Kroft Foods acquired Codberry Inc. on January 1, 2019, for $40,000,000, in a stock acqusition. Codberry's...

 

Transcribed Image Text:

Kroft Foods acquired Codberry Inc. on January 1, 2019, for $40,000,000, in a stock acqusition. Codberry's aquisition-date assets and liabilities were reported at amounts approximating fair value, except its inventories (FIFO) were overvalued by $2,000,000, its property and equipment (20-year remaining life, straight-line) was overvalued by $10,000,000, and it had previously unreported identifiable intangibles (5-year remaining life, straight-line) with a fair value of $14,000,000. Goodwill from this acquisition was impaired by $1,000,000 during 2019. Kroft uses the complete equity method to account for the investment on its own books. Below are the December 31, 2019 trial balances of Kroft and Codberry: Dr (Cr) Kroft Codberry Current assets $8,000,000 $6,200,000 Property and equipment, net 110,000,000 65,000,000 Investment in Codberry 41,200,000 Liabilities (87,500,000) (46,200,000) Captial Stock (39,000,000 (2,000,000) Retained earning, January 1 (16,000,000) (20,500,000) Dividends 500,000 Sales revenue (50,000,000) (20,000,000) Equity in net income of Codberry (1,700,000) Cost of goods sold 30,000,000 15,000,000 Operating Expenses 5,000,000 2,000,000 Working paper eliminating entry (R) is: Select one: Current assets 2,000,000 Property and equipment, net 10,000,000 Identifiable intangible assets 14,000,000 Goodwill 15,500,000 Investment in Codberry 41,500,000 Identifiable intangible assets 14,000,000 Property and equipment, net 10,000,000 Current assets 2,000,000 Investment in Codberry 22,000,000 Identifiable intangible assets 14,000,000 Goodwill 15,500,000 Current assets 2,000,000 Property and equipment, net 10,000,000 Investment in Codberry 17,500,000 Identifiable intangible assets 14,000,000 Goodwill 11,500,000 Current assets 2,000,000 Property and equipment, net 10,000,000 Investment in Codberry 17,500,000 Working paper eliminating entry (O) is: Select one: Current assets 2,000,000 Property and equipment, net 500,000 Operating expenses 1,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Current assets 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Cost of goods sold 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Cost of goods sold 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Current assets 2,000,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Kroft Foods acquired Codberry Inc. on January 1, 2019, for $40,000,000, in a stock acqusition. Codberry's aquisition-date assets and liabilities were reported at amounts approximating fair value, except its inventories (FIFO) were overvalued by $2,000,000, its property and equipment (20-year remaining life, straight-line) was overvalued by $10,000,000, and it had previously unreported identifiable intangibles (5-year remaining life, straight-line) with a fair value of $14,000,000. Goodwill from this acquisition was impaired by $1,000,000 during 2019. Kroft uses the complete equity method to account for the investment on its own books. Below are the December 31, 2019 trial balances of Kroft and Codberry: Dr (Cr) Kroft Codberry Current assets $8,000,000 $6,200,000 Property and equipment, net 110,000,000 65,000,000 Investment in Codberry 41,200,000 Liabilities (87,500,000) (46,200,000) Captial Stock (39,000,000 (2,000,000) Retained earning, January 1 (16,000,000) (20,500,000) Dividends 500,000 Sales revenue (50,000,000) (20,000,000) Equity in net income of Codberry (1,700,000) Cost of goods sold 30,000,000 15,000,000 Operating Expenses 5,000,000 2,000,000 Working paper eliminating entry (R) is: Select one: Current assets 2,000,000 Property and equipment, net 10,000,000 Identifiable intangible assets 14,000,000 Goodwill 15,500,000 Investment in Codberry 41,500,000 Identifiable intangible assets 14,000,000 Property and equipment, net 10,000,000 Current assets 2,000,000 Investment in Codberry 22,000,000 Identifiable intangible assets 14,000,000 Goodwill 15,500,000 Current assets 2,000,000 Property and equipment, net 10,000,000 Investment in Codberry 17,500,000 Identifiable intangible assets 14,000,000 Goodwill 11,500,000 Current assets 2,000,000 Property and equipment, net 10,000,000 Investment in Codberry 17,500,000 Working paper eliminating entry (O) is: Select one: Current assets 2,000,000 Property and equipment, net 500,000 Operating expenses 1,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Current assets 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Cost of goods sold 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Cost of goods sold 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Current assets 