Branson paid $465,000 cash for all of the outstanding common stock of Wolfpack, Inc., on January 1,
Question:
During the subsequent two years, Wolfpack reported the following amounts for income and dividends:
In keeping with the original acquisition agreement, on December 31, 2012, Branson paid the additional $50,000 performance fee to Wolfpacks previous owners.
Using the acquisition method and assuming no goodwill impairment charges, prepare each of the following:
a. Bransons entry to record the acquisition of the shares of its Wolfpack subsidiary.
b. Bransons entries at the end of 2011 and 2012 to adjust its contingent performance obligation for changes in fair value and the December 31, 2012, payment.
c. Consolidation worksheet entries as of December 31, 2012, assuming that Branson has applied the equity method.
d. Consolidation worksheet entries as of December 31, 2012, assuming that Branson has applied the initial valuemethod.
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Step by Step Answer:
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik