Fortuna Company issued 70,000 shares of $1 par stock, with a fair value of $5 per share, for 80% of the outstanding shares of Acappella Company. The firms had the following separate balance sheets prior to the acquisition:
Assets Fortuna Acappella
Current assets $2,100,000 $ 960,000
Property, plant, and equipment (net) 4,600,000 1,300,000
Goodwill -- 240,000
Total assets $6,700,000 $2,500,000
Liabilities and Stockholders' Equity
Liabilities $3,000,000 $ 800,000
Common stock ($1 par) 800,000
Common stock ($5 par) 200,000
Paid-in capital in excess of par 2,200,000 300,000
Retained earnings 700,000 1,200,000
Total liabilities and equity $6,700,000 $2,500,000
Book values equal fair values for the assets and liabilities of Acappella Company, except for the property, plant, and equipment, which has a fair value of $1,400,000. Compute goodwill or gain recognized in the consolidated statements .
Book values equal fair values for the assets and liabilities of Acappella Company, except for the property, plant, and equipment, which have a fair value of $1,600,000.Required:
a. What is the Goodwill/Gain associated with the acquisition:
b. What is the Non-Controlling Interest recorded in the consolidated balance sheet
c. What is the balance of the assets and liabilities side of the consolidated balance sheet after the acquisition:
d.Record the two elimination entries associated with the acquisition of the company

Answer:

Part 1

$1,730,000 (Gain)

Part 2

a. $1,890,000 (Gain)

b. $560,000

c. Consolidated Assets = $9,850,000 and Consolidated Liabilities = $3,800,000

d.  Journals

Journal 1

Property Plant and Equipment $300,000 (debit)

Revaluation Reserve $300,000 (credit)

Revaluation of Acappella`s Property Plant and Equipment item

Journal 2

Common Stock $1,300,000 (debit)

Retained Earnings $1,200,000 (debit)

Revaluation Reserve $100,000 (debit)

Investment in Subsidiary $350,000 (credit)

Non-Controlling Interest $560,000 (credit)

Gain on Bargain Purchase $1,890,000 (credit)

Main Elimination Journal

Explanation:

Goodwill is the excess of Purchase Consideration over the Net Assets Acquired.

Purchase Consideration  (70,000 shares × $5) = $350,000

Part 1

Calculation of Net Assets Acquired

Retained Earnings                                             $1,200,000

Common Stock                                                  $1,300,000

Revaluation                                                           $100,000

Total Net Assets Acquired                               $2,600,000

Therefore,

Net Assets Attributable to Fortuna Company = $2,600,000 × 80%

                                                                            = $ 2,080,000

Purchase Consideration $350,000 < Net Assets Acquired ($ 2,080,000), therefore we have a gain situation of $1,730,000

Part 2

2a.

Calculation of Net Assets Acquired

Retained Earnings                                             $1,200,000

Common Stock                                                  $1,300,000

Revaluation                                                           $300,000

Total Net Assets Acquired                               $2,800,000

Therefore,

Net Assets Attributable to Fortuna Company = $2,800,000 × 80%

                                                                            = $ 2,240,000

Purchase Consideration $350,000 < Net Assets Acquired ($ 2,240,000), therefore we have a gain situation of $1,890,000

2b.

Calculation of Non - Controlling Interest

Note : I have elected to measure Non-Controlling Interest as proportionate to the fair value of Net Identified Assets Acquired !

Non - Controlling Interest = Non Controlled Interest % × Total Net Assets Acquired  

                                           = 20 % × $2,800,000

                                           = $560,000

2c.

Consolidation is 100 % of Parent/ Acquirer and 100% of subsidiary (Acquired) combined.

Assets :

Fortuna Company = $6,700,000 + $350,000     = $7,050,000

Acappella Company = $2,500,000 + $300,000 = $2,800,000

Total Assets                                                            = $9,850,000

Liabilities :

Fortuna Company                                                  = $3,000,000

Acappella Company                                                = $ 800,000

Total Liabilities                                                        = $3,800,000

2d.