2,000,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Kroft Foods acquired Codberry Inc. on January 1, 2019, for $40,000,000, in a stock acqusition. Codberry's aquisition-date assets and liabilities were reported at amounts approximating fair value, except its inventories (FIFO) were overvalued by $2,000,000, its property and equipment (20-year remaining life, straight-line) was overvalued by $10,000,000, and it had previously unreported identifiable intangibles (5-year remaining life, straight-line) with a fair value of $14,000,000. Goodwill from this acquisition was impaired by $1,000,000 during 2019. Kroft uses the complete equity method to account for the investment on its own books. Below are the December 31, 2019 trial balances of Kroft and Codberry: Dr (Cr) Kroft Codberry Current assets $8,000,000 $6,200,000 Property and equipment, net 110,000,000 65,000,000 Investment in Codberry 41,200,000 Liabilities (87,500,000) (46,200,000) Captial Stock (39,000,000 (2,000,000) Retained earning, January 1 (16,000,000) (20,500,000) Dividends 500,000 Sales revenue (50,000,000) (20,000,000) Equity in net income of Codberry (1,700,000) Cost of goods sold 30,000,000 15,000,000 Operating Expenses 5,000,000 2,000,000 Working paper eliminating entry (R) is: Select one: Current assets 2,000,000 Property and equipment, net 10,000,000 Identifiable intangible assets 14,000,000 Goodwill 15,500,000 Investment in Codberry 41,500,000 Identifiable intangible assets 14,000,000 Property and equipment, net 10,000,000 Current assets 2,000,000 Investment in Codberry 22,000,000 Identifiable intangible assets 14,000,000 Goodwill 15,500,000 Current assets 2,000,000 Property and equipment, net 10,000,000 Investment in Codberry 17,500,000 Identifiable intangible assets 14,000,000 Goodwill 11,500,000 Current assets 2,000,000 Property and equipment, net 10,000,000 Investment in Codberry 17,500,000 Working paper eliminating entry (O) is: Select one: Current assets 2,000,000 Property and equipment, net 500,000 Operating expenses 1,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Current assets 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Cost of goods sold 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Cost of goods sold 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Current assets 2,000,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Kroft Foods acquired Codberry Inc. on January 1, 2019, for $40,000,000, in a stock acqusition. Codberry's aquisition-date assets and liabilities were reported at amounts approximating fair value, except its inventories (FIFO) were overvalued by $2,000,000, its property and equipment (20-year remaining life, straight-line) was overvalued by $10,000,000, and it had previously unreported identifiable intangibles (5-year remaining life, straight-line) with a fair value of $14,000,000. Goodwill from this acquisition was impaired by $1,000,000 during 2019. Kroft uses the complete equity method to account for the investment on its own books. Below are the December 31, 2019 trial balances of Kroft and Codberry: Dr (Cr) Kroft Codberry Current assets $8,000,000 $6,200,000 Property and equipment, net 110,000,000 65,000,000 Investment in Codberry 41,200,000 Liabilities (87,500,000) (46,200,000) Captial Stock (39,000,000 (2,000,000) Retained earning, January 1 (16,000,000) (20,500,000) Dividends 500,000 Sales revenue (50,000,000) (20,000,000) Equity in net income of Codberry (1,700,000) Cost of goods sold 30,000,000 15,000,000 Operating Expenses 5,000,000 2,000,000 Working paper eliminating entry (R) is: Select one: Current assets 2,000,000 Property and equipment, net 10,000,000 Identifiable intangible assets 14,000,000 Goodwill 15,500,000 Investment in Codberry 41,500,000 Identifiable intangible assets 14,000,000 Property and equipment, net 10,000,000 Current assets 2,000,000 Investment in Codberry 22,000,000 Identifiable intangible assets 14,000,000 Goodwill 15,500,000 Current assets 2,000,000 Property and equipment, net 10,000,000 Investment in Codberry 17,500,000 Identifiable intangible assets 14,000,000 Goodwill 11,500,000 Current assets 2,000,000 Property and equipment, net 10,000,000 Investment in Codberry 17,500,000 Working paper eliminating entry (O) is: Select one: Current assets 2,000,000 Property and equipment, net 500,000 Operating expenses 1,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Current assets 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Cost of goods sold 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Cost of goods sold 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Current assets 2,000,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Kroft Foods acquired Codberry Inc. on January 1, 2019, for $40,000,000, in