Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sanjuana Corporation paid $800,000 on January 1, 2021 for a 50% interest in Santurce Inc. On January 1. 2020, the book value of Sand's stockholders'

image text in transcribed
Sanjuana Corporation paid $800,000 on January 1, 2021 for a 50% interest in Santurce Inc. On January 1. 2020, the book value of Sand's stockholders' equity consisted of $450,000 of common stock and $440,000 of retained earnings. All the excess purchase cost over book value acquired was attributable: 35% an equipment (overvalue) with an estimated life of 10-years. 15% a building (undervalue) with an estimate life of 15-years. 50% remainder for goodwill Sanjuana Corporation used the equity method. Information of dividends and net income for 2021 of Santurce Inc. it is presented below. June 30, 2021 - dividend Sep 30, 2021 - dividend Dec 31, 2021 - dividend Dec 31, 2021 - net income $20.000 $25,000 $35,000 $900,000 Using the working paper: 1. Present the analysis of combination and prepare the journal entries for acquired investment, received dividends, received net income and amortization of equipment and building 2. Calculate the Sanjuana's income from Santurce Inc. for 2021. 3. Determine the balance of Sanjuana's Investment in Santurce Inc. account on December 31, 2021. 4. Assume that Sanjuana's net income for 2021 consists of $1,000,000 sales and expenses for $712,000 and its investment income from Sand Inc. Prepare the Income Statement for Sanjuana Corporation for December 31, 2021. Sanjuana Corporation paid $800,000 on January 1, 2021 for a 50% interest in Santurce Inc. On January 1. 2020, the book value of Sand's stockholders' equity consisted of $450,000 of common stock and $440,000 of retained earnings. All the excess purchase cost over book value acquired was attributable: 35% an equipment (overvalue) with an estimated life of 10-years. 15% a building (undervalue) with an estimate life of 15-years. 50% remainder for goodwill Sanjuana Corporation used the equity method. Information of dividends and net income for 2021 of Santurce Inc. it is presented below. June 30, 2021 - dividend Sep 30, 2021 - dividend Dec 31, 2021 - dividend Dec 31, 2021 - net income $20.000 $25,000 $35,000 $900,000 Using the working paper: 1. Present the analysis of combination and prepare the journal entries for acquired investment, received dividends, received net income and amortization of equipment and building 2. Calculate the Sanjuana's income from Santurce Inc. for 2021. 3. Determine the balance of Sanjuana's Investment in Santurce Inc. account on December 31, 2021. 4. Assume that Sanjuana's net income for 2021 consists of $1,000,000 sales and expenses for $712,000 and its investment income from Sand Inc. Prepare the Income Statement for Sanjuana Corporation for December 31, 2021

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Using QuickBooks Accountant 2018 For Accounting

Authors: Glenn Owen

16th Edition

0357042085, 9780357042083

More Books

Students also viewed these Accounting questions

Question

Describe the steps in creating a use case diagram.

Answered: 1 week ago

Question

Explain how to reward individual and team performance.

Answered: 1 week ago