Provide the journal entry to record the asset transfer Calculate the amount of goodwill or bargain purchase.
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Provide the journal entry to record the asset transfer Calculate the amount of goodwill or bargain purchase.
Assume that Parent Company decides to acquire Sub Company for $564,000 of debentures | |||||||
Sub Company Balance Sheet | Prepare the consolidating journal entries for a 100% Asset Acquisition | ||||||
Assets, Liabilities & Equities | Book Value | Fair Value | Account | Amount | DR | CR | |
Cash | $40,000 | $40,000 | |||||
AR | $15,000 | $10,000 | |||||
Inventory | $105,000 | $200,000 | |||||
Land | $60,000 | $100,000 | |||||
Plant and Equipment | $400,000 | $300,000 | |||||
Less: Accumulated Depreciation | -$150,000 | ||||||
Goodwill | $10,000 | ||||||
Patent | $0 | $0 | |||||
Total Assets | $480,000 | $650,000 | |||||
AP | $50,000 | $50,000 | |||||
Common Stock | $100,000 | ||||||
Additional Paid In Capital | $60,000 | ||||||
Retained Earnings | $270,000 | ||||||
Total Liabilities & Equity | $480,000 | ||||||
Assume that Parent Company decides to acquire Sub Company for $580,000 of debentures | |||||||
Sub Company Balance Sheet | Prepare the consolidating journal entries for a 100% Asset Acquisition | ||||||
Assets, Liabilities & Equities | Book Value | Fair Value | Account | Amount | DR | CR | |
Cash | $40,000 | $40,000 | |||||
AR | $15,000 | $10,000 | |||||
Inventory | $105,000 | $200,000 | |||||
Land | $60,000 | $100,000 | |||||
Plant and Equipment | $400,000 | $300,000 | |||||
Less: Accumulated Depreciation | -$150,000 | ||||||
Goodwill | $10,000 | ||||||
Patent | $0 | $0 | |||||
Total Assets | $480,000 | $650,000 | |||||
AP | $50,000 | $50,000 | |||||
Common Stock | $100,000 | ||||||
Additional Paid In Capital | $60,000 | ||||||
Retained Earnings | $270,000 | ||||||
Total Liabilities & Equity | $480,000 | ||||||
Assume that Parent Company decides to acquire Sub Company for $625,000 of debentures | |||||||
Sub Company Balance Sheet | Prepare the consolidating journal entries for a 100% Asset Acquisition (using Cash) | ||||||
Assets, Liabilities & Equities | Book Value | Fair Value | Account | Amount | DR | CR | |
Cash | $40,000 | $40,000 | |||||
AR | $15,000 | $10,000 | |||||
Inventory | $105,000 | $200,000 | |||||
Land | $60,000 | $100,000 | |||||
Plant and Equipment | $400,000 | $300,000 | |||||
Less: Accumulated Depreciation | -$150,000 | ||||||
Goodwill | $10,000 | ||||||
Patent | $0 | $0 | |||||
Total Assets | $480,000 | $650,000 | |||||
AP | $50,000 | $50,000 | |||||
Common Stock | $100,000 | ||||||
Additional Paid In Capital | $60,000 | ||||||
Retained Earnings | $270,000 | ||||||
Total Liabilities & Equity | $480,000 |
Related Book For
South-Western Federal Taxation 2019 Essentials of Taxation Individuals and Business Entities
ISBN: 9781337702966
22nd edition
Authors: William A. Raabe, James C. Young, Annette Nellen, David M. Maloney
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