Question
1- On July 1, 2018, Tremen Corporation acquired 35% of the shares of Delany Company. Tremen paid $3,060,000 for the investment, and that amount is
1- On July 1, 2018, Tremen Corporation acquired 35% of the shares of Delany Company. Tremen paid $3,060,000 for the investment, and that amount is exactly equal to 35% of the book value of identifiable net assets on Delany's balance sheet. Delany recognized net income of $1,000,000 for 2018, and paid $180,000 of dividends each quarter to its shareholders. After all closing entries are made, Tremen's "Investment in Delany Company" account would have a balance of:
2-On January 1, 2018, Green Corporation purchased 34% of the outstanding voting common stock of Gold Company for $300,650. The book value of the acquired shares was $275,650. The excess of cost over book value is attributable to an intangible asset on Gold's books that was undervalued and had a remaining useful life of five years. For the year ended December 31, 2018, Gold reported net income of $125,550 and paid cash dividends of $25,900. What is the carrying value of Green's investment in Gold at December 31, 2018?
3-On December 31, 2018, L Inc. had a $2,000,000 note payable outstanding, due July 31, 2019. L borrowed the money to finance construction of a new plant. L planned to refinance the note by issuing long-term bonds. Because L temporarily had excess cash, it prepaid $550,000 of the note on January 23, 2019. In February 2019, L completed a $3,500,000 bond offering. L will use the bond offering proceeds to repay the note payable at its maturity and to pay construction costs during 2019. On March 13, 2019, L issued its 2018 financial statements. What amount of the note payable should L include in the current liabilities section of its December 31, 2018, balance sheet?
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