Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Nichols Company acquired 100% of Bosely Company's outstanding common stock for $128,000 on January 1, 2016. At that date, the fair value of Bosely's buildings

image text in transcribedimage text in transcribed

Nichols Company acquired 100% of Bosely Company's outstanding common stock for $128,000 on January 1, 2016. At that date, the fair value of Bosely's buildings and equipment was $20,000 more than the book value. Buildings and equipment are depreciated on a 10 year basis. Although goodwill is not amortized, Nichol's management concluded at December 31, 2016, that goodwill was impaired and the carrying value was $2,500 Trial Balances at December 31, 2016 Nichols Company Debit Bosely Company Debit Credit Credit Cash Accounts Receivable Inventory Investment in Bosely Stock Land Buildings and Equipment Accumulated Depreciation Accounts Payable Wages Payable Bonds Payable Common Stock Retained Earnings Dividends Declared Sales Income from Bosel $19,500 70,000 90,000 128,500 30,000 350,000 $21,000 12,000 25,000 15,000 150,000 $ 145,000 45,000 17,000 150,000 200,000 102,000 $ 40,000 16,000 9,000 50,000 60,000 40,000 Retained Earnings is a beginning of year amount. 30,000 16,000 180,000 260,000 16,500 Nichols Company acquired 100% of Bosely Company's outstanding common stock for $128,000 on January 1, 2016. At that date, the fair value of Bosely's buildings and equipment was $20,000 more than the book value. Buildings and equipment are depreciated on a 10 year basis. Although goodwill is not amortized, Nichol's management concluded at December 31, 2016, that goodwill was impaired and the carrying value was $2,500 Trial Balances at December 31, 2016 Nichols Company Debit Bosely Company Debit Credit Credit Cash Accounts Receivable Inventory Investment in Bosely Stock Land Buildings and Equipment Accumulated Depreciation Accounts Payable Wages Payable Bonds Payable Common Stock Retained Earnings Dividends Declared Sales Income from Bosel $19,500 70,000 90,000 128,500 30,000 350,000 $21,000 12,000 25,000 15,000 150,000 $ 145,000 45,000 17,000 150,000 200,000 102,000 $ 40,000 16,000 9,000 50,000 60,000 40,000 Retained Earnings is a beginning of year amount. 30,000 16,000 180,000 260,000 16,500

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

Auditing A Practical Approach With Data Analytics

Authors: Raymond N. Johnson, Laura Davis Wiley, Robyn Moroney, Fiona Campbell, Jane Hamilton

2nd Edition

1119786045, 978-1119785996

More Books

Students also viewed these Accounting questions