QUESTION 1 Sully Company's January 1, 2020 balance sheet is as follows: $ 3,000,000 4,000,000 Liabilities & Equity Current liabilities Long-term liabilities $ 2,000,000 6.500,000 Assets Cash, receivables Inventories Equity method investments Land, buildings & equipment 1,000,000 Capital stock 2,000,000 5,500,000 3,500,000 Retained earnings Accumulated other comprehensive loss (400,000) (100.000) Treasury stock Total liabilities & equity Total assets $13.500.000 $13.500.000 On January 1, 2020, Pronto Corporation acquired Sully's assets and liabilities for $10 million in cash. $ 35 million(market value) in stock (100,000 shares whose par value was $10 per share) and a earnout liability of $ 5 million. Attorney and bankers' fees were $ 500,000, while stock registration fees were $ 400,000 Sully's cash and receivables, and current liabilities were reported at values approximating fair value. However, its inventories were overvalued by $2,000,000, and its equity method investments were undervalued by $3,000,000. Its land, buildings & equipment were overvalued by $2,500,000, and its long-term liabilities were undervalued by $500,000. The accountants identified the following possible intangible assets attributed to Sully but not currently recorded on its balance sheet: Fair Value Skilled workforce $7,000,000 Favorable leases 5,000,000 Developed technology 2,000,000 Click Save and Submit to save and submit. Click Save All Answers to save all answers Save All Answd Question Completion Status: equipment 5,500,000 3,500,000 Retained earnings Accumulated other comprehensive loss (400,000) (100.000) Treasury stock Total liabilities & equity Total assets $13.500.000 $13.500.000 On January 1, 2020, Pronto Corporation acquired Sully's assets and liabilities for $10 million in cash. $ 35 million market value) in stock (100,000 shares whose par value was $10 per share) and a camout liability of $ 5 million. Attorney and bankers' fees were $ 500,000, while stock registration fees were $ 400,000. Sully's cash and receivables, and current liabilities were reported at values approximating fair value. However, its Inventories were overvalued by $2,000,000, and its equity method investments were undervalued by $3.000.000. Its land, buildings & equipment were overvalued by $2,500,000, and its long-term liabilities were undervalued by $500,000. The accountants identified the following possible intangible assets attributed to Sully but not currently recorded on its balance sheet: Skilled workforce Favorable leases Developed technology Prospective customer contracts Synergies on future projects Fair Value $7,000,000 5,000,000 2,000,000 1,500,000 3,000,000 Required a Provide the journal entry Pronto makes to record the merger. b. If Pronto had acquired 100% of the stock of Sully, how would your journal entry change? Attach File Browse My Computer Browse Content Collection Chick Save and Submit to save and submit. Click Save All An to save all answers , Mulus, S econds. Question Completion Status: Browse My Computer QUESTION 2 On January 1, 2019, Apple Inc. acquired 30% of the stock of Box for $25,000,000. The book value of Box's stock at the time of purchase was $ 40,000,000. Book values approximated fair values except for a building that was overvalued by $10,000,000 (10 year life, equipment that was undervalued by $ 4,000,000 (2 year fe) and previously unrecorded intangibles of $ 20,000,000 indefinite life. It is now December 31, 2021 Apple sells merchandise to Box at a markup of 20% on cost. Box sells merchandise to Apple at a markup of 25% on cost. Below are the inventory balances : Date Inventory held by Apple Inventory held by Box December 31, 2020 1,000,000 3,000,000 December 31, 2021 1,025,000 3,120,000 Box reports net income of $ 1,300,000 in 2019; $ 1,500,000 in 2020 and $1,600,000 in 2021. Box pays no dividends during this period. Required: a. Calculate equity in net income of Box, reported on Apple's 2021 income statement. b. Calculate the balance in Investment in Box as of December 31, 2021 Attach File Browse My Computer Browse Content Collection QUESTION 3 Portsdown Company bought all of Speedwell Company's voting stock on January 1, 2020 for $125,000. Fair value information on Speedwell's assets and liabilities at the date of acouisition is as follows: Click Save and Submit to save and submit. Click Save All Answers to save all answers Save All Answers Ou Browse My Computer tus QUESTION 3 Portsdown Company bought all of Speedwell Company's voting