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vladimir1956 [14]
3 years ago
12

.Goehler, Inc. acquires all of the voting stock of Kenneth, Inc. on January 4, 2017, at an amount in excess of Kenneth's fair va

lue. On that date, Kenneth has equipment with a book value of $90,000 and a fair value of $120,000 (10-year remaining life). Goehler has equipment with a book value of $800,000 and a fair value of $1,200,000 (10-year remaining life). On December 31, 2018, Goehler has equipment with a book value of $975,000 but a fair value of $1,350,000 and Kenneth has equipment with a book value of $105,000 but a fair value of $125,000. If Goehler applies the equity method in accounting for Kenneth, what is the consolidated balanc e for the Equipment account as of December 31, 2018
Business
1 answer:
myrzilka [38]3 years ago
7 0

Answer:

$1,104,000

Explanation:

The computation of the consolidated valance of the equipment account as on Dec 31, 2018 is shown below:

As per the data given in the question,

Particulars                                  Amount

Equipment with a book value  $975,000

Add: Kenneth Equipment =               $105,000

Add: Original purchase price for Kenneth = $120,000 - $90,000 = $30,000

Less: Amortization of allocation = ($30,000 × 2) ÷ 10 = $6,000

Consolidated balance for equipment   $1,104,000

We simply added the

= $975,000 + $105,000 + $30,000 - $6,000

= $1,104,000

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Please prepare the multi-step income statement, the statement of stockholders' equity and the classified balance sheet.
goldenfox [79]

Answer:

Operating Income = $53,000

Net Income = $39,000

Ending balance of common stock = $300,000

Ending balance of retained earnings = $95,000

Ending total stockholders' equity = $395,000

Total current assets = $198,000

Net long-term assets = $265,000

Total long-term assets = $285,000

Total assets = $463,000

Total liabilities = 68,000

Explanation:

a. Multi-step Income Statement

Multi-step Income Statement put each revenues and expenditures items into different categories to show gross profit and net income. This can be prepared as follows:

Multi-step Income Statement

For the year ended

<u>Details                                                        $        </u>

Sales Revenue                                     545,000

Sales Discount                                   <u>  (45,000)  </u>

Net Sales Revenue                             500,000  

Cost of Goods Sold                          <u>  (400,000) </u>

Gross profit                                          100,000

Operating expenses:

Rent Expense                                       (12,000)

Depreciation Expense                         (10,000)

Salaries Expenses                             <u>   (25,000)  </u>

Operating Income                                53,000

Non-operating expenses:

Interest Expense                                 <u>  (6,000) </u>

Income before tax                                 47,000

Income Tax Expense                          <u>   (8,000) </u>

Net income                                            39,000

Dividend paid                                      <u>  (4,000)  </u>

Retained earning for the year          <u>   35,000 </u>

b. Changes in Retained Earnings

<u>Details                                                          $           </u>

Beginning retained earnings                60,000

Retained earning for the year            <u>   35,000 </u>

Ending retained earnings                  <u>  95,000 </u>

c. Movement in Common Stock                

<u>Details                                                                  $           </u>

Beginning balance of common stock         250,000

Additional shares issued                            <u>    50,000 </u>

Ending balance of common stock          <u>   300,000 </u>

c. Statement of stockholders' equity

<u>Details                                                                  $           </u>

Beginning balance of common stock         250,000

Additional shares issued                            <u>    50,000 </u>

Ending balance of common stock               300,000

Ending retained earnings                           <u>    95,000  </u>

Ending total stockholders' equity            <u>  395,000  </u>

d. Classified Balance Sheet

Classified balance sheet shows each of the componets of assets, liabilities and equity. This can be prepared as follows:

Classified Balance Sheet

As at the year ended

<u>Details                                                      $                     $           </u>

<u>Long-Term Assets</u>

Buildings                                           65,000

Equipment                                   <u>   220,000  </u>

Total Long-Term Assets                285,000

Accumulated Depreciation      <u>       20,000 </u>

Net Long-Term Assets                                                265,000

<u>Current Assets</u>

Cash                                                  12,000

Accounts Receivable                     150,000

Supplies                                        <u>   36,000 </u>

Total Current Assets                                                 <u>   198,000 </u>

Total Assets                                                              <u>    463,000 </u>

<u>Financed by:</u>

Ending total stockholders' equity                               395,000

<u>Current Liability</u>

Accounts Payable                           28,000

<u>Long-Term Liability</u>

Notes Payable (Due in 2years)     <u>  40,000</u>

Total Liabilities                                                           <u>    68,000  </u>

Total Equity $ Liabilities                                          <u>   463,000  </u>

Conclusion

As both the Total Assets and Total Equity and Liabilities are each equal to $463,000, it implies the financial statement is accurately prepared since both must always be equal.

7 0
3 years ago
In a fuel economy study, each of 3 race cars is tested using 5 different brands of gasoline at 7 test sites located in different
romanna [79]

Answer:

210

Explanation:

  • The number of race cars = N₁ = 3
  • The number of gasoline brands = N₂ = 5
  • The number of test sites = N₃ = 7
  • The number of drivers that participated = N₄ = 2

This study must include each N₁, and it has to be done at each N₃, using each N₂, while carried out by each N₄ ⇒ that means that the total number of possibilities:

N₁ x N₃ x N₂ x N₄ = 3 x 7 x 5 x 2 = 210

The total number of test runs is 210.

4 0
3 years ago
Calculate and Use Overhead Rate Chipman Corporation expects to incur $300,000 of factory overhead and $500,000 of general and ad
tatyana61 [14]

Answer:

$1,500

Explanation:

Given that;

Factory overhead = $300,000

General and administrative costs= $500,000

Direct labor cost = $500,000

Total direct labor hours = $500,000 /$25 per hour

= 20,000 direct labor hours

Factory overheads per direct labor hours = $300,000 / 20,000

= $15 per direct labor hour

Therefore, Overheads applied to job will be;

= 100 direct labor hours × $15 per direct labor hour

= $1,500

Overhead applied is $1,500

7 0
3 years ago
Which of the following changes will increase short-run output? Group of answer choices an increase in the parameter governing ho
natita [175]

Answer:

The correct answer is letter "C": an increase in the target rate of inflation.

Explanation:

According to the Aggregate Demand Formula (<em>Consumer Spending + Investment Spending + Government Spending + Exports-Imports</em>) changes in its curve will be caused by changes in the inflation rate. The fact that <em>the target increases</em> will produce the interest rate to decrease and, as a result, the output will move in the opposite direction.

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The purpose of loaded words in advertisements is to influence the reader. Loaded words is a term used for words that can persuade a consumer to buy or use a product or service based on the way something was advertised. Usually, loaded words appeal to a consumers emotions and create a want or need for the product or service. These types of advertisements are used to appeal to a consumer emotionally rather than factually.

6 0
3 years ago
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