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McGuire Company acquired 90 percent of Hogan Company on January 1, 2014, for $234,000 cash.

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McGuire Company acquired 90 percent of Hogan Company on January 1, 2014, for $234,000 cash. This amount is reflective of Hogan’s total fair value. Hogan’s stockholders’ equity consisted of common stock of $160,000 and retained earnings of $80,000. An analysis of Hogan’s net assets revealed the following:

                                    Book Value                 Fair Value

Building (10-year life)   10,000                        8,000

Equipment (4-year life) 14,000                       18,000

Land                                  5,000                        12,000  

Any excess consideration transferred over fair value is attributable to an unamortized patent with a useful life of 5 years.

The acquisition value attributable to the non-controlling interest at January 1, 2014 is:


$24,000. $24,900. $20,000. $26,000. $23,400.

 
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Wilson owned equipment with an estimated life of 10 years when it was acquired for an original cost of $80,000.

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Wilson owned equipment with an estimated life of 10 years when it was acquired for an original cost of $80,000. The equipment had a book value of $50,000 at January 1, 2012. On January 1, 2012, Wilson realized that the useful life of the equipment was longer than originally anticipated, at ten remaining years.
On April 1, 2012 Simon Company, a 90% owned subsidiary of Wilson Company, bought the equipment from Wilson for $68,250 and for depreciation purposes used the estimated remaining life as of that date. The following data are available pertaining to Simon’s income and dividends:
                                                                           2012             2013              2014

 Net Income                                                100,000          120,000         130,000

Dividends                                                       40,000           50,000           60,000

 Compute the amortization of gain through a depreciation adjustment for 2014 for consolidation purposes.

$7,000.

$1,500.

$2,000.

$1,825.

$1,925.

 
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Sparkman Co. filed a bankruptcy petition and liquidated its noncash assets. Sparkman was paying forty cents on the dollar for unsecured claims

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Sparkman Co. filed a bankruptcy petition and liquidated its noncash assets. Sparkman was paying forty cents on the dollar for unsecured claims

 
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Nonprofit and Governmental: Consider that your company is a nonprofit entity and a governmental entity. Discuss the reporting requirements for each

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Nonprofit and Governmental: Consider that your company is a nonprofit entity and a governmental entity. Discuss the reporting requirements for each and how they differ from a for-profit entity.

A. Explain how you would address compliance with GAS in nonprofit and governmental financial statements. 

B. Explain how the analysis of nonprofit and governmental financial statements differs from analysis of traditional financial statements. Provide examples to support your response.

C. Compose example financial statements for your company as a nonprofit entity and as a governmental entity. Ensure all information is entered accurately and the statements are compliant with GAS

 
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