Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

asap Accounting Company acquires all of 305 Company's outstanding common stock for CU 600,000, an amount equal to the fair value of 305 Company as

image text in transcribedimage text in transcribedimage text in transcribedasap

Accounting Company acquires all of 305 Company's outstanding common stock for CU 600,000, an amount equal to the fair value of 305 Company as a whole. 305 Company is the main raw material supplier of Accounting Company and it's market share is increasing in last 5 years. On the date of combination, the fair values of 305's individual assets and liabilities are equal to their book values as shown. Balance sheets of Accounting and 305 immediately before combination: Accounting 305 700 150 200 350 1.600 -800 100 100 120 80 1200 -600 Assets Cash Accounts Receivable Inventory Land Buildings & Equipment Accumulated Depreciation Total Assets Liabilities & Stockholders' Equity Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities & Equity 2.200 1.000 200 200 200 400 1000 600 2.200 400 2001) Please record the purchase of 305. 1.000 2) Please journalize basic consolidation entry. 3) Please journalize accumulated depreciation consolidation entry. 4) Please critically discuss the potential reasons of acquisitions of 305 by Accounting Company

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internationale Rechnungslegung IFRS Praxis

Authors: Author

1st Edition

3834909289, 9783834909282

More Books

Students also viewed these Accounting questions

Question

What is the volume of 2.884 kg of gold?

Answered: 1 week ago

Question

Change the given angles to radian measure. 125.2

Answered: 1 week ago

Question

How does the concept of hegemony relate to culture?

Answered: 1 week ago

Question

=+b. Would you need to edit down the copy for a smaller-space ad?

Answered: 1 week ago

Question

=+4. About the medium.

Answered: 1 week ago