Entries by Hannah Wangui

assets and liabilities

August 31, 2019 in /by

Question On March 31, 2018, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $18,000,000 in cash. The book values and fair values of Barney’s assets and liabilities were as follows: Book Value Fair Value Current assets $ 7,000,000 $ 8,500,000 Property, plant, and equipment 12,000,000 15,000,000 Other assets 1,100,000 1,600,000 Current liabilities 5,000,000 5,000,000 Long-term liabilities 7,000,000 6,500,000 Required: Calculate the amount paid for goodwill.   Looking for […]

 

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journal entry

August 31, 2019 in /by

Question Cedric Company recently traded in an older model computer for a new model. The old model’s book value was $324,000 (original cost of $704,000 less $380,000 in accumulated depreciation) and its fair value of the old equipment is $360,000. Cedric paid $76,000 to complete the exchange which has commercial substance. Required: Prepare the journal […]

 

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journal entry

August 31, 2019 in /by

Question Howarth Manufacturing Company purchased a lathe on June 30, 2014, at a cost of $165,000. The residual value of the lathe was estimated to be $15,000 at the end of a five-year life. The lathe was sold on March 31, 2018, for $50,000. Howarth uses the straight-line depreciation method for all of its plant […]

 

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depletion

August 31, 2019 in /by

Question At the beginning of 2018, Terra Lumber Company purchased a timber tract from Boise Cantor for $3,480,000. After the timber is cleared, the land will have a residual value of $620,000. Roads to enable logging operations were constructed and completed on March 30, 2018. The cost of the roads, which have no residual value […]

 

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