Foxx Corporation acquired all of Greenburg Company's outstanding stock on January 1, 2022, for $693,000 cash....
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Foxx Corporation acquired all of Greenburg Company's outstanding stock on January 1, 2022, for $693,000 cash. Greenburg's accounting records showed net assets on that date of $558,000, although equipment with a 10-year remaining life was undervalued on the records by $71,500. Greenburg reports net income in 2022 of $97,000 and $135,500 in 2023. The subsidiary declared dividends of $20,000 in each of these two years. Account balances for the year ending December 31, 2024, follow. Credit balances are indicated by parentheses. Revenues Cost of goods sold Depreciation expense Investment income Net income Items Retained earnings, 1/1/24 Net income Dividends declared Retained earnings, 12/31/24 Current assets Investment in subsidiary Equipment (net) Buildings (net) Land Total assets Common stock Liabilities Retained earnings Total liabilities and equity Foxx $ (860,000) 107,500 348,000 (20,000) $ (424,500) $ (1,218,000) (424,500) 120,000 $ (1,522,500) $325,000 693,000 1,054,000 826,000 666,000 $ 3,564,000 $ (1,141,500) (900,000) (1,522,500) $ (3,564,000) Greenburg $ (776,000) 194,000 375,000 $ (207,000) $ (450,500) (207,000) 20,000 $ (637,500) $ 161,000 634,000 588,000 145,000 $ 1,528,000 $ (590,500) (300,000) (637,500) $ (1,528,000) a. Determine the December 31, 2024, consolidated balance for each of the following accounts: Depreciation Expense Dividends Declared Revenues Equipment Buildings Goodwill Common Stock b. How does the parent's choice of an accounting method for its investment affect the balances computed in requirement part (a)? c. Which method of accounting for this subsidiary is the parent actually using for internal reporting purposes? d. What would be Investment income if each of the following methods had been in use? e. What would be Foxx's balance for retained earnings as of January 1, 2024, if each of the following methods had been in use? Initial value method. Partial equity method. Equity method. Complete this question by entering your answers in the tabs below. Req A Req B and C Req D and E Determine the December 31, 2024, consolidated balance for each of the following accounts. Note: Input all amount as positive values. Consolidated Depreciation expense Dividends declared Revenues Equipment Buildings Goodwill Common stock Balances Foxx Corporation acquired all of Greenburg Company's outstanding stock on January 1, 2022, for $693,000 cash. Greenburg's accounting records showed net assets on that date of $558,000, although equipment with a 10-year remaining life was undervalued on the records by $71,500. Greenburg reports net income in 2022 of $97,000 and $135,500 in 2023. The subsidiary declared dividends of $20,000 in each of these two years. Account balances for the year ending December 31, 2024, follow. Credit balances are indicated by parentheses. Revenues Cost of goods sold Depreciation expense Investment income Net income Items Retained earnings, 1/1/24 Net income Dividends declared Retained earnings, 12/31/24 Current assets Investment in subsidiary Equipment (net) Buildings (net) Land Total assets Common stock Liabilities Retained earnings Total liabilities and equity Foxx $ (860,000) 107,500 348,000 (20,000) $ (424,500) $ (1,218,000) (424,500) 120,000 $ (1,522,500) $325,000 693,000 1,054,000 826,000 666,000 $ 3,564,000 $ (1,141,500) (900,000) (1,522,500) $ (3,564,000) Greenburg $ (776,000) 194,000 375,000 $ (207,000) $ (450,500) (207,000) 20,000 $ (637,500) $ 161,000 634,000 588,000 145,000 $ 1,528,000 $ (590,500) (300,000) (637,500) $ (1,528,000) a. Determine the December 31, 2024, consolidated balance for each of the following accounts: Depreciation Expense Dividends Declared Revenues Equipment Buildings Goodwill Common Stock b. How does the parent's choice of an accounting method for its investment affect the balances computed in requirement part (a)? c. Which method of accounting for this subsidiary is the parent actually using for internal reporting purposes? d. What would be Investment income if each of the following methods had been in use? e. What would be Foxx's balance for retained earnings as of January 1, 2024, if each of the following methods had been in use? Initial value method. Partial equity method. Equity method. Complete this question by entering your answers in the tabs below. Req A Req B and C Req D and E Determine the December 31, 2024, consolidated balance for each of the following accounts. Note: Input all amount as positive values. Consolidated Depreciation expense Dividends declared Revenues Equipment Buildings Goodwill Common stock Balances
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Requirement A Consolidated Balance for Each Account Depreciation Expense Foxx 20000 Greenburg 194000 20000 174000 Consolidated 20000 Foxx 174000 Greenburg 194000 Dividends Declared Foxx 20000 Greenbur... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
Posted Date:
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