On January 1, 2017, Perth Company Acquired all of Sharbot Companys voting stock for $16 million in cash.

P4.8, need a & b answered

In your answers below. Show all amounts in thousand pany acquired a new business unit in a merger Allocation of the acquisition cost resulted in tat value 3. The internet domain name is estimated to have undiscounted future cash flows of $1.000.000 and US Cello Global Services $25 100 US Car Dealer. 10.30. It Vent in Sharbot ulate the good for this acquisition and its allocation to the four reporting units at a LO 2, 3 P4.7 Intangible Assets and Goodwill: Amortization and Impairment In early 2018, Bowen Coat Impairment reviews ar the end of 2018 and 2019 did not identify any impairment losses. After the ness suffered a downturn during 2030, the year-end impairment review yielded the following information 1. Customer lists are estimated to have indiscounted future cash flows of $250.000 and discounted 2. Developed technology is estimated to have undiscounted future cash flows of $500.000 and dis in thousands) Mobile Current assets ..... Broadband Plant assets, net. Intangibles.......... 33 Capital stock .... Retained earnings, Jan. 1 Sales revenue...... Equity in net income of Shaxbot Cost of sales...... Operating expenses Total by Pero le faire for all reating mil. On December 31 et fra vest a goodwill impairment in millions) Networks 59 92 50 Book of unt........... laporan below show a) umbers in millions Ryan Required . Calculate any goodwill impairment for 2120, following U.S. GAAP Estimated life b. Fair value assigned as follows: 5 years 10 years Indefinite Indefinite $ 500,000 800,000 1,300,000 6,200,000 P4.9 Prepare the working paper to consolidate Penh Prepare the consolidated income statement for 31, 2020, in good form. Consolidation Working Paper, Three Yea tional Technology Inc. (ITI) acquired all of the on June 30, 2018, for $110 million in cash and the third year with a fair value of $2 million as the earnings contingency declined to a fair value of Both companies have a June 30 year-end. At million, as follows (in millions): Intangible asset Customers Developed technology Internet domain name Goodwil..... The goodwill is assigned entry to the acquired business ont future cash flows of $180,000 Common stock, par Additional paid-in capital Retained earnings (deficit).............. Accumulated other comprehensive income Treasury stock Total counted future cash flows of $420,000 discounted future cash flows of S750,000. Qualitative assessment indicates that it is more likely the 4. Because of the economic downturn, Bowen bypassed qualitative assessment of the business unit The acquired business unit has a fair value of $17,000,000, and a carrying amount of $18,500,000 Required Determine Bowen's amortization expense and impairment write-offs for 2020, following U.S. GAAP. LO 1, 2, 4 P4.8 Consolidation After Four Years On January 1, 2017, Perth Company acquired all of Sharbot Com- pany's voting stock for $16 million in cash. Some of Sharbot's identifiable assets at the date of acquisition had fair values that were different from reported values, as follows: At the acquisition date, GOC's invento ment was overvalued by $60 million million, and its long-term debt was identifiable intangibles: $5 million of ports its inventory using the LIFO remaining lives of its assets and liat Plant assets, net (20-year remaining life, straight-line) ...... Identifiable intangibles (5-year remaining life, straight-line). Sharbot's total shareholders equity at January 1, 2017, was $4 million. It is now December 31, 2020 (four years later). Cumulative impairment for the goodwill recognized on this acquisition, to the beginning of MON Ser- Chapter 4 . Consolidated Financial Statements subsequent to Acquisition 177 (in millions) Fair value Book value $11 0 10 2020.is $2 million. Goodwill impairment for 2020 is 80.5 million. Perth uses the complete equity method to account for its investment in Sharbot on its own books. December 31, 2020 trial balances for Perth and Sharbot appear below. (in thousands) Perth Company Dr (Cr) Sharbot Company Dr (Cr) $ 5,000 34,800 $ 2,500 28,000 Current assets Plant assets, net. Intangibles .... Investment in Sharbot Liabilities. Capital stock Retained eamings. Jan. 1. Sales revenue..... Equity in net income of Sharbot. Cost of sales. Operating expenses. Total. 