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Please Use ONE of these methods :Equity Method, Initial Value or Partial Equity method. 100% Problems 4 and 5 Proceed Company acquired of the common
Please Use ONE of these methods :Equity Method, Initial Value or Partial Equity method.
100% Problems 4 and 5 Proceed Company acquired of the common stock of Stop Company on January 1, year one, for $600,000 On that date, Stop had the following trial balance: account debit credit Additional paid in capital $100,000 Building (12-year life) $250,000 Common stock 170,000 Current assets 180,000 Equipment (6-yr life) 160,000 Land 110,000 Liabilities (due in 4 years) 310,000 Retained earnings 1/year 1 120,000 Totals $700,000 $700,000 During year one, Stop reported net income of During year one, Stop paid dividends of $70,000 $30,000 During year two, Stop reported net income of During year two, Stop paid dividends of $80,000 $40,000 On January 1, year one, fair values were: Land $134,000 Building $286,000 Equipment $196,000 There was no impairment of any goodwill arising from the acquisition. Please indicate clearly which method you choose for Proceed to use to account for its acquisition of Stop Company. Problem 4. Use the data for the Proceed Company acquisition of the Stop Company to prepare the consolidation worksheet entries for December 31 of year one. Problem 5. Use the data for the Proceed Company acquisition of the Stop Company to prepare the consolidation worksheet entries for December 31 of year two. 100% Problems 4 and 5 Proceed Company acquired of the common stock of Stop Company on January 1, year one, for $600,000 On that date, Stop had the following trial balance: account debit credit Additional paid in capital $100,000 Building (12-year life) $250,000 Common stock 170,000 Current assets 180,000 Equipment (6-yr life) 160,000 Land 110,000 Liabilities (due in 4 years) 310,000 Retained earnings 1/year 1 120,000 Totals $700,000 $700,000 During year one, Stop reported net income of During year one, Stop paid dividends of $70,000 $30,000 During year two, Stop reported net income of During year two, Stop paid dividends of $80,000 $40,000 On January 1, year one, fair values were: Land $134,000 Building $286,000 Equipment $196,000 There was no impairment of any goodwill arising from the acquisition. Please indicate clearly which method you choose for Proceed to use to account for its acquisition of Stop Company. Problem 4. Use the data for the Proceed Company acquisition of the Stop Company to prepare the consolidation worksheet entries for December 31 of year one. Problem 5. Use the data for the Proceed Company acquisition of the Stop Company to prepare the consolidation worksheet entries for December 31 of year twoStep by Step Solution
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