On 1/1/16, Peters acquired 80% of the voting stock of Son by issuing 6 shares of...
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On 1/1/16, Peters acquired 80% of the voting stock of Son by issuing 6 shares of its $50 par value common stock having a market value of $100/share. Also, $20 was paid to consultants and $10 for stock registration fees. On 1/1/09, Son's stockholders' equity consisted of C/S $100 APIC $100 and R/E $400. On that date, three account were misvalued on the books as shown below. Assume that the amount Peters paid for its 80% share is relevant in valuing the other 20% of Son. Market value 40 70 V 50/ Book Value Land Equipment 5 yr life Liabilities Calculation Excess Value FMV BV excess 30 50 10 yrs left 70 Partial Original entrylies) 1/1/16 12/31/18 T/B Account Current Assets ??? Peters (Parent) Son (Subsid.) 72 land Equip Liabs 120 Inv. In Sub 50 200 Does Peters use Cost, Equity, Partial Eq? (circie) Elimination Entries-12/31/18 Land 241 Bidgs (net) Equip (net) 289 165.2 40 GW liab 180 150 elim S's S/E undo equity method 20 395 C/S 100 APIC RVE-beg. 100 444.4 500 MI elim interco divs Revs Exps Invest Inc Dividends MI share NI 694.8 500 misvalued assets/liabs NCI share NI 630 96 68 380 40 extra exps from misvalued assets/ liabs On 1/1/16, Peters acquired 80% of the voting stock of Son by issuing 6 shares of its $50 par value common stock having a market value of $100/share. Also, $20 was paid to consultants and $10 for stock registration fees. On 1/1/09, Son's stockholders' equity consisted of C/S $100 APIC $100 and R/E $400. On that date, three account were misvalued on the books as shown below. Assume that the amount Peters paid for its 80% share is relevant in valuing the other 20% of Son. Market value 40 70 V 50/ Book Value Land Equipment 5 yr life Liabilities Calculation Excess Value FMV BV excess 30 50 10 yrs left 70 Partial Original entrylies) 1/1/16 12/31/18 T/B Account Current Assets ??? Peters (Parent) Son (Subsid.) 72 land Equip Liabs 120 Inv. In Sub 50 200 Does Peters use Cost, Equity, Partial Eq? (circie) Elimination Entries-12/31/18 Land 241 Bidgs (net) Equip (net) 289 165.2 40 GW liab 180 150 elim S's S/E undo equity method 20 395 C/S 100 APIC RVE-beg. 100 444.4 500 MI elim interco divs Revs Exps Invest Inc Dividends MI share NI 694.8 500 misvalued assets/liabs NCI share NI 630 96 68 380 40 extra exps from misvalued assets/ liabs
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Related Book For
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III
Posted Date:
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