Entries by Hannah Wangui

On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $220,000 in cash

March 13, 2020 in /by

On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $220,000 in cash. The equipment had originally cost $198,000 but had a book value of only $121,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $320,000 in […]

 

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What is the subsidiary’s income recognized by Uncle in 2018?

March 13, 2020 in /by

On January 1, 2016, Uncle Company purchased 80 percent of Nephew Company’s capital stock for $592,000 in cash and other assets. Nephew had a book value of $714,000 and the 20 percent non controlling interest fair value was $148,000 on that date. On January 1, 2015, Nephew had acquired 30 percent of Uncle for $301,750. […]

 

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Firenze Company

March 13, 2020 in /by

Firenze Company developed a specialized banking application software program that it licenses to various financial institutions through multiple-year agreements. On January 1, 2018, these licensing agreements have a fair value of $752,500 and represent Firenze’s sole asset. Although Firenze currently has no liabilities, the company has a $205,000 net operating loss (NOL) carryforward because of […]

 

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The partnership agreement of Jones, King, and Lane

March 13, 2020 in /by

The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business’s profit or loss in the following sequence: Jones, the managing partner, receives a bonus equal to 10 percent of the business’s profit. Each partner receives 10 percent interest on average capital investment. Any residual profit or loss is divided […]

 

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