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ClassCo buys 25% of StudentCo for : $2,70,000 on 12/31/2xx1 StudentCo. BS Brief: Assets $21,70,000 Liabilities $18,00,000 Equity $3,70,000 During ClassCo review of StudentCo, it
| ClassCo buys 25% of StudentCo for : | $2,70,000 | on 12/31/2xx1 | |||
| StudentCo. BS Brief: | |||||
| Assets | $21,70,000 | ||||
| Liabilities | $18,00,000 | ||||
| Equity | $3,70,000 | ||||
| During ClassCo review of StudentCo, it was determined | |||||
| certain assets were either on StudentCo BS below fair value | |||||
| or that the assets were not on BS at all, to wit: | |||||
| StudentCo BS value | Fair Value | Life | |||
| PPE | $5,00,000 | $5,65,000 | 5 | ||
| Patents | $- | $2,35,000 | 10 | ||
| Trademarks | $- | $75,000 | indefinite | ||
| During year after acquisition StudentCo had: | |||||
| paid dividends to all shareholders the total of: | $40,000 | ||||
| Recorded net Income of: | $1,04,000 | ||||
| TO do: | |||||
| A | Schedule of values attributable to ClassCo investment | on 12/31/2xx1 | |||
| including in excess of book value [BV] totalling to amount paid for investment | |||||
| B | Based upon fact set above | Complete schedule below AND | |||
| Prepare Journal Entries in year after acquisition including at that YE of | |||||
| StudentCo activities & any Deprec. Or amortization | for YE 2xx2 | ||||
| C | What is ClassCo YE investment balance for StudentCo | for YE 2xx2 | |||
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Internal Quality Systems Auditing
Authors: Paul F. Lewis
1st Edition
1570744076, 978-1570744075