23,600 122.000) (15,000) (25.000) 125,000) (400) 20,000 4,000 - (10,000) 12,000) (16,000) (14,000) 8,000 3,500 0 $ 0 In your answers below, show all amounts in thousands. Required a. Prepare the working paper to consolidate Perth and Sharbot's trial balances at December 31, 2020. b. Prepare the consolidated income statement for 2020, and the consolidated balance sheet at December 31, 2020, in good form. P4.9 Consolidation Working Paper, Three Years After Acquisition (see related P3.2) Interna- tional Technology Inc. (ITI) acquired all of the voting stock of Global Outsourcing Corporation (GOC) on June 30, 2018, for $110 million in cash and stock, plus an earnings contingency payable at the end of the third year with a fair value of $2 million at the date of acquisition. Within the measurement period, the earnings contingency declined to a fair value of zero and the acquisition price was appropriately adjusted. Both companies have a June 30 year-end. At June 30, 2018, GOC's total shareholders' equity was $40 million, as follows (in millions): LO 1, 2, 4 MC x HHH Common stock, par Additional paid-in capital Retained earnings (deficit). Accumulated other comprehensive income. Treasury stock.. Total $ 4 60 (25) 3 (2) $40 At the acquisition date, GOC's inventories were undervalued by $5 million, its property, plant and equip- ment was overvalued by $60 million, its reported patents and trademarks were undervalued by $10 undervalued by $3 million. GOC also had previously unreported con LO 1, 2, 4 Determine Bowen's amortization expense and impairment write-offs for 2020, following U.S. GAAP. P4.8 Consolidation After Four Years On January 1, 2017, Perth Company acquired all of Sharbot Com- pany's voting stock for $16 million in cash. Some of Sharbot's identifiable assets at the date of acquisition had fair values that were different from reported values, as follows: Chapter 4 Consolidated Financial Statements Subsequent to Acquisition 177 Fair value Book value (in millions) Plant assets, net (20-year remaining life, straight-line) Identifiable intangibles (5-year remaining life, straight-line). $ 3 10 $11 0 Sharbot's total shareholders' equity at January 1, 2017, was $4 million. It is now December 31, 2020 (four years later). Cumulative impairment for the goodwill recognized on this acquisition to the beginning of 2020, is $2 million. Goodwill impairment for 2020 is $0.5 million. Perth uses the complete equity method to account for its investment in Sharbot on its own books. December 31, 2020 trial balances for Perth and Sharbot appear below, Perth Company Dr (CT) $ 5,000 34,800 Sharbot Company Dr (Cr) (in thousands) $ 2,500 28,000 Current assets Plant assets, net. Intangibles Investment in Sharbot Liabilities... Capital stock Retained earnings, Jan. 1. Sales revenue... Equity in net income of Sharbot. Cost of sales..... Operating expenses....... Total.. 23,600 (22,000) (15,000) (25,000) (25,000) (400) 20.000 4,000 $ 0 (10,000) (2,000) (16,000) (14,000) 8.000 3,500 $ 0 In your answers below, show all amounts in thousands Required a. Prepare the working paper to consolidate Perth and Sharbot's trial balances at December 31, 2020. b. Prepare the consolidated income statement for 2020, and the consolidated balance sheet at December 31, 2020, in good form. Consolidation Working Paper, Three Years After Acquisition (see related P3.2) Interna- P4.9 LO 1, 2,4 In your answers below. Show all amounts in thousand pany acquired a new business unit in a merger Allocation of the acquisition cost resulted in tat value 3. The internet domain name is estimated to have undiscounted future cash flows of $1.000.000 and US Cello Global Services $25 100 US Car Dealer. 10.30. It Vent in Sharbot ulate the good for this acquisition and its allocation to the four reporting units at a LO 2, 3 P4.7 Intangible Assets and Goodwill: Amortization and Impairment In early 2018, Bowen Coat Impairment reviews ar the end of 2018 and 2019 did not identify any impairment losses. After the ness suffered a downturn during 2030, the year-end impairment review yielded the following information 1. Customer lists are estimated to have indiscounted future cash flows of $250.000 and discounted 2. Developed technology is estimated to have undiscounted future cash flows of $500.000 and dis in thousands) Mobile Current assets ..... Broadband Plant assets, net. Intangibles.......... 33 Capital stock .... Retained earnings, Jan. 1 Sales revenue...... Equity in net income of Shaxbot Cost of sales...... Operating expenses Total by Pero le faire for all reating mil. On December 31 et fra vest a goodwill impairment in millions) Networks 59 92 50 Book of unt........... laporan below show a) umbers in millions Ryan Required . Calculate any goodwill impairment for 2120, following U.S. GAAP Estimated life b. Fair value assigned as follows: 5 years 10 years Indefinite Indefinite $ 500,000 800,000 1,300,000 6,200,000 P4.9 Prepare the working paper to consolidate Penh Prepare the consolidated income statement for 31, 2020, in good form. Consolidation Working Paper, Three Yea tional Technology Inc. (ITI) acquired all of the on June 30, 2018, for $110 million in cash and the third year with a fair value of $2 million as the earnings contingency declined to a fair value of Both companies have a June 30 year-end. At million, as follows (in millions): Intangible asset Customers Developed technology Internet domain name Goodwil..... The goodwill is assigned entry to the acquired business ont future cash flows of $180,000 Common stock, par Additional paid-in capital Retained earnings (deficit).............. Accumulated other comprehensive income Treasury stock Total counted future cash flows of $420,000 discounted future cash flows of S750,000. Qualitative assessment indicates that it is more likely the 4. Because of the economic downturn, Bowen bypassed qualitative assessment of