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LenaWriter [7]
3 years ago
10

Harper acquires 40 percent of the outstanding voting stock of Kinman Company on January 1, 2014, for $243,700 in cash. The book

value of Kinman’s net assets on that date was $460,000, although one of the company’s buildings, with a $74,200 carrying amount, was actually worth $118,450. This building had a 10-year remaining life. Kinman owned a royalty agreement with a 20-year remaining life that was undervalued by $105,000.
Kinman sold inventory with an original cost of $126,000 to Harper during 2014 at a price of $180,000. Harper still held $20,400 (transfer price) of this amount in inventory
Harper acquires 40 percent of the outstanding voting stock of Kinman Company on January 1, 2014, for $243,700 in cash. The book value of Kinman’s net assets on that date was $460,000, although one of the company’s buildings, with a $74,200 carrying amount, was actually worth $118,450. This building had a 10-year remaining life. Kinman owned a royalty agreement with a 20-year remaining life that was undervalued by $105,000.
Kinman sold inventory with an original cost of $126,000 to Harper during 2014 at a price of $180,000. Harper still held $20,400 (transfer price) of this amount in inventory as of December 31, 2014. These goods are to be sold to outside parties during 2015.
Kinman reported a $50,600 net loss and a $28,300 other comprehensive loss for 2014, The company still manages to declare a $18,000 cash dividend during the year.
During 2015, Kinman reported a $57,800 net income and declared cash dividend of $20,000. It made additional inventory sales of $134,000 to Harper during the period. The original cost of the merchandise was $83,750. All but 30 percent of this inventory had been resold to outside parties by the end of the 2015 fiscal year.
Business
1 answer:
KonstantinChe [14]3 years ago
5 0
One of the steps in solving this problem is this one:

As we know as shown above, the joournal entry for 2014 and 2015 will include the investment balance, increases and decreases to equity and intra-entity profits realized and deferred. Also the balance of the acquisition needs to be calculated.

Calculation of the book value of the purchase made as the book value of Company K times percent purchased:

400,000 * 0.40 = 160,000

Then, calculate the difference in the acquisition and the book value of the purchase:

210,000 - 160,000 = 50,000
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A __________-__________ bond is a straight fixed-rate bond issued in one currency that pays coupon interest in that same currenc
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2 years ago
The following costs were incurred in September:
aleksley [76]

Answer:

Option (d) is correct.

Explanation:

Given that,

Direct materials = $44,200

Direct labor = $31,800

Manufacturing overhead = $25,200

Selling expenses = $22,100

Administrative expenses = $37,100

Conversion cost:

= Direct labor + Manufacturing overhead

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3 years ago
FARO Technologies, whose products include portable 3D measurement equipment, recently had 36 million shares outstanding trading
erma4kov [3.2K]

Answer:

A. $117 million

B.13%

C. $21.75

Explanation:

B. Calculation to determine How large a loss in dollar terms will existing FARO shareholders experience on the announcement date

Expected Loss= 390*30%

Expected Loss= $117 millions

Therefore How large a loss in dollar terms will existing FARO shareholders experience on the announcement date will be $117 millions

B. Calculation to determine What percentage of the value of FARO’s existing equity prior to the announcement is this expected gain or loss

First step is to calculate the Existing Shares Value

Existing Shares Value =36*$25

Existing Shares Value= $900 millions

Now let calculate the Expected Loss %

Expected Loss % = $ 117/$ 900

Expected Loss % = 13%

Therefore the percentage of the value of FARO’s existing equity prior to the announcement is this expected gain or loss will be 13%

C. Calculation to determine At what price should FARO expect its existing shares to sell immediately after the announcement

Price Per Share: $ 25*(1 - 0.13)

Price Per Share$25*0.87

Price Per Share: $21.75

Therefore what price should FARO expect its existing shares to sell immediately after the announcement is $21.75

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