Journal 1

Property Plant and Equipment $300,000 (debit)

Revaluation Reserve $300,000 (credit)

Revaluation of Acappella`s Property Plant and Equipment item

Journal 2

Common Stock $1,300,000 (debit)

Retained Earnings $1,200,000 (debit)

Revaluation Reserve $100,000 (debit)

Investment in Subsidiary $350,000 (credit)

Non-Controlling Interest $560,000 (credit)

Gain on Bargain Purchase $1,890,000 (credit)

Brace Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 21,600 hours. At the end of the year, actual direct labor-hours for the year were 20,400 hours, the actual manufacturing overhead for the year was $506,920, and manufacturing overhead for the year was underapplied by $23,440. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been:_________
A. $501,920
B. $531,445
C. $483,480
D. $511,920

Is cost minimization equivalent or identical the concept of product maximization. True of False. Explain

Share one or two specific examples of how you will use the concepts or strategies presented in this class to contribute to your academic and career success.

You are considering a project which will provide annual cash inflows of $4,921, $5,700, and $8,000 at the end of each year for the next three years, respectively. What is the present value of these cash flows, given a 9 percent discount rate?

A list of Year 3 revenues and expenses for Green Thumb, Inc. is provided below.
Advertising and Promotion Expenses $ 263,700
Income Tax Expense 56,620
Interest Expense 44,020
Other Expenses 123,600
Other Selling & Administrative Expenses 352,000
Sales Revenue 1,871,300
Salaries and Wages Expense 726,000
Required:
1. Calculate the net income for the Green Thumb, Inc. for Year 3.
2. Prepare a statement of retained earnings for Green Thumb, Inc. for Year 3. Assume the company had retained earnings of $163,200 as of January 1, Year 3, and paid out $46,120 in dividends during Year 3.

Dodie Company completed its first year of operations on December 31. All of the year's entries have been recorded except for the following: At year-end, employees earned wages of $4,000, which will be paid on the next payroll date in January of next year. At year-end, the company had earned interest revenue of $1,500. The cash will be collected March 1 of the next year.
Required: 2. Prepare the required adjusting entry for transactions (a) and (b). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Question 9 of 10
How should an annual business license fee be recorded in a journal entry?
A. As a credit, because it is an increased liability
B. As a credit, because it creates equity
C. As a debit, because it is an increased expense
D. As a debit, because it is a loss
SNBMIT

A company reports the following beginning Inventory and two purchases for the month of January. On January 26, the company sells 360 units. Ending Inventory at January 31 totals 130 units.
Units Unit Cost
Beginning inventory on January 1 320 $3.10
Purchase on January 9 70 3.30
Purchase on January 25 100 3.40
Required:
Assume the Perpetual Inventory system is used. Determine the costs assigned to ending Inventory when costs are assigned based on LIFO.

XYZ Company is union free. Because of increased costs and operational efficiency, it is in XYZ Company’s best interest to avoid unionization. While still in this non-unionized state, it is important for YYZ to do all EXCEPT which of the following?

At the beginning of the current season on April 1, the ledger of Granite Hills Pro Shop showed Cash $ 3,360: inventory $ 3,500: and Common Stock $ 6,860. The following transactions were completed during April 2017.Apr. 5 Purchased golf bags, clubs, and balls on account from Arnie Co. $ 1,500, terms 3/10, n/60.7 Paid freight on Arnie purchase $ 80.9 Received credit from Arnie Co. for merchandise returned $700.10 Sold merchandise on account to members $1,420, terms n/30. The merchandise sold had a cost of $ 770.12 Purchased golf shoes, sweaters, and other accessories on account from Woods Sportswear $ 1,060, terms 2/10, n30.14 Paid Arnie Co. in full.17 Received a credit from Woods Sportswear for merchandise returned $60.20 Made sales on account to members $ 820, terms n/30. The cost of the merchandise sold was $550.21 Paid Woods Sportswear in full.27 Granted an allowance to members for clothing that did not fit properly $70.30 Received payments on account from members $1,370.1. Journalize the April transactions using a perpetual inventory system.2. Prepare an income statement through gross profit for the month of April 2017.

Cost of Production Report
The Cutting Department of Karachi Carpet Company provides the following data for January. Assume that all materials are added at the beginning of the process.
Work in process, January 1, 7,000 units, 70% completed $81,970
Direct materials (7,000 × $8.00) $56,000
Conversion (7,000 × 70% × $5.30) 25,970
$81,970
Materials added during January from Weaving
Department, 108,000 units $869,400
Direct labor for January 248,134
Factory overhead for January 303,274
Goods finished during January (includes goods in
process, January 1), 109,200 units —
Work in process, January 31, 5,800 units, 30% completed —
A. Prepare a cost of production report for the Cutting Department. If an amount is zero or a blank, enter in "0".
B. Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (December).

Blossom Corp is issuing a 10-year bond with a coupon rate of 11 percent. The interest rate for similar bonds is currently 7 percent. Assuming annual payments, what is the value of the bond

On February 1, 2018, Wolf Inc. issued 10% bonds dated February 1, 2018, with a face amount of $270,000. The bonds sold for $323,440 and mature in 20 years. The effective interest rate for these bonds was 8%. Interest is paid semiannually on July 31 and January 31. Wolf's fiscal year is the calendar year. Wolf uses the effective interest method of amortization.
Required:
1. Prepare the journal entry to record the bond issuance on February 1, 2018.
2. Prepare the entry to record interest on July 31, 2018.
3. Prepare the necessary journal entry on December 31, 2018.
4. Prepare the necessary journal entry on January 31, 2019.

Which activities are often required of someone who is in the performing arts?

A. writing creatively, remembering a script, and entertaining people

B. going on auditions, using pottery wheels, and scheduling tasks

C. creating artwork, designing a dance routine, and interviewing people to get information

D. coordinating performances, attending events to market themselves, and operating technical equipment

The purchase of office equipment at a cost of $7,600 with an immediate payment of $4,200 and agreement to pay the balance within 60 days is recorded by the purchaser with:_____.
A. A debit of $7,600 to Office Equipment, a credit of $4,200 to Cash, and a credit of $3,400 to Accounts Payable.
B. A debit of $7,600 to Office Equipment, a debit of $4,200 to Accounts Receivable, and a credit of $3,400 to Accounts Payable.
C. A debit of $3,400 to Accounts Receivable, a debit of $4,200 to Cash, and a credit of $7,600 to Office Equipment.
D. A debit of $7,600 to Office Equipment, a credit of $4,200 to Cash, and a credit of $3,400 to Accounts Receivable.

Assume that in the short run a firm is producing 500 units of output, has average total costs of $300, and has average variable costs of $220. The firm's total fixed costs are. Select one: a. $40,000. b. $6.25. c. $0.16. d. $80.

Following is information about consulting jobs for a company that is increasing in sales, but has not yet become profitable. The owner keeps financial records on yellow sticky notes stuck to the wall behind his desk. He has asked you to help him set up a costing system so that he can better understand his costs. The owner said that job 140 was completed, job 141 was started and completed, and job 142 was started this month. Professional labour hours for contracts in process consist of job 140 with 129 hours, job 141 with 258 hours, and job 142 with 137 hours. Professional labour was paid $23,580 for the month, and the professional employees are all paid the same rate per hour. Overhead is allocated using an estimated rate based on professional labour hours. The total cost for job 141 is $32,766. Actual overhead cost for the month was $53,448. What is labour paid per hour? Labour per hour. What is the estimated rate per labour hour used to allocate overhead? per hour. Overhead rate What are the total costs (before adjusting for overapplied or underapplied overhead) for Jobs 141, 142, and 143? Total cost Job 140 Job 141 Job 142 What are the amounts in cost of goods sold and work-in-process at the end of the month? Cost of goods sold Work-in-process What amount of overhead was overapplied or underapplied this month? Overhead If this month is typical, what is a reasonable overhead rate? Reasonable overhead rate per hour

Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the following , identify which type of activity is described by each statement. (Operating Activity Investing Activity Financing Activity)

a. Yum Co. uses cash to repurchase 10% of its common stock.
b. DigiInk Printing Co. buys new machinery to ramp up its production capacity.
c. D and W Co. sells its last season’s inventory to a discount store.
d. A company records a loss of $70,000 on the sale of its outdated inventory.

Hilary sells bottled water from a small stand by the beach. On the last day of summer vacation, many people are on the beach, and Hilary realizes that she can make a lot more money this day if she hires someone to walk up and down the beach selling water. She finds a college student named Edison and makes him the following offer: They'll each sell water all day and split their earnings (revenue minus the cost of water) equally at the end of the day. Hilary knows that if they both work hard, Edison will earn $90 on the beach and Hilary will earn $240 at her stand, so they will each take home half of their total revenue: If Edison shirks, he'll generate only $60 in earnings. Hilary does not know that Edison estimates his personal cost (or disutility) of working hard as opposed to shirking at $30. Once out of Hilary's sight, Edison faces a dilemma: work hard (put in full effort) or shirk (put in low effort).In terms of Edison's total utility, it is worse for him to ____(work hard or shirk). Taking into account the loss in utility that working hard brings to Edison, Hilary and Edison together ___ (are or are not) better off if Edison shirks instead of working hard.Hilary knows Edison will shirk if unsupervised. She considers hiring her good friend Carrie to keep an eye on Edison. The most Hilary should be willing to pay Carrie to supervise Edison, assuming supervision is sufficient to encourage Edison to work hard, is ____ .
a. 55.
b. 30.
c. 25.
d. 20.It turns out that Hilary's friend Carrue is unavilable that day, so Hilary cannot find a reliable person to watch Edison. Which of the following arrangements will ensure that Edison works hard without making Hilary any worse off than she is when Edison shirks?A. Pay Edison $20, regardless of how many bottles of water he sells.B. Allow Edison to keep 75% of the revenue from the bottles of water he sells instead of 50%.C. Allow Edison to keep 57% of the revenue from the bottles of water he sells instead of 50%.D. Make Edison promise to work hard.

Which idea forms the basis of double-entry accounting?
A. For every single transaction, at least two accounts will be
affected.
B. For every single transaction, only assets will be impacted.
C. The assets of a business equal the stockholders' equity.
O D. The stockholders' equity in a business must equal the liabilities.

There is a natural progression from one statement to the next. The following boxes represent the four financial statements. The set of financial statements is prepared at the end of each accounting period to communicate information about the company’s operations during that period to its users. Use the selection lists to demonstrate your knowledge of the relationships between the statements. In the headings, you will need to select the appropriate statement name and time period.(Hint: Ask yourself if the statement covers a period of time or if it is a snapshot at a given point in time.) Then complete the blanks following the headings.)
Statement:
ABC Company This statement shows how profitable a company is. It is sometimes referred to as the profit and loss (P&L) statement.
This statement summarizes the_______ Which item from this financial statement appears on the next financial statement?

List and describe the three types of income. Include information regarding how each one is taxed.

Consider the following information for stocks A, B, and C. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (That is, each of the correlation coefficients is between 0 and 1.)


Stock Expected Return Standard Deviation Beta
A 8.60% 14% 0.8
B 9.95 14 1.1
C 11.75 14 1.5

Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 5%, and the market is in equilibrium. (That is, required returns equal expected returns.)