the business unit The acquired business unit has a fair value of $17,000,000, and a carrying amount of $18,500,000 Required Determine Bowen's amortization expense and impairment write-offs for 2020, following U.S. GAAP. LO 1, 2, 4 P4.8 Consolidation After Four Years On January 1, 2017, Perth Company acquired all of Sharbot Com- pany's voting stock for $16 million in cash. Some of Sharbot's identifiable assets at the date of acquisition had fair values that were different from reported values, as follows: At the acquisition date, GOC's invento ment was overvalued by $60 million million, and its long-term debt was identifiable intangibles: $5 million of ports its inventory using the LIFO remaining lives of its assets and liat Plant assets, net (20-year remaining life, straight-line) ...... Identifiable intangibles (5-year remaining life, straight-line). Sharbot's total shareholders equity at January 1, 2017, was $4 million. It is now December 31, 2020 (four years later). Cumulative impairment for the goodwill recognized on this acquisition, to the beginning of MON Ser- Chapter 4 . Consolidated Financial Statements subsequent to Acquisition 177 (in millions) Fair value Book value $11 0 10 2020.is $2 million. Goodwill impairment for 2020 is 80.5 million. Perth uses the complete equity method to account for its investment in Sharbot on its own books. December 31, 2020 trial balances for Perth and Sharbot appear below. (in thousands) Perth Company Dr (Cr) Sharbot Company Dr (Cr) $ 5,000 34,800 $ 2,500 28,000 Current assets Plant assets, net. Intangibles .... Investment in Sharbot Liabilities. Capital stock Retained eamings. Jan. 1. Sales revenue..... Equity in net income of Sharbot. Cost of sales. Operating expenses. Total. 23,600 122.000) (15,000) (25.000) 125,000) (400) 20,000 4,000 - (10,000) 12,000) (16,000) (14,000) 8,000 3,500 0 $ 0 In your answers below, show all amounts in thousands. Required a. Prepare the working paper to consolidate Perth and Sharbot's trial balances at December 31, 2020. b. Prepare the consolidated income statement for 2020, and the consolidated balance sheet at December 31, 2020, in good form. P4.9 Consolidation Working Paper, Three Years After Acquisition (see related P3.2) Interna- tional Technology Inc. (ITI) acquired all of the voting stock of Global Outsourcing Corporation (GOC) on June 30, 2018, for $110 million in cash and stock, plus an earnings contingency payable at the end of the third year with a fair value of $2 million at the date of acquisition. Within the measurement period, the earnings contingency declined to a fair value of zero and the acquisition price was appropriately adjusted. Both companies have a June 30 year-end. At June 30, 2018, GOC's total shareholders' equity was $40 million, as follows (in millions): LO 1, 2, 4 MC x HHH Common stock, par Additional paid-in capital Retained earnings (deficit). Accumulated other comprehensive income. Treasury stock.. Total $ 4 60 (25) 3 (2) $40 At the acquisition date, GOC's inventories were undervalued by $5 million, its property, plant and equip- ment was overvalued by $60 million, its reported patents and trademarks were undervalued by $10 undervalued by $3 million. GOC also had previously unreported con LO 1, 2, 4 Determine Bowen's amortization expense and impairment write-offs for 2020, following U.S. GAAP. P4.8 Consolidation After Four Years On January 1, 2017, Perth Company acquired all of Sharbot Com- pany's voting stock for $16 million in cash. Some of Sharbot's identifiable assets at the date of acquisition had fair values that were different from reported values, as follows: Chapter 4 Consolidated Financial Statements Subsequent to Acquisition 177 Fair value Book value (in millions) Plant assets, net (20-year remaining life, straight-line) Identifiable intangibles (5-year remaining life, straight-line). $ 3 10 $11 0 Sharbot's total shareholders' equity at January 1, 2017, was $4 million. It is now December 31, 2020 (four years later). Cumulative impairment for the goodwill recognized on this acquisition to the beginning of 2020, is $2 million. Goodwill impairment for 2020 is $0.5 million. Perth uses the complete equity method to account for its investment in Sharbot on its own books. December 31, 2020 trial balances for Perth and Sharbot appear below, Perth Company Dr (CT) $ 5,000 34,800 Sharbot Company Dr (Cr) (in thousands) $ 2,500 28,000 Current assets Plant assets, net. Intangibles Investment in Sharbot Liabilities... Capital stock Retained earnings, Jan. 1. Sales revenue... Equity in net income of Sharbot. Cost of sales..... Operating expenses....... Total.. 23,600 (22,000) (15,000) (25,000) (25,000) (400) 20.000 4,000 $ 0 (10,000) (2,000) (16,000) (14,000) 8.000 3,500 $ 0 In your answers below, show all amounts in thousands Required a. Prepare the working paper to consolidate Perth and Sharbot's trial balances at December 31, 2020. b. Prepare the consolidated income statement for 2020, and the consolidated balance sheet at December 31, 2020, in good form. Consolidation Working Paper, Three Years After Acquisition (see related P3.2) Interna- P4.9 LO 1, 2,4