Exam 3: A: Consolidations - Subsequent to the Date of Acquisition

Hanson Co.acquired all of the common stock of Roberts Inc.on January 1, 2017, transferring consideration in an amount slightly more than the fair value of Roberts' net assets.At that time, Roberts had buildings with a twenty-year useful life, a book value of $600,000, and a fair value of $696,000.On December 31, 2018, Roberts had buildings with a book value of $570,000 and a fair value of $648,000.On that date, Hanson had buildings with a book value of $1,878,000 and a fair value of $2,160,000. Required: What amount should be shown for buildings on the consolidated balance sheet dated December 31, 2018?

Assuming Rhine generates cash flow from operations of $27,200 in 2017, how will Harrison record the $16,500 payment of cash on April 15, 2018 in satisfaction of its contingent obligation?

Yules Co.acquired Noel Co.and applied the acquisition method.Yules decided to use the partial equity method to account for the investment.The current balance in the investment account is $416,000.Describe in words how this balance was derived.

Which of the following is not an example of an intangible asset?

When consolidating a subsidiary under the equity method, which of the following statements is true with regard to the subsidiary subsequent to the year of acquisition?

Compare the differences in accounting treatment for goodwill between U.S.GAAP and IFRS.

On January 1, 2016, Rand Corp.issued shares of its common stock to acquire all of the outstanding common stock of Spaulding Inc.Spaulding's book value was only $140,000 at the time, but Rand issued 12,000 shares having a par value of $1 per share and a fair value of $20 per share.Rand was willing to convey these shares because it felt that buildings (ten-year life) were undervalued on Spaulding's records by $60,000 while equipment (five-year life) was undervalued by $25,000.Any consideration transferred over fair value of identified net assets acquired is assigned to goodwill. Following are the individual financial records for these two companies for the year ended December 31, 2019. Required: Prepare a consolidation worksheet for this business combination.

How does the partial equity method differ from the equity method?

If the parent's net income reflected use of the equity method, what were the consolidated retained earnings on December 31, 2018?

Under the partial equity method of accounting for an investment,

According to GAAP regarding amortization of goodwill, which of the following statements is true?

If Goehler applies the equity method in accounting for Kenneth, what is the consolidated balance for the Equipment account as of December 31, 2018?

If Goehler applies the partial equity method in accounting for Kenneth, what is the consolidated balance for the Equipment account as of December 31, 2018?

What balance would Jaynes' Investment in Aaron Co.account have shown on December 31, 2018, when the equity method was applied for this acquisition?

Under the equity method of accounting for an investment:

If Utah paid $300,000 in cash for Trimmer, what allocation and amortization should have been assigned to the subsidiary's Building account and its Equipment account in a December 31, 2018 consolidation?

Determine the amortization expense related to the consolidation at the year-end date of 12/31/24.

Which of the following will result in the recognition of an impairment loss on goodwill?

On the consolidated financial statements for 2017, what amount should have been shown for consolidated dividends?

When recording consideration transferred for the acquisition of Rhine on January 1, 2017, Harrison will record a contingent performance obligation in the amount of: