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Hi, I believe I am missing a main component for this assignment. My professor's analysis was this: Analysis results; 1. NOt CORRECT 36,000 Gain on
Hi,
I believe I am missing a main component for this assignment. My professor's analysis was this:
Analysis results; 1. NOt CORRECT 36,000 Gain on sale (credit). 2. NOT CORRECT 20,000 Gain on Sale (credit). 3. NOT CORRECT 25,000 Goodwill (debit)
Can someone explain to me in layman's terms where I went wrong? I've attached my spreadsheet on what I did. Thank you.
ACT470: Advanced Accounting Dr. Edward N. Balli Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Patent Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Module 1: Critical Thinking:decides Option 2 to acquire Sub Company for $564,000 Lindy Werges Assume that Parent Company ofHuang debentures Fundamental Journal Entries and Calculations Sub Company Balance Sheet Book Value Fair Value $40,000 $40,000 $15,000 $10,000 $105,000 $200,000 $60,000 $100,000 $400,000 $300,000 -$150,000 $10,000 $0 $480,000 $50,000 $100,000 $60,000 $270,000 $480,000 August 14, 2016 $0 $650,000 $50,000 Assume that Parent Company decides to acquire Sub Company for $580,000 of debentures Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Patent Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Sub Company Balance Sheet Book Value $40,000 $15,000 $105,000 $60,000 $400,000 -$150,000 $10,000 $0 $480,000 $50,000 $100,000 $60,000 $270,000 $480,000 Fair Value $40,000 $10,000 $200,000 $100,000 $300,000 $0 $650,000 $50,000 ACT470: Advanced Accounting Dr. Edward N. Balli Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Patent Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Module 1: Critical Thinking:decides Option 2 to acquire Sub Company for $625,000 Lindy Werges Assume that Parent Company ofHuang debentures Fundamental Journal Entries and Calculations Sub Company Balance Sheet Book Value Fair Value $40,000 $40,000 $15,000 $10,000 $105,000 $200,000 $60,000 $100,000 $400,000 $300,000 -$150,000 $10,000 $0 $480,000 $50,000 $100,000 $60,000 $270,000 $480,000 $0 $650,000 $50,000 August 14, 2016 ACT470: Advancedfor Accounting ire Sub Company $564,000 of debentures Module 1: Critical Thinking: Option 2 Dr. Edward N. Balli Fundamental Journal Entries and Calculations Prepare the consolidating journal entries for a 100% Asset Acquisition Account Amount DR CR Investment in Parent Company $564,000 $564,000 Current Liabilities $50,000 $50,000 Accumulated Depreciation $150,000 $150,000 Cash and Receivables $55,000 $55,000 Inventory $105,000 $105,000 Land $60,000 $60,000 Plant and Equipment $400,000 $400,000 Goodwill $10,000 $10,000 Gain on Sale of Net Assets $134,000 $134,000 Common Stock Additional Paid-In Capital Retained Earnings Gain on Sale of Net Assets Investment in Parent Company $100,000 $100,000 $60,000 $60,000 $270,000 $270,000 $134,000 $134,000 $564,000 $564,000 ire Sub Company for $580,000 of debentures Prepare the consolidating journal entries for a 100% Asset Acquisition Account Amount DR CR Investment in Parent Company $580,000 $580,000 Current Liabilities $50,000 $50,000 Accumulated Depreciation $150,000 $150,000 Cash and Receivables $55,000 $55,000 Inventory $105,000 $105,000 Land $60,000 $60,000 Plant and Equipment $400,000 $400,000 Goodwill $10,000 $10,000 Gain on Sale of Net Assets $150,000 $150,000 Common Stock Additional Paid-In Capital Retained Earnings Gain on Sale of Net Assets Investment in Parent Company $100,000 $100,000 $60,000 $60,000 $270,000 $270,000 $150,000 $150,000 $580,000 $580,000 Lindy Huang Werges August 14, 2016 ACT470: Advancedfor Accounting ire Sub Company $625,000 of debentures Module 1: Critical Thinking: Option 2 Dr. Edward N. Balli Fundamental Journal Entries and Calculations Prepare the consolidating journal entries for a 100% Asset Acquisition (using Cash) Account Amount DR CR Investment in Parent Company $625,000 $625,000 Current Liabilities $50,000 $50,000 Accumulated Depreciation $150,000 $150,000 Cash and Receivables $55,000 $55,000 Inventory $105,000 $105,000 Land $60,000 $60,000 Plant and Equipment $400,000 $400,000 Goodwill $10,000 $10,000 Gain on Sale of Net Assets $195,000 $195,000 Common Stock Additional Paid-In Capital Retained Earnings Gain on Sale of Net Assets Investment in Parent Company $100,000 $100,000 $60,000 $60,000 $270,000 $270,000 $195,000 $195,000 $625,000 $625,000 Lindy Huang Werges August 14, 2016
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