On January 1, 2009, 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 share 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 good will.
Following are the individual financial records for these two companies for the year ended December 31, 2012.
Rand Corp.
Spaulding Inc.
Revenues
$372,000
$108,000
Expenses
(264,000)
(72,000)
Equity in subsidiary earnings
25,000
0
Net income
$133,000
$36,000
Retained earnings January 1, 2012
$765,000
102,000
Net income (above)
133,000
36,000
Dividends paid
(84,000)
(24,000)
Retained earnings, December 31, 2012
$814,000
114,000
Current assets
$150,000
$22,000
Investment in Spaulding Inc.
242,000
0
Buildings (net)
525,000
85,000
Equipment (net)
389,250
129,000
Total assets
$1,306,250
$236,000
Liabilities
$82,250
$50,000
Common stock
360,000
72,000
Additional paid-in capital
50,000
0
Retained earnings, December 31, 2012 (above)
814,000
114,000
Total liabilities and stockholders? equity
$1,306,250
$236,000
Required:
Prepare a consolidation worksheet for this business combination.
Answers: 1
Business, 21.06.2019 17:30
Following are the transactions for valdez services. the company paid $2,000 cash for payment on a 6-month-old account payable for office supplies. the company paid $1,200 cash for the just completed two-week salary of the receptionist. the company paid $39,000 cash for equipment purchased. the company paid $800 cash for this month’s utilities. the company paid $4,500 cash in dividends to the owner (sole shareholder). examine the above transactions and identify those that create expenses for valdez services. prepare general journal entries to record those transactions that created expenses in the above given order.
Answers: 2
Business, 22.06.2019 06:30
Double corporation acquired all of the common stock of simple company for
Answers: 2
Business, 22.06.2019 15:00
Oerstman, inc. uses a standard costing system and develops its overhead rates from the current annual budget.the budget is based on an expected annual output of 120,000 units requiring 480,000 direct labor hours.(practical capacity is 500,000 hours)annual budgeted overhead costs total $772,800, of which $556,800 is fixed overhead.a total of 119,300 units, using 478,000 direct labor hours, were produced during the year.actual variable overhead costs for the year were $260,400 and actual fixed overhead costs were $555,450.required: 1. compute the fixed overhead spending variance and indicate if favorable or unfavorable.2. compute the fixed overhead volume variance and indicate if favorable or unfavorable.
Answers: 3
Business, 23.06.2019 01:30
Lee earns $1,482 of interest in 270 days after making a deposit of $15,200. find the interest rate.
Answers: 1
On January 1, 2009, Rand Corp. issued shares of its common stock to acquire all of the outstanding c...
Computers and Technology, 29.08.2019 01:30
Social Studies, 29.08.2019 01:30
History, 29.08.2019 01:30
Mathematics, 29.08.2019 01:30
Biology, 29.08.2019 01:30
Mathematics, 29.08.2019 01:30
Biology, 29.08.2019 01:30