a stock acqusition. Codberry's aquisition-date assets and liabilities were reported at amounts approximating fair value, except its inventories (FIFO) were overvalued by $2,000,000, its property and equipment (20-year remaining life, straight-line) was overvalued by $10,000,000, and it had previously unreported identifiable intangibles (5-year remaining life, straight-line) with a fair value of $14,000,000. Goodwill from this acquisition was impaired by $1,000,000 during 2019. Kroft uses the complete equity method to account for the investment on its own books. Below are the December 31, 2019 trial balances of Kroft and Codberry: Dr (Cr) Kroft Codberry Current assets $8,000,000 $6,200,000 Property and equipment, net 110,000,000 65,000,000 Investment in Codberry 41,200,000 Liabilities (87,500,000) (46,200,000) Captial Stock (39,000,000 (2,000,000) Retained earning, January 1 (16,000,000) (20,500,000) Dividends 500,000 Sales revenue (50,000,000) (20,000,000) Equity in net income of Codberry (1,700,000) Cost of goods sold 30,000,000 15,000,000 Operating Expenses 5,000,000 2,000,000 Working paper eliminating entry (R) is: Select one: Current assets 2,000,000 Property and equipment, net 10,000,000 Identifiable intangible assets 14,000,000 Goodwill 15,500,000 Investment in Codberry 41,500,000 Identifiable intangible assets 14,000,000 Property and equipment, net 10,000,000 Current assets 2,000,000 Investment in Codberry 22,000,000 Identifiable intangible assets 14,000,000 Goodwill 15,500,000 Current assets 2,000,000 Property and equipment, net 10,000,000 Investment in Codberry 17,500,000 Identifiable intangible assets 14,000,000 Goodwill 11,500,000 Current assets 2,000,000 Property and equipment, net 10,000,000 Investment in Codberry 17,500,000 Working paper eliminating entry (O) is: Select one: Current assets 2,000,000 Property and equipment, net 500,000 Operating expenses 1,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Current assets 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Cost of goods sold 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Cost of goods sold 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Current assets 2,000,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Kroft Foods acquired Codberry Inc. on January 1, 2019, for $40,000,000, in a stock acqusition. Codberry's aquisition-date assets and liabilities were reported at amounts approximating fair value, except its inventories (FIFO) were overvalued by $2,000,000, its property and equipment (20-year remaining life, straight-line) was overvalued by $10,000,000, and it had previously unreported identifiable intangibles (5-year remaining life, straight-line) with a fair value of $14,000,000. Goodwill from this acquisition was impaired by $1,000,000 during 2019. Kroft uses the complete equity method to account for the investment on its own books. Below are the December 31, 2019 trial balances of Kroft and Codberry: Dr (Cr) Kroft Codberry Current assets $8,000,000 $6,200,000 Property and equipment, net 110,000,000 65,000,000 Investment in Codberry 41,200,000 Liabilities (87,500,000) (46,200,000) Captial Stock (39,000,000 (2,000,000) Retained earning, January 1 (16,000,000) (20,500,000) Dividends 500,000 Sales revenue (50,000,000) (20,000,000) Equity in net income of Codberry (1,700,000) Cost of goods sold 30,000,000 15,000,000 Operating Expenses 5,000,000 2,000,000 Working paper eliminating entry (R) is: Select one: Current assets 2,000,000 Property and equipment, net 10,000,000 Identifiable intangible assets 14,000,000 Goodwill 15,500,000 Investment in Codberry 41,500,000 Identifiable intangible assets 14,000,000 Property and equipment, net 10,000,000 Current assets 2,000,000 Investment in Codberry 22,000,000 Identifiable intangible assets 14,000,000 Goodwill 15,500,000 Current assets 2,000,000 Property and equipment, net 10,000,000 Investment in Codberry 17,500,000 Identifiable intangible assets 14,000,000 Goodwill 11,500,000 Current assets 2,000,000 Property and equipment, net 10,000,000 Investment in Codberry 17,500,000 Working paper eliminating entry (O) is: Select one: Current assets 2,000,000 Property and equipment, net 500,000 Operating expenses 1,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Current assets 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Cost of goods sold 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000 Cost of goods sold 2,000,000 Property and equipment, net 500,000 Operating expenses 3,300,000 Current assets 2,000,000 Identifiable intangible assets 2,800,000 Goodwill 1,000,000

Answer rating: 100% (QA)

1 Eliminating entry R Identifiable Intangible Assets 14000000 Goodwill 15500000 Curren... View the full answer