stock on January 1, 2020 for $125,000. Fair value information on Speedwell's assets and liabilities at the date of acquisition is as follows: Inventories are overvalued by $5,000. Speedwell uses FIFO to report its inventories, and acquisition date inventories were sold in 2020. Property and equipment is overvalued by $20,000. P&E has a 10-year remaining life, straight-line. Liabilities are understated by $500. Assume a 5-year remaining life, and straight-line amortization of any premium/discount. . Previously unreported identifiable intangibles are valued at $35.000. These intangibles have indefinite lives, but testing reveals impairment of $3,000 in 2020. Goodwill reported for this acquisition is not impaired in 2020. Portsdown uses the complete equity method to account for its investment in Speedwell on its own books. Trial balances for both companies at December 31, 2020 are in the consolidation working paper that follows. Portsdown Dr (Cr) $15,000 Speedwell Dr (Cr) $10,000 Consol Dr (Cr) Current assets Property and equipment, net Identifiable intangibles Investment in Speedwell 90.000 60,000 131,790 Goodwill Liabilities (156 600) Capital stock 40,000) (15,000) Retained earnings, Jan. 1 29.000) (23.500) Accumulated OCI. Jan. 1 1.000) (175) Sales revenue 184.000) 750.000) Click Save and Submit to save and submit. Click Save All Answers to save all answers Save All Answers Question Completion Status: Portsdown uses the complete equity method to account for its investment in Speedwell on its own books. Trial balances for both companies at December 31, 2020 are in the consolidation working paper that follows. Portsdown Dr (Cr) $ 15,000 Speedwell Dr (Cr) $10,000 Consol Dr (Cr) Current assets Property and equipment, 90,000 60,000 Identifiable intangibles Investment in Speedwell 131,790 (28,635) (15.000) (23,500) (175) (50,000) - Goodwill Liabilities (156,600) Capital stock 140.000) Retained earnings, Jan. 1 (29,000) Accumulated OCI, Jan. 1 (1.000) Sales revenue (84,000) Equity in Nl of Speedwell 16,750) Equity in OCI of Speedwell (40) Cost of goods sold 55,000 Operating expenses 25.000 Interest expense 750 Other comprehensive income (150) $ 0 35,000 12.000 350 recomomorens (40) 0 $ Required: Provide the consolidated income statement, statement of comprehensive income, and balance sheet for December 31, 2020 Attach File Browse My Computer Browse Content Collection Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers U M U, Mles, 21 seconas. Qu Browse My Computer tus: QUESTION 4 25 F Here is date-of-acquisition information on Fizzy Beverage's assets and liabilities (December 231, 2020): Current assets Property, plant and equipment, net Total assets Book Value $ 2,000 18.000 $ 20,000 Fair Value $ 1,200 8,000 10,000 $ 10,000 2,500 7,400 Liabilities Capital stock Retained earnings Accumulated other comprehensive income Treasury stock Total liabilities and equity 300 (200) $ 20,000 Cola King Company acquires all of the voting stock of Fizzy Beverage, paying the following amounts: Cash consideration to the former owners Fair value of new no-par common stock issued Registration fees on new stock issued, paid in cash Accounting, consulting, and attorney services, paid in cash $40,000 50,000 500 2,000 Fizzy has the following previously unreported intangible assets meeting the criteria for separate recognition as identifiable intangible assets. Cavablan Inn Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Remaining Time: 2 hours, 14 minutes, 18 seconds. Question Completion Status: Fizzy has the following previously unreported intangible assets meeting the criteria for separate recognition as identifiable intangible assets. Favorable lease agreements Developed technology $ 3,000 30,000 Additional liabilities, (whose book value is $0) of $ 12,500 are recognized as a result of the acquisition Provide the consolidated balance sheet on December 31, 2020 given the following individual balances for the parent and the subsidiary: Cola King Dr (C) $ 30,000 f iazy Dr (C) $2,000 Consolidated Dr (Cr) 18.000 600.000 90,000 40.000 Current assets Property, plant & equipment. net Investment in Fizzy Identifiable intangible assets Goodwill Liabilities Capital stock Retained earnings Accumulated other comprehensive income Treasury stock Total (568.000) (10,000) (180,000) (10,000) 12,500) 7.400) (4.000) 2.000 (300) 200 Attach File Browse My Computer Browse Content Collection Click Save and Submit to save and submit. Click Save All Answers to save all answers QUESTION 1 Sully Company's January 1, 2020 balance sheet is as follows: $ 3,000,000 4,000,000 Liabilities & Equity Current liabilities Long-term liabilities $ 2,000,000 6.500,000 Assets Cash, receivables Inventories Equity method investments Land, buildings & equipment 1,000,000 Capital stock 2,000,000 5,500,000 3,500,000 Retained earnings Accumulated other comprehensive loss (400,000) (100.000) Treasury stock Total liabilities & equity Total assets $13.500.000 $13.500.000 On January 1, 2020, Pronto Corporation acquired Sully's assets and liabilities for $10 million in cash. $ 35 million(market value) in stock (100,000 shares whose par value was $10 per share) and a earnout liability of $ 5 million. Attorney and bankers' fees were $ 500,000, while stock registration fees were $ 400,000 Sully's cash and receivables, and current liabilities were reported at values approximating fair value. However, its inventories were overvalued by $2,000,000, and its equity method investments were undervalued by $3,000,000. Its land, buildings & equipment were overvalued by $2,500,000, and its long-term liabilities were undervalued by $500,000. The accountants identified the following possible intangible assets attributed to Sully but not currently recorded on its balance sheet: Fair Value Skilled workforce $7,000,000 Favorable leases 5,000,000 Developed technology 2,000,000 Click Save and Submit to save and submit. Click Save All Answers to save all answers Save All Answd Question Completion Status: equipment 5,500,000 3,500,000 Retained earnings Accumulated other comprehensive loss (400,000) (100.000) Treasury stock Total liabilities & equity Total assets $13.500.000 $13.500.000 On January 1, 2020, Pronto Corporation acquired Sully's assets and liabilities for $10 million in cash. $ 35 million market value) in stock (100,000 shares whose par value was $10 per share) and a camout liability of $ 5 million. Attorney and bankers' fees were $ 500,000, while stock registration fees were $ 400,000. Sully's cash and receivables, and current liabilities were reported at values approximating fair value. However, its Inventories were overvalued by $2,000,000, and its equity method investments were undervalued by $3.000.000. Its land, buildings & equipment were overvalued by $2,500,000, and its long-term liabilities were undervalued by $500,000. The accountants identified the following possible intangible assets attributed to Sully but not currently recorded on its balance sheet: Skilled workforce Favorable leases Developed technology Prospective customer contracts Synergies on future projects Fair Value $7,000,000 5,000,000 2,000,000 1,500,000 3,000,000 Required a Provide the journal entry Pronto makes to record the merger. b. If Pronto had acquired 100% of the stock of Sully, how would your journal entry change? Attach File Browse My Computer Browse Content Collection Chick Save and Submit to save and submit. Click Save All An to save all answers , Mulus, S econds. Question Completion Status: Browse My Computer QUESTION 2 On January 1, 2019, Apple Inc. acquired 30% of the stock of Box for $25,000,000. The book value of Box's stock at the time of purchase was $ 40,000,000. Book values approximated fair values except for a building that was overvalued by $10,000,000 (10 year life, equipment that was undervalued by $ 4,000,000 (2 year fe) and previously unrecorded intangibles of $ 20,000,000 indefinite life. It is now December 31, 2021 Apple sells merchandise to Box at a markup of 20% on cost. Box sells merchandise to Apple at a markup of 25% on cost. Below are the inventory balances : Date Inventory held by Apple Inventory held by Box December 31, 2020 1,000,000 3,000,000 December 31, 2021 1,025,000 3,120,000 Box reports net income of $ 1,300,000 in 2019; $ 1,500,000 in 2020 and $1,600,000 in 2021. Box pays no dividends during this period. Required: a. Calculate equity in net income of Box, reported on Apple's 2021 income statement. b. Calculate the balance in Investment in Box as of December 31, 2021 Attach File Browse My Computer Browse Content Collection QUESTION 3 Portsdown Company bought all of Speedwell Company's voting stock on January 1, 2020 for $125,000. Fair value information on Speedwell's assets and liabilities at the date of acouisition is as follows: Click Save and Submit to save and submit. Click Save All Answers to save all answers Save All Answers Ou Browse My Computer tus QUESTION 3 Portsdown Company bought all of Speedwell Company's voting stock on January 1, 2020 for $125,000. Fair value information on Speedwell's assets and liabilities at the date of acquisition is as follows: Inventories are overvalued by $5,000. Speedwell uses FIFO to report its inventories, and acquisition date inventories were sold in 2020. Property and equipment is overvalued by $20,000. P&E has a 10-year remaining life, straight-line. Liabilities are understated by $500. Assume a 5-year remaining life, and straight-line amortization of any premium/discount. . Previously unreported identifiable intangibles are valued at $35.000. These intangibles have indefinite lives, but testing reveals impairment of $3,000 in 2020. Goodwill reported for this acquisition is not impaired in 2020. Portsdown uses the complete equity method to account for its investment in Speedwell on its own books. Trial balances for both companies at December 31, 2020 are in the consolidation working paper that follows. Portsdown Dr (Cr) $15,000 Speedwell Dr (Cr) $10,000 Consol Dr (Cr) Current assets Property and equipment, net Identifiable intangibles Investment in Speedwell 90.000 60,000 131,790 Goodwill Liabilities (156 600) Capital stock 40,000) (15,000) Retained earnings, Jan. 1 29.000) (23.500) Accumulated OCI. Jan. 1 1.000) (175) Sales revenue 184.000) 750.000) Click Save and Submit to save and submit. Click Save All Answers to save all answers Save All Answers Question Completion Status: Portsdown uses the complete equity method to account for its investment in Speedwell on its own books. Trial balances for both companies at December 31, 2020 are in the consolidation working paper that follows. Portsdown Dr (Cr) $ 15,000 Speedwell Dr (Cr) $10,000 Consol Dr (Cr) Current assets Property and equipment, 90,000 60,000 Identifiable intangibles Investment in Speedwell 131,790 (28,635) (15.000) (23,500) (175) (50,000) - Goodwill Liabilities (156,600) Capital stock 140.000) Retained earnings, Jan. 1 (29,000) Accumulated OCI, Jan. 1 (1.000) Sales revenue (84,000) Equity in Nl of Speedwell 16,750) Equity in OCI of Speedwell (40) Cost of goods sold 55,000 Operating expenses 25.000 Interest expense 750 Other comprehensive income (150) $ 0 35,000 12.000 350 recomomorens (40) 0 $ Required: Provide the consolidated income statement, statement of comprehensive income, and balance sheet for December 31, 2020 Attach File Browse My Computer Browse Content Collection Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers U M U, Mles, 21 seconas. Qu Browse My Computer tus: QUESTION 4 25 F Here is date-of-acquisition information on Fizzy Beverage's assets and liabilities (December 231, 2020): Current assets Property, plant and equipment, net Total assets Book Value $ 2,000 18.000 $ 20,000 Fair Value $ 1,200 8,000 10,000 $ 10,000 2,500 7,400 Liabilities Capital stock Retained earnings Accumulated other comprehensive income Treasury stock Total liabilities and equity 300 (200) $ 20,000 Cola King Company acquires all of the voting stock of Fizzy Beverage, paying the following amounts: Cash consideration to the former owners Fair value of new no-par common stock issued Registration fees on new stock issued, paid in cash Accounting, consulting, and attorney services, paid in cash $40,000 50,000 500 2,000 Fizzy has the following previously unreported intangible assets meeting the criteria for separate recognition as identifiable intangible assets. Cavablan Inn Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Remaining Time: 2 hours, 14 minutes, 18 seconds. Question Completion Status: Fizzy has the following previously unreported intangible assets meeting the criteria for separate recognition as identifiable intangible assets. Favorable lease agreements Developed technology $ 3,000 30,000 Additional liabilities, (whose book value is $0) of $ 12,500 are recognized as a result of the acquisition Provide the consolidated balance sheet on December 31, 2020 given the following individual balances for the parent and the subsidiary: Cola King Dr (C) $ 30,000 f iazy Dr (C) $2,000 Consolidated Dr (Cr) 18.000 600.000 90,000 40.000 Current assets Property, plant & equipment. net Investment in Fizzy Identifiable intangible assets Goodwill Liabilities Capital stock Retained earnings Accumulated other comprehensive income Treasury stock Total (568.000) (10,000) (180,000) (10,000) 12,500) 7.400) (4.000) 2.000 (300) 200 Attach File Browse My Computer Browse Content Collection Click Save and Submit to save and submit. Click Save All Answers to save all answers