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ACC-690 Module 6-2 Quiz Question # 11 Watkins, Inc. acquires all of the outstanding stock of Glen Corporation on January 1, 2012.

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CC-690

Module 6-2

Quiz

Question # 11

 Watkins, Inc. acquires all of the outstanding stock of Glen Corporation on January 1, 2012. At that date, Glen owns only three assets and has no liabilities:

                                                                          Book Value            Fair value

 Inventory (FIFO method)                               $ 40,000             $ 50,000     

 Equipment(10 Year life)                                     80,000                 75,000

 Building(20 Year life)                                        200,000              300,000      

 If Watkins pays $ 450,000 in cash for Glen, at what amount would Glen’s inventory acquired be represented in a December 31, 2012 consolidated balance sheet?

 0 $ 10,000

 0 $   0

 0 $ 90,000

 0 $ 40,000

 0 $ 50,000

 
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ACC-690 Module 6-2 Quiz Question # 12 Jans Inc, acquired all of the outstanding common stock of Tysk Corp. on January 1, 2011, for $ 372,000.

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ACC-690

Module 6-2

Quiz

Question # 12

 Jans Inc, acquired all of the outstanding common stock of Tysk Corp. on January 1, 2011, for $ 372,000. Equipment with a 10 year life was undervalued on Tysk’s financial records by $ 46,000. Tysk also owned an unrecorded  customer list with an assessed fair value of $ 67,000 an and estimated remaining life of five years. Tysk earned reported net income of $ 180,000 in 2011 and $ 216,000 in 2012. Dividends  of $ 70,000 were paid in each of these two years. Selected account balances as of December 31, 2013, for the two companies follows:

                                                            Jans                             Tysk

 Revenues                                   $ 1,080,000              $    840,000

 Expenses                                       480,000                       600,000

 Investment income                        Not given                         0

 Retained earnings, 1/1/13             840,000                       600,000

 Dividends paid                                132,000                          70,000

 If the equity method had been applied, what would be the investment in Tysk Corp. account balance within the records of Jans at the end of 2013?

 0 $ 372,000

 0 $ 612,100

 0 $ 844,150

 0 $ 744,000

 0 $ 774,150

 
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The partners would like you to work with a larger client and create a report addressing some of the client’s main concerns.

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The partners would like you to work with a larger client and create a report addressing some of the client’s main concerns. In Milestone One, you will lay out the key issues regarding partnership formation, income distribution, and liquidation. You will also explain the issues of voluntary and forced bankruptcy as well as liquidation as a corporation.To complete this assignmen

 
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Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2014. Demers reported common stock of $300,000 and retained earnings

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Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2014. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired.

Demers earns income and pays dividends as follows:

Assume the PARTIAL EQUITY method is applied.

Compute the non-controlling interest in Demers at December 31, 2016.$140,000.$107,800.$160,800.$80,000.$146,800.

 
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