsidiary, what amount of total stockholders' equity should be reported? a. $1,100,000 b. $1,125,000 c. $1,150,000 d....
-
The following e-mail message contains numerous errors related to what you've learned about planning and writing business messages. Using the information it contains, write a more effective version....
-
Fill in the blanks for each of the following independent cases (ignore income taxes): Sal Variable Expenses Contribution Margin Fixed Expenses Net Income . $960,000 2. 550,000 $533,000 $310,000...
-
True or False: 1. Banks earn no interest on reserves, whether kept as cash on hand or in accounts with the Federal Reserve. 2. If a bank lends out its excess reserves of $90,000, at the time the loan...
-
ANSI X3.5-1970-the information system flowcharting standards published by the American National Standards Institute-defines four groups of flowchart symbols and illustrates conventions regarding...
-
The total wages and salaries earned by all employees of Cutler Manufacturing Company during the month of March, as shown in the labor cost summary and the schedule of fixed administrative and sales...
-
Question 2: a) A spherical pressure vessel with a diameter of 700mm operates at a pressure of 8 MPa. The maximum allowable tensile stress in the vessel is 150 MPa. Calculate the required thickness of...
-
Isorait Co is a company which installs kitchens and bathrooms to customer specifications. It is planning to invest KShs. 4,000,000 in a new facility to convert vans and trucks into motorhomes. Each...
-
According to geologists, the San Francisco Bay Area experiences ten earthquakes with a magnitude of 5.8 or greater every 100 years. What is the standard deviation of the number of earthquakes with a...
-
the lengthof a rectangle is eight more than twinc its width. the perimeter is 88 feet find the dimension of the rectangle
-
The popularity of non-dairy or plant-based milk among health-conscious people has been rising over recent years, due to several factors including that it consists of much less sugar compared to...
-
Three aggregates are blended by weight in the following percentages: 3)50% crushed limestone, bulk dry specific gravity: 2.702 4)30% blast furnace slag, bulk dry specific gravity: 2.331 5)20% natural...
-
1/2 +2 and 16 units cost $79. Find the cost function if the marginal cost function is given by C'(x)=x" C(x) =
-
A line has the equation y-5=6x Write this equation in the form y=mx+c, where m and c are integers or fractions in their simplest forms.
-
create call outs or bubbles around areas of code interest. Focus on the specific building code sections that pertain to that area using IBC or Codes Guidebook for Interiors a. Identify the building...
-
Define the essential properties of the following types of operating systems: a. Batch b. Interactive c. Time sharing d. Real time e. Network f. Parallel g. Distributed h. Clustered i. Handheld
-
Obtain FedEx Corporation's 2016 annual report either through the ''Investor Relations'' portion of their website (do a web search for FedEx investor relations) or go to www.sec.gov and click...
-
Why is the term double-entry an appropriate expression for describing an accounting system?
-
The following income statement and vertical analysis data are available for Westman Company: Westman Company Consolidated Income Statement s (In thousands) Required: 1. Suggest why net income...
-
The large-scale column in Example 16-4 is fed a saturated liquid with mole fraction \(\mathrm{z}=0.5\), and separation is essentially complete ( \(\mathrm{x}_{\text {dist }} \sim 1.0\) and...
-
Although the largest errors in calculating the height of a packed column are errors in (1) mass transfer coefficients and (2) VLE data, calculation errors can also be significant because calculation...
-
Errors in mass transfer coefficients obviously affect the value of \(\mathrm{H}_{\mathrm{G}}\) and hence the height of the packed section. These errors also affect calculation of...
Study smarter with the SolutionInn App