Question 4 - prepare the consolidated balance sheet on the date of acquisition under the Fair...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Question 4 - prepare the consolidated balance sheet on the date of acquisition under the Fair Value Enterprise Method Keen Inc. purchases 80% of Lax Inc. outstanding shares for cash of $240,000 on November 1, 2019, prepare the consolidated balance sheet on the date of acquisition under the Fair Value Enterprise Method. Below you have been provided with the year end balance sheets of Keen Inc. and Lax immediately before the acquisition on October 31, 2019: Keen Inc. Lax Inc. Lax Inc. (carrying value) (carrying value) (fair value) Cash $300,000 $ 80,000 $ 80,000 Accounts Receivable $ 60,000 $ 24,000 $ 24,000 Inventory $ 30,000 $ 54,000 $ 50,000 Plant and Equipment (net) $310,000 $280,000 $300,000 Trademark $ 12,000 $ 16,000 Total Assets $700,000 $450,000 Accounts Payable $150,000 $200,000 $200,000 Bonds Payable $400,000 $120,000 $100,000 Common Shares $100,000 $ 60,000 Retained Earnings $ 50,000 $ 70,000 Total Liabilities and Equity $700,000 $450,000 Using the template below prepare the consolidated balance sheet. Keen Inc. Consolidated Balance Sheet as at November 1, 2019 Question 4 - prepare the consolidated balance sheet on the date of acquisition under the Fair Value Enterprise Method Keen Inc. purchases 80% of Lax Inc. outstanding shares for cash of $240,000 on November 1, 2019, prepare the consolidated balance sheet on the date of acquisition under the Fair Value Enterprise Method. Below you have been provided with the year end balance sheets of Keen Inc. and Lax immediately before the acquisition on October 31, 2019: Keen Inc. Lax Inc. Lax Inc. (carrying value) (carrying value) (fair value) Cash $300,000 $ 80,000 $ 80,000 Accounts Receivable $ 60,000 $ 24,000 $ 24,000 Inventory $ 30,000 $ 54,000 $ 50,000 Plant and Equipment (net) $310,000 $280,000 $300,000 Trademark $ 12,000 $ 16,000 Total Assets $700,000 $450,000 Accounts Payable $150,000 $200,000 $200,000 Bonds Payable $400,000 $120,000 $100,000 Common Shares $100,000 $ 60,000 Retained Earnings $ 50,000 $ 70,000 Total Liabilities and Equity $700,000 $450,000 Using the template below prepare the consolidated balance sheet. Keen Inc. Consolidated Balance Sheet as at November 1, 2019
Expert Answer:
Answer rating: 100% (QA)
Consolidated Balance Sheet of Keen Inc as at November 12019 Amounts in Assets Amount Cash Note 2 140... View the full answer
Posted Date:
Students also viewed these accounting questions
-
You have been provided with the following information about two companies: Required: a. Calculate the current ratio for each company and the amount of working capital each company has. b. Which...
-
You have been provided with the following information about Everell Inc. (Everell). Required: a. Calculate the accounts receivable, inventory, and accounts payable turnover ratios for 2016 through...
-
You have been provided with the following operating statement, which represents an attempt to compare the actual performance for the quarter which has just ended with the budget: (a) Using a flexible...
-
The following data are from the accounting records of Niles Castings for year 2: Units produced and sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,000 Total revenues and costs Sales...
-
Cabernet Incorporated is a BC- based wine producer. In anticipation of a particularly bounteous grape harvest and a potential problem in obtaining a sufficient volume of shipping crates, Cabernet...
-
A married couple filing jointly has a combined total adjusted gross income of $75,000. They have computed that their allowable itemized deductions are $4000. Compute their federal income tax.
-
Flying High plc plans to expand rapidly over the next five years and is considering the following forms of finance to support that expansion. (a) A five-year 10 million floating-rate term loan from...
-
OceanBound uses three processes to manufacture lifts for personal watercrafts: forming a lift's parts from galvanized steel, assembling the lift, and testing the completed lifts. The lifts are...
-
1 . Will you change your recommendation for investment to your clients if they came to see you in December 2 0 1 9 and in March 2 0 2 4 ? Please provide brief justification. The recommendation is...
-
The ABC corporation is contemplating purchasing a new computer system that would yield a before- tax return of 30 percent. The system would depreciate at a rate of 1 percent a year. The after-tax...
-
City W in Delaware has a population of 71,000 and city N in Delaware has a population of 5,300. W and N are 6 miles apart. According to Reilly's law, what is the point of indifference for shoppers...
-
A number of situations that pertain to the auditor's liability under common and statutory law are described below. At the end of each case, a statement is made concerning one or more of the parties...
-
Risk Capital Limited, a Delaware corporation, was considering the purchase of a substantial amount of the treasury stock held by Florida Sunshine Corporation, a closely held corporation. Initial...
-
How do you create a WBS in Project 2016?
-
Keen, a CPA and sole practitioner, was retained by Arthur \& Son, a partnership, to audit the company books and prepare a report on the financial statements for submission to several prospective...
-
Donald Sharpe recently joined the CPA firm of Spark, Watts, and Wilcox. He quickly established a reputation for thoroughness and a steadfast dedication to following prescribed auditing procedures to...
-
Write the equation of the parabola in standard form and graph. 6) x+10x-4y+1=0 5) y-2y+16x-31=0 7) Write an equation of the parabola 8) Write an equation of the parabola with vertex (1, -3) and focus...
-
Imagine you are the HR manager at a company, and a female employee came to you upset because she felt a male coworker was creating a hostile work environment by repeatedly asking her out on dates...
-
Sole traders, partnerships and limited companies all have different users who need financial information for different purposes. Discuss.
-
What is fi nancial accounting and why is its study important?
-
Formal defi nitions The objective of general purpose fi nancial reporting is to provide fi nancial information about the reporting entity that is useful to existing and potential investors, lenders...
Study smarter with the SolutionInn App