Project: Consolidated Balance Sheet of and Acquisition-date consolidation worksheet for a parent and a variable interest...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Project: Consolidated Balance Sheet of and Acquisition-date consolidation worksheet for a parent and a variable interest entity' On January 1, 2021, Jake Corp. exchanged $850,000 for 40% of the out standing voting stock of Johnson Corp. Especially attractive to Jake Corp was a research project underway Johnson Corp that would enhance both quality and quantity of Chip production. Although not recorded in Johnson Corp's financial records, the fair value of the research project was considered to be $1,810,000. In contractual Agreements with the sole owner of the remaining 60% of the Johnson Corp., Jake Corp. was granted: 1. Various decision-making rights over Johnson Corp.'s operating decisions 2. Special service purchase provisions at below-market rates. As a result of these contractual; agreements, Jake Corp established itself as the primary beneficiary of Johnson Corp. Immediately after the purchase, Jake Corp. and Johnson Corp presented the following balance sheets: Jake Corp. 46,000 850,000 966,000 1,051,000 901,000 Johnson Corp. $4 26,000 Cash Investment in Johnson Corp Capitalized Chip production software Computer equipment Communication Equipment 141,000 41,000 321,000 176,000 705,000 Patent Total Assets $ 3,814,000 Long-term Debt Common Stock-Jake $ (926,000) (2,510,000) (601,000) Common Stock-Johnson Retained Earnings Total liabilities and equity (378,000) $ (3,814,000) (26,000) (78,000 (705,000) (Note: Parentheses indicate Credit balance) Each of the above amounts represents a fair value at January 1, 2021. The fair value of the 60% percent of Johnson Corp shares not owned by Jake Corp was estimated at $1,275,000 Requirement: 1. Compute the Goodwill resulted from the purchase 2. Prepare an acquisition – date Consolidation Worksheet for Jake and its Variable Interest entity 3. Prepare a consolidation balance sheet after the acquisition Project: Consolidated Balance Sheet of and Acquisition-date consolidation worksheet for a parent and a variable interest entity' On January 1, 2021, Jake Corp. exchanged $850,000 for 40% of the out standing voting stock of Johnson Corp. Especially attractive to Jake Corp was a research project underway Johnson Corp that would enhance both quality and quantity of Chip production. Although not recorded in Johnson Corp's financial records, the fair value of the research project was considered to be $1,810,000. In contractual Agreements with the sole owner of the remaining 60% of the Johnson Corp., Jake Corp. was granted: 1. Various decision-making rights over Johnson Corp.'s operating decisions 2. Special service purchase provisions at below-market rates. As a result of these contractual; agreements, Jake Corp established itself as the primary beneficiary of Johnson Corp. Immediately after the purchase, Jake Corp. and Johnson Corp presented the following balance sheets: Jake Corp. 46,000 850,000 966,000 1,051,000 901,000 Johnson Corp. $4 26,000 Cash Investment in Johnson Corp Capitalized Chip production software Computer equipment Communication Equipment 141,000 41,000 321,000 176,000 705,000 Patent Total Assets $ 3,814,000 Long-term Debt Common Stock-Jake $ (926,000) (2,510,000) (601,000) Common Stock-Johnson Retained Earnings Total liabilities and equity (378,000) $ (3,814,000) (26,000) (78,000 (705,000) (Note: Parentheses indicate Credit balance) Each of the above amounts represents a fair value at January 1, 2021. The fair value of the 60% percent of Johnson Corp shares not owned by Jake Corp was estimated at $1,275,000 Requirement: 1. Compute the Goodwill resulted from the purchase 2. Prepare an acquisition – date Consolidation Worksheet for Jake and its Variable Interest entity 3. Prepare a consolidation balance sheet after the acquisition
Expert Answer:
Answer rating: 100% (QA)
Answer parent consolidates its subsidiaries relationship of parent and subsidiary arises if one enti... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
In preparing the consolidation worksheet for a parent company and its foreign subsidiary, what consolidation entries are made related to the cumulative translation adjustment?
-
The following items appear on the consolidated balance sheet of Boeing Inc. at December 31, 2013 (in millions). The information in parentheses was added to aid in your understanding. Accounts payable...
-
In the December 31, 2017, consolidated balance sheet of Patrick and its subsidiary, what amount of total stockholders' equity should be reported? a. $1,100,000 b. $1,125,000 c. $1,150,000 d....
-
The following e-mail message contains numerous errors related to what you've learned about planning and writing business messages. Using the information it contains, write a more effective version....
-
Describe in very general terms the as-is business process for registering for classes at your university. Collaborate with another student in your class and evaluate the process using activity...
-
Most query optimization techniques are designed to make the optimizers work easier. What factors should you keep in mind if you intend to write conditional expressions in SQL code?
-
Summarize differences between the privity, foreseen users and reasonably foreseeable users standards.
-
Here and on page 84 are financial statements of Ogleby Company. OGLEBY COMPANY Income Statement For the Year Ended December 31, 2014 Net sales ..........$2,218,500 Cost of goods sold ..... 1,012,400...
-
early in 2012 dobbs corporation engaged kiner ,inc to design and construct a compleate modernization of dobbs manufacturing facility .construction was begun on june 1,2012 and was completed on...
-
It is proposed to transport a precision electronic equipment of weight W = 5000 N by a trailer. The electronic equipment is placed in the trailer on a rubber mount of stiffness k = 10,000 N/m. The...
-
when looking at the SOUTH AFRICAN context and analysing the article "eskom of south africa's death spiral" by Michael H . Moffett: 1 . 1 . How does Eskom's crisis underscore the importance of...
-
Frigg insurance inc has a bond outstanding with 9 years to maturity, a 6 . 5 % coupon quarterly coupon payments and $ 1 0 0 0 par value. the bond has a yield to maturity of 8 . 2 5 % and can be...
-
NCCs controller believes Portables model will be obsolete within 5 years due to a myriad of consumer preference, quality control and labor issues. He recommended, unsuccessfully, to Ms. Diaz that...
-
Analysis these 3 Financial ratios. Price-to-Earnings Ratio (P/E Ratio), Debt-to-Equity Ratio and Inventory Turnover Ratio in this company: Incitec Pivot limited (IPL) over the past 5 financial years,...
-
A company has an expected dividend of $2.50 in one year and a required rate of return of 12%. What is the value of the company\'s stock today?.
-
One Primary Source Annotation citation and annotation Share one primary source related your topic; provide the citation and a brief annotation. Just to clarify, a primary source is generally a first...
-
Which of the following is an example of a capital investment project that focuses on minimizing resource waste and environmental degradation as a CSR objective? a. Foxburg Manufacturing installs a caf
-
Calculate the number of neutrons of 239Pu.
-
Obtain FedEx Corporation's 2016 annual report either through the ''Investor Relations'' portion of their website (do a web search for FedEx investor relations) or go to www.sec.gov and click...
-
Why is the term double-entry an appropriate expression for describing an accounting system?
-
The following income statement and vertical analysis data are available for Westman Company: Westman Company Consolidated Income Statement s (In thousands) Required: 1. Suggest why net income...
-
(EAIR annuity) Your lovely wife has decided to buy you a vacuum cleaner for your birthday (she always supports you in your hobbies). She called your best friend, a manager of a vacuum cleaner store,...
-
(EAIR annuity) You have two options of paying for your new dishwasher: You can either make a single payment of $400 today, or you can pay $70 for each of the next 6 months, with the first payment...
-
Explain how errors in ending inventory affect statements of earnings and statements of financial position. - Inventory errors can arise for a number of reasons, including incorrect counts of...
Study smarter with the SolutionInn App