Required:
a. What is the market risk premium?
b. What is the beta of Fund P?
c. What is the required return of Fund P?
d. Would you expect the standard deviation of Fund P to be less than 15%, equal to 15% or greater than 15%? Explain.

Business standards should be based on which of the following?​

Indicate which activities of Stockton Corporation violated the rights of a stockholder who owned one share of common stock.

a. Paid the stockholder a smaller dividend per share than another common stockholder.
b. Did not allow the stockholder to make decisions regarding hiring and firing employees.
c. Rejected the stockholder's request to vote via proxy because she was home sick.
d. The company did not provide all stockholders with timely financial reports.
e. In liquidation, paid the common shareholder after preferred stockholders were already paid.

Use the following information to prepare a multistep income statement and a classified balance sheet for Eller Equipment Co. for Year 1.

Salaries expense $122,000 Beginning retained earnings $61,100
Common stock 110,000 Warranties payable (short term) 6,500
Notes receivable (short term) 32,500 Gain on sale of equipment 19,000
Allowance for doubtful accounts 19,000 Operating expenses 65,000
Accumulated depreciation 66,000 Cash flow from investing activities 116,000
Notes payable (long term) 160,000 Prepaid rent 38,000
Salvage value of building 21,000 Land 95,000
Interest payable (short term) 6,000 Cash 41,000
Uncollectible accounts expense 45,000 Inventory 101,000
Supplies 6,500 Accounts payable 55,000 Equipment 243,000
Interest expense 36,000 Interest revenue 6,200
Salaries payable 68,000 Sales revenue 940,000
Unearned revenue 47,000 Dividends 20,000
Cost of goods sold 595,000 Warranty expense 9,200
Accounts receivable 108,000 Interest receivable (short term) 3,600
Depreciation expense 3,000

Verne Cova Company has the following balances in selected accounts on December 31, 2014.
Accounts Receivable $ -0-
Accumulated Depreciation—Equipment -0-
Equipment 7,000
Interest Payable -0-
Notes Payable 10,000
Prepaid Insurance 2,100
Salaries and Wages Payable -0-
Supplies 2,450
Unearned Service Revenue 30,000
All the accounts have normal balances. The information below has been gathered at December 31, 2014.
1. Verne Cova Company borrowed $10,000 by signing a 12%, one-year note on September 1, 2014.
2. A count of supplies on December 31, 2014, indicates that supplies of $900 are on hand.
3. Depreciation on the equipment for 2014 is $1,000.
4. Verne Cova Company paid $2,100 for 12 months of insurance coverage on June 1, 2014.
5. On December 1, 2014, Verne Cova collected $30,000 for consulting services to be performed from December 1, 2014, through March 31, 2015.
6. Verne Cova performed consulting services for a client in December 2014. The client will be billed $4,200.
7. Verne Cova Company pays its employees total salaries of $9,000 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2014.
Instructions:
Prepare adjusting entries for the seven items described above.

What is a premium in personal finance HEEEEELLPPP

Fort Corporation had the following transactions during its first month of operations
1. Purchased raw materials on account, $85,000.
2. Raw Materials of $30,000 were requisitioned to the factory.
3. An analysis of the materials requisition slips indicated that $6,000 was classified as indirect materials labor costs incurred were $175,000 of which $145,000 pertained to factory wages payable and $30,000 pertained to employer payrol
4. Time tickets indicated that $145,000 was direct labor and $30,000 was indirect labor.
5. Overhead costs incurred on account were $198,000
6. Manufacturing overhead was applied at the rate of 150% of direct labor cost.
7. Goods costing $115,000 are still incomplete at the end of the month; the other goods were completed and transferred to finished goods
8. Finished goods costing $100,000 to manufacture were sold on account for $130,000.
Journalize the above transactions for Fort Corporation. (Record journal entries in the order presented in the problem.

f the present value of the annuity is $45,000, what should be the size of each payment from the annuity