QUESTION 11 Black Company acquired 90% of White Inc. on January 31, 2020 in exchange for cash. The book value of White's individual assets and liabilities approximated their acquisition- date fair values. On the date of acquisition, White reported the following: Cash $ 500,000 Current Liabilities $ 230,000 Inventory 150.000 Plant Assets (net) 320,000 Common Stock 200,000 Land 700.000 Retained Earnings 1.240.000 Total Liabilities & Equity 5 1.670.000 Total Asses $1,670,000 During the year White Inc. reported $415,000 in net income and declared $20,000 in dividends. Black Company reported $610,000 in net income and declared $35,000 in dividends. Black accounts for their investment using the equity method. REQUIRED: 1. What journal entry will Black make on the date of acquisition to record the investment in White Inc.? NOTE: Enter the account CODE as the name of the account. No $'s. Include the comma for the dollar amount, if applicable. GENERAL JOURNAL [a] [b] (c) QUESTION #15 On January 1, 2020, Jonathan Corporation acquired 90 percent of Pamela Company's voting stock, at underlying book value. The fair value of the noncontrolling interest was equal to 10 percent of the book value of Pamela at that date. Jonathan uses the equity method in accounting for its ownership of Pamela. On December 31, 2020, the trial balances of the two companies are as follows: Jonathan Corporation Company Debit Credit Dehit Credit $200,000 300,000.00 $120,000 225,000.00 139.500,00 30,000.00 25,000.00 Current Assets Depreciable Assets Investment in Pamela Company Depreciation Expense Other Expenses Dividends declared Accumulated Depreciation Current Liabilities Long-term Date 100,000.00 60,000.00 30,000.00 10,000.00 60,000.00 75,000.00 25,000.00 62.000.00 75.000.00 90,000.00 75,000.00 Common Stock 100,000.00 60.000.00 APIC 0.00 65,000.00 Retained earnings Sales Income from Pamela 120,000.00 300,000.00 110,000.00 22.500.00 Totals $799,500 $799.500 S440,000 $440,000 REQUIRED: Provide answers to the following. Be sure to strictly observe the following rules when inputting your answers: (a) All dollar amounts much include a $. b) All dollar amounts much include a comma, if applicable. Part 1: Compute the following: 1. The balance in Investment in Pamela immediately after the acquisition. [a] 2. The equation (S) to determine the December 31, 2020 balance in Investment in Pamela is [b] plus [c] minus [d] equals [e]. as follows: Current Assets $200,000 $120.000 Depreciable Devis Puncte Depreciation Expense 119 HD Accuted Depreciation Currentes Lente Del Cock 100,000.00 APC 120,000.00 500.00 11000000 In from Puncte 22.500.00 5799.00 5799.00 REQUIRED Provide answers to the following. Be sure to strictly observe the following rules when inputting your answers: (a) All dollar amounts much include a S. (b) All dollar amounts much include a comma, if applicable. Part 1: Compute the following: 1. The balance in Investment in Pamela immediately after the acquisition. [a] 2. The equation (S) to determine the December 31, 2020 balance in Investment in Pamela is [b] plus [c] minus [d] cquals [e]. Part 2: What amount would be reported on the consolidate financial statements for Jonathan Corporation on December 31, 2020? 1. Consolidated Net Income [0 2. NCI interest in Net Income of Pamela fel 3. Controlling interest in Net Income of Pamela [h] 4. Total Assets to 5. Total liabilities 6. Common Stock [k] 7. APICU 8. Retained earnings, December 31 (m) 9. NCI in Net Assets of Pamela (n) Part 3: Present formal 2020 consolidated financial statements for Jonathan Corporation
