Raj Ltd. issued 10,000 shares of $10 par common stock with a total market value of...
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Raj Ltd. issued 10,000 shares of $10 par common stock with a total market value of $800,000 to purchase 40 percent ownership of Akash Ltd. on January 1, 2014. Akash Ltd. had net assets of $2,250,000 at the beginning of the year. The information relatingto the difference between book values and fair values of Akash Ltd. on January 1, 2014, is as follows (in thousands): Book Value Fair Value S130,000 500,000 S150,000 Inventory Equipment-net (4 years useful life) Notes Payable (Due in 8 years) 460,000 220,000 300,000 Akash Lid, declared dividends of $160,000 on December I and reported S400,0X0 net income for the year. REQUIRED 1. Prepare a schedule for allocating the investiment cost over the book value/fair value of the interest acquired. 2. Prepare all necessary journal entries for Akash Ld. in 2014. 3. Caleulate the investment in Akash Ltd.'s balance at December 31, 2014. Raj Ltd. issued 10,000 shares of $10 par common stock with a total market value of $800,000 to purchase 40 percent ownership of Akash Ltd. on January 1, 2014. Akash Ltd. had net assets of $2,250,000 at the beginning of the year. The information relatingto the difference between book values and fair values of Akash Ltd. on January 1, 2014, is as follows (in thousands): Book Value Fair Value S130,000 500,000 S150,000 Inventory Equipment-net (4 years useful life) Notes Payable (Due in 8 years) 460,000 220,000 300,000 Akash Lid, declared dividends of $160,000 on December I and reported S400,0X0 net income for the year. REQUIRED 1. Prepare a schedule for allocating the investiment cost over the book value/fair value of the interest acquired. 2. Prepare all necessary journal entries for Akash Ld. in 2014. 3. Caleulate the investment in Akash Ltd.'s balance at December 31, 2014.
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Ques 1 RAJ LTD AND ITS 40OWNED EQUITY INVESTEE AKASH LTD IN THOUSANDS Investment in Akash Ltd 800 Bo... View the full answer
Related Book For
Intermediate Accounting 2014 FASB Update
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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