excel 32. Father, Inc., buys 80 percent of the outstanding common stock of Sam Corporation on January 1, 2009, for $680,000 cash. At the acquisition date, Sam's total fair value was assessed at $850,000 although Sam's book value was only $600,000. Also, several individual items on Sam's financial records had fair values that differed from their book values as follows: Book Value $ 60,000 Land Buildings and equipment (10-year remaining life) Copyright (20-year life) Notes payable (due in 8 years) Fair Value $225,000 250,000 200,000 (120,000) 275,000 100,000 (130,000) For internal reporting purposes, Father, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2009, for both companies. Using the acquisition method, determine consolidated balances for this business combination WPE In a journal entry through either individual computations or the use of a workshee). Format= Total Dr/CR venues 1350 Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sam Net income Retained earnings, 1/1/09 Net income (above) Dividends paid Retained earnings, 12/31/09 Current assets Investment in Sam Land ... Buildings and equipment (net) Copyright ... Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings (above) Total liabilities and equities Father Sam $(1,360,000) $(540,000) 700,000 385,000 260,000 10,000 5,000 44,000 5,000 (105;000) $ (461,000), 3(135,000 $(1,265,000) $(440,000) (461,000) (135,000) 260,000 65,000 $(1,466,000) $(510,000) $ 965,000 $ 528,000 733,000 -0- 292,000 60,000 877,000 265,000 -0- 95,000 $ 2,867,000 5948,000 $(191,000) $(148,000) (460,000) (130,000) (300,000) (100,000) (450,000) (60,000) (1,466,000) (510,000) $(2,867,000) $(948,000) excel 32. Father, Inc., buys 80 percent of the outstanding common stock of Sam Corporation on January 1, 2009, for $680,000 cash. At the acquisition date, Sam's total fair value was assessed at $850,000 although Sam's book value was only $600,000. Also, several individual items on Sam's financial records had fair values that differed from their book values as follows: Book Value $ 60,000 Land Buildings and equipment (10-year remaining life) Copyright (20-year life) Notes payable (due in 8 years) Fair Value $225,000 250,000 200,000 (120,000) 275,000 100,000 (130,000) For internal reporting purposes, Father, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2009, for both companies. Using the acquisition method, determine consolidated balances for this business combination WPE In a journal entry through either individual computations or the use of a workshee). Format= Total Dr/CR venues 1350 Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sam Net income Retained earnings, 1/1/09 Net income (above) Dividends paid Retained earnings, 12/31/09 Current assets Investment in Sam Land ... Buildings and equipment (net) Copyright ... Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings (above) Total liabilities and equities Father Sam $(1,360,000) $(540,000) 700,000 385,000 260,000 10,000 5,000 44,000 5,000 (105;000) $ (461,000), 3(135,000 $(1,265,000) $(440,000) (461,000) (135,000) 260,000 65,000 $(1,466,000) $(510,000) $ 965,000 $ 528,000 733,000 -0- 292,000 60,000 877,000 265,000 -0- 95,000 $ 2,867,000 5948,000 $(191,000) $(148,000) (460,000) (130,000) (300,000) (100,000) (450,000) (60,000) (1,466,000) (510,000) $(2,867,000) $(948,000)
