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I'm confusing with the homework, please help. I attached the questions, please look over it and help me with it. Haynes, Inc., obtained 100 percent
I'm confusing with the homework, please help. I attached the questions, please look over it and help me with it.
Haynes, Inc., obtained 100 percent of Turner Company's common stock on January 1, 2014, by issuing 9,000 shares of $10 par value common stock. Haynes's shares had a $20 per share fair value. On that date, Turner reported a net book value of $100,000. However, its equipment (with a five-year remaining life) was overvalued by $5,000 in the company's accounting records. Also, Turner had developed a customer list with an assessed value of $30,000, although no value had been recorded on Turner's books. The customer list had an estimated remaining useful life of 10 years. Turner's land was undervalued by 10,000. Turner's patent, which has 10 years of useful life remaining, was undervalued by 15,000. The following figures come from the individual accounting records of these two companies as of December 31, 2014 Revenues Expenses Investment income Dividends declared Haynes $(700,000) 460,000 Not given 90,000 The pre-acquisition balance sheets of the two companies are presented below: Current Assets Land Equipment Patent Total Assets Liabilities Common Stock Additional Paind-in Capital Retained Earnings Haynes $100,000 $200,000 $300,000 $150,000 $750,000 $350,000 $50,000 Turner $ 50,000 $50,000 $30,000 $20,000 $150,000 $50,000 $50,000 $150,000 $200,000 $50,000 a. What is balance of the investment account of Haynes right after this acquisition? Write down the relevant journal entries and the affected accounts. b. What is the consolidated balance sheet numbers for Haynes and Turner on January 1, 2014? Please fill out the table below and write down the according journal entries Current Assets Land Equipment Patent Total Assets Liabilities Common Stock Additional Paind-in Capital Retained Earnings Haynes Turner $100,000 $200,000 $300,000 $150,000 $ 50,000 $50,000 $30,000 $20,000 $750,000 $350,000 $50,000 $150,000 $50,000 $50,000 150,000 $200,000 $50,000 Consolidated Balance c. What should be the investment income of Haynes 2014? d. What should be the balance of investment account of Haynes for 2014? e. Had Haynes acquired 80% instead of 100% of Turner's shares (Haynes issued 8,000 shares instead of 9,000 shares other conditions remain the same), what is the journal entry to document the transaction? f. What should be the investment income of Haynes for 2014? g. What should be the balance of non-controlling interests on December 31, 2014? At the beginning of January 1st 2007, the financial position of company Z and B are as follows: On January 1st 2007, Z purchased 70% of B by issuing 700,000 shares of common stock (1 dollars face value and 8 dollars market price). Note that B's PPE has a remaining life of 5 years at the purchase date, and it was overvalued by $500,000, Land was undervalued by 800,000, and patent has a remaining life of 10 years and undervalued by $1,000,000. Z also determines that B's brand name has market value of $1,000,000. Company Z records the investment in Company B using equity method. a. What are the journal entries of Z and B to book the transactions? b. What does the balance sheet of Company Z, and the consolidated balance sheet look like right after the purchaseFill out the table below (note that new accounts may be created due to the consolidation) and write down the consolidation journal entries During 2007, the following transactions took place 1. Z sold a piece of land with cost of $1,500,000 to B for 2,000,000. 2. Z sold products to B for $5,000,000, which cost Z $4,000,000. By the end of 2007, 70 percent of the products were sold for $4,900,000. 3. Z reported income (not taking investment income from B into consideration) of $10,000,000 and announced and paid dividend in the amount of $2,000,000. 4. B reported net income of $3,000,000 and announced and paid dividend in the amount of 1,000,000. c. What is the investment income of Z for 2007? What is the balance of investment account by the end of 2007 for Z? d. What is the amount of income that goes to non-controlling interests? What is the amount of consolidated net income? What is the balance of non-controlling interests by the end of 2008? e. For year 2008, 2009, 2010, 2011, 2012 and 2013, B reported net income of $2,500,000, $2,500,000, $3,500,000, $3,000,000, $4,000,000. 3,500,000, assuming no upstream sales, what should the non-controlling interests' income be for the 6 yearsStep by Step Solution
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