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Week3Connect.docxEx1
Required information
Use the following information to answer questions 15-18
[The following information applies to the questions displayed below.]
On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $50 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts.
|
|
TruData |
|
Webstat |
|
Webstat |
||||||
|
|
Book Values |
|
Book Values |
|
Fair Values |
||||||
|
Revenues (1/1 to 7/1) |
$ |
(288,200 |
) |
|
$ |
(172,000 |
) |
|
|
|
|
|
Expenses (1/1 to 7/1) |
|
192,000 |
|
|
|
86,000 |
|
|
|
|
|
|
Retained earnings, 1/1 |
|
(134,000 |
) |
|
|
(140,000 |
) |
|
|
|
|
|
Cash and receivables |
|
168,000 |
|
|
|
76,000 |
|
|
$ |
76,000 |
|
|
Inventory |
|
186,000 |
|
|
|
148,000 |
|
|
|
170,000 |
|
|
Patented technology (net) |
|
228,000 |
|
|
|
178,000 |
|
|
|
202,000 |
|
|
Land |
|
382,000 |
|
|
|
198,000 |
|
|
|
238,000 |
|
|
Buildings and equipment (net) |
|
102,000 |
|
|
|
90,000 |
|
|
|
90,000 |
|
|
Liabilities |
|
(532,000 |
) |
|
|
(370,000 |
) |
|
|
(346,000 |
) |
|
Common stock |
|
(294,000 |
) |
|
|
(62,000 |
) |
|
|
|
|
|
Additional paid-in capital |
|
(9,800 |
) |
|
|
(32,000 |
) |
|
|
|
|
|
|
rev: 05_10_2017_QC_CS-88998, 05_18_2017_QC_CS-89463
Problem 2-15 (LO 2-5, 2-9, 2-10)
On its acquisition-date consolidated balance sheet, what amount should TruData report as goodwill?
Multiple Choice
Top of Form
·
$0.
·
$344,000.
·
$70,000.
·
$180,000.
Bottom of Form
Ex2
Required information
Use the following information to answer questions 15-18
[The following information applies to the questions displayed below.]
On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $50 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts.
|
|
TruData |
|
Webstat |
|
Webstat |
||||||
|
|
Book Values |
|
Book Values |
|
Fair Values |
||||||
|
Revenues (1/1 to 7/1) |
$ |
(288,200 |
) |
|
$ |
(172,000 |
) |
|
|
|
|
|
Expenses (1/1 to 7/1) |
|
192,000 |
|
|
|
86,000 |
|
|
|
|
|
|
Retained earnings, 1/1 |
|
(134,000 |
) |
|
|
(140,000 |
) |
|
|
|
|
|
Cash and receivables |
|
168,000 |
|
|
|
76,000 |
|
|
$ |
76,000 |
|
|
Inventory |
|
186,000 |
|
|
|
148,000 |
|
|
|
170,000 |
|
|
Patented technology (net) |
|
228,000 |
|
|
|
178,000 |
|
|
|
202,000 |
|
|
Land |
|
382,000 |
|
|
|
198,000 |
|
|
|
238,000 |
|
|
Buildings and equipment (net) |
|
102,000 |
|
|
|
90,000 |
|
|
|
90,000 |
|
|
Liabilities |
|
(532,000 |
) |
|
|
(370,000 |
) |
|
|
(346,000 |
) |
|
Common stock |
|
(294,000 |
) |
|
|
(62,000 |
) |
|
|
|
|
|
Additional paid-in capital |
|
(9,800 |
) |
|
|
(32,000 |
) |
|
|
|
|
|
|
rev: 05_10_2017_QC_CS-88998, 05_18_2017_QC_CS-89463
Problem 2-16 (LO 2-5)
On its acquisition-date consolidated balance sheet, what amount should TruData report as patented technology (net)?
Multiple Choice
Top of Form
·
$430,000.
·
$202,000.
·
$228,000.
·
· $418,000.
·
Bottom of Form
Ex3
Required information
Use the following information