Question: 2. Use the above financial information and the acquisition method to consolidate Seth and Lucy Co. on the date of acquisition, assuming that Arhtur Co.

2. Use the above financial information and the acquisition method to

2. Use the above financial information and the acquisition method to consolidate Seth and Lucy Co. on the date of acquisition, assuming that Arhtur Co. purchased 100% of Lucy common stock. The purchase price and fee payments are the same as above. Lucy was NOT dissolved after the acquisition.
Journal entries recorded by Seth Company related to the acquisition on 01/01/2020
Debit Credit
Investment in Lucy
Goodwill
Cash
Common stock
Gain on bargain purchase
Consolidation expense
Cash
Common stock
Cash
Fair Value Adjustment Schedule
Fair value of 100% Lucy
Total equity of Lucy (BV)
Excess of fair value over book value
Adjustment of Lucy's identifiable assets and liabilities
Adjustment to FV Worksheet Key
Land
Building
Equipment
Patent
Goodwill
Total
Seth COMPANY AND CONSOLIDATED SUBSIDIARY
Consolidation Worksheet
January 1, 2013
Seth Lucy Consolidation Entries Consolidated
Accounts Company Company Debit Credit Totals
Debit Balances
Cash 20000
Inventory 210000 110000
Land 100000 180000
Buildings (net) 240000 80000
Equipment (net) 160000 50000
Patent
Investment in Lucy
Goodwill
Total debits 440000
Credit Balances
Accounts payable -50000 -40000
Long-term liabilities -430000 -200000
Common stock -80000
Retained earnings, 01/01/13, adjusted for acquisition -120000
Total credits -440000

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

Gentry, an employee of Export Packaging Company, reported directly to Broughton. Gentry alleged among other things that, during a period of approximately four months, Broughton subjected her to "40...

Q:

Lucy Co land - undervalued 10,000 Lucy Co buildings with 10 year life-undervalued 12,000 Seth Lucy Lucy Company Company Company Book Book fair value Value Value Cash $ 40,000 $ 20,000 $ 20,000...

Q:

advanced financial acct. 1. On 01/01/2020, Arthur Co. purchase all assets and liabilities of Bryant Co. by paying $40,000 cash and 20,000 shares of its own newly issued stock with $10 per share...

Q:

Question 3. On 0101/2020, Big Co. purchase 90% of Small Co. common stock for $35,000 cash and $200,000 longterm note. Bg also paid $3000 cash foc investment banking fee. Smail was not dissolved after...

Q:

Synthesis: Significance and Implications of Alternative Accounting Principles Learning Objectives Web Refer to Figure 1. Circle A indicates the universe of possible accounting principles. The dashed...

Q:

MH0007 0 0 7 7645065 Ca s ey B u rt Fra nk T. R o tha e rm e l Bank of America (in 2010) and the New Financial Landscape Stephanie Milner spent the fall and winter of 2008-2009 like many Americans,...

Q:

Part 1. 1. Bridget Co. acquired 80% of Bats and More Co. common stock on 01/01/2020. There is no difference between book value and market value for Bats and More's assets and no goodwill when Bridget...

Q:

E22-9B (Error and Change in EstimateDepreciation) Premium Doors Inc. purchased equipment on January 1, 2013, for $250,000. At that time it was estimated that the equipment wouldhave a 5-year life and...

Q:

8:41 docs.google.com 1. From an investor's point of view, a liquidating dividend from an investee is: A dividend declared by the investee in excess of its earnings in the current year. A dividend...

Q:

COMPARATIVE ANALYSIS CASE The Bristol-Myers Squibb Company (hereafter BMS) and Merck & Co. The Balance Sheets and Statements of Cash Flows of BMS and Merck are attached. The companies' complete...

Q:

COMPARATIVE ANALYSIS CASE The Bristol-Myers Squibb Company (hereafter BMS) and Merck & Co. The Balance Sheets and Statements of Cash Flows of BMS and Merck are attached. The companies' complete...

Q:

For the base case in this section, as a percentage of sales, COGS = 70%, SGA = 15 %, R&D is 2.4% Depreciation, interest expense are fixed as stated, tax is 20%. Given the following case, calculate...

Q:

On January 1, 2011, Hungryman, Inc., has the following balances for accounts receivable and allowance for doubtful accounts: Accounts Receivable ................. $1,280,000 Allowance for Doubtful...

Q:

Deferring taxes into the future may be a bad idea because: a . Deferred taxes are tantamount to a tax - free loan from the government. b . The taxpayer cannot defer recognition of income from...

Q:

P-1) (100 Pts.) A chemical manufacturing company (CMC) has a contract for the procurement of the neccssaly chemicals from four suppliers. The chemicals purchased from Supplier A are priced at $20...

Q:

Describe a time when you demonstrated initiative in your employment (or volunteer) position.

Q:

Tell me about a time when your willingness to work was demonstrated to your supervisors.

Q:

Have you ever gone through an interview process to secure a job or admission to college? How prepared did you feel for your first interview? If you could do it again, what would you do differently?