Winter Inc, purchased 80% of the stock of Spring on January 1, 2020, for $1, 200,000. Winter did not pay a control premium. At the
Winter Inc, purchased 80% of the stock of Spring on January 1, 2020, for $1, 200,000. Winter did not pay a control premium.
At the date of acquisition Spring reported the following balance sheet amounts
Assets
Liabilities & Equity
Cash$360,000
Accounts Payable$800,000
Receivables
240,000
Total liabilities
800,000
Land
180,000
Common Stock
300,000
Buildings (net)
920,000
Retained earnings
600,000
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Total Equity
900,000
Total Assets$850,000
Total Liabilities & Stockholders' Equity$900,000
Spring 's land had a fair value of $4800,000 on January 1,2020.All of the other identifiable assets and liabilities of Spring had fair values equal to their book values.
Winter Inc, had the following select balances on its separate balance sheet at date of acquisition
Land: $424,000
Goodwill: none
Common stock: $1,280,000
1. What will Winter record as Investment in Spring on its separate financial statements prepared immediately after the acquisition?
Find the amount in the balance sheet accounts in the CONSOLIDATED financial statements that are prepared on the date of acquisition.
2. Land account?
3. Goodwill account?
4. Common stock account?
5. Investment in Spring account?
6. Noncontrolling interest account
4. Next let's assume that the Japanese resident uses his $ 1000 to purchase a computer from a store in the US and then brings it back to Japan. The transaction can be recorded by noting the following (for the US): (a) +$1.000 Financial account, $1.000 Capital account. (b) +$1.000 Financial account, -$1.000 Current account. (0) +$1.000 Current account, -$1.000 Financial account. (d) +$1.000 Financial account, $1.000 Financial account. (e) +$1.000 Capital account, -$1.000 Financial account. A proposed project has fixed costs of $30,000 per year. The operating cash ow at 10,400 units is $121400. Ignore the effect of taxes. a. What is the degree of operating leverage? {Do not round Intermediate calculations and round your answer to 3 decimal places. 13.9., 31151.] b. If units sold rise from 10,400 to 11.100. what will be the new operating cash ow? [Do not round Intermediate calculations and round your answer to 2 decimal places. e.g., 32.15.} c. What is the new degree of operating leverage? {Do not round Intermediate calculations and round your answer to 3 decimal places. e.g., 31151.} 3. A US company pays interest for $30,000 matured on its bonds held by a German investor. The payment is in Dollars. The German investor sells the Dollars to the European Central Bank (official institution). How do you record this transaction in the US Balance of Payments? Current Account $30,000 Financial Account (Non-official) (a) Financial Account (Official) $30.000 Current Account Financial Account (Non-official) (b) $30.000 $30,000 Financial Account (Official) Current Account $30.000 Financial Account (Non-official) (c) Financial Account (Official) $30,000 Current Account Financial Account (Non-official) (d) $30,000 Financial Account (Official) $30,000 3Harry buys a toaster. Sally, who is visiting Harry, uses the toaster. Unfortunately, the toaster explodes and Sally is severely burned. Sally sues the manufacturer of the toaster. More than likely Sally will () a. prevail because she is in privity of contract with the manufacturer. [) b. prevail because she is not in privity of contract with the manufacturer. O c. prevail despite the fact she is not in privity of contract. O d. prevail because she is not in privity of contract with the manufacturer