Problem 8-9 (LO 5) Worksheet, purchase in blocks, subsidiary stock dividend, subsidiary purchase of parent shares, machinery sale, merchandise. On January 1, 2017, Heckert Company purchases a controlling interest in Aker Company. The following information is available:
Problem 8-9 (LO 5) Worksheet, purchase in blocks, subsidiary stock dividend, subsidiary purchase of parent shares, machinery sale, merchandise. On January 1, 2017, Heckert Company purchases a controlling interest in Aker Company. The following information is available a. Heckert Company purchases 1,600 shares of Aker Company outstanding stock on January 1, 2016, for $48,000 and purchases an additional 1,400 shares on January 1,2017, for $51,800 b. An analysis of the stockholders' equity accounts at December 31, 2016, and 2015, follows: Heckert Company December 31 Aker Company December 31 2016 2015 2016 2015 Common stock ($5 par) Paid- in capital in excess of par.. Retained eamings 20,000 20,000 10,000 82,000 36,000 36,000 10,000 Total 564,000 $471,000 $142,000 $112,000 c. Aker Company's marketable securities consist of 1,500 shares of Heckert Company stock purchased on June 15, 2017, in the open market for $18,000. The securities are purchased as a temporary investment and are sold on January 15, 2018, for $25,000. d. On December 10, 2017, Heckert y declares a cash dividend of $0.50 per share, pay- able January 10, 2018, to stockholders of record on December 20, 2017. Aker Company pays a cash dividend of $1 per share on June 30, 2017, and distributes a 10% stock dividend on September 30, 2017. The stock is selling for $15 per share ex-dividend on September 30, 2017 Aker Company pays no dividends in 2016. e. Aker Company sells machinery, with a book value of $4,000 and a remaining life of five years, to Heckert Company for $4,800on December 31, 2017. The gain on the sale is cred- ited to the other income account. f. Aker Company includes all intercompany receivables and payables in its trade accounts receivable and trade accounts payable accounts. g. During 2017, the following intercompany sales are made: Included in Purchaser's Inventory at December 31, 2017 $24,300 18,000 $42,300 Net Sales $182,000 Heckert Company sells merchandise to Aker Company at cost. Aker Company sells mer- chandise to Heckert at the regular selling price to make a normal profit margin of 30%. There were no intercompany sales in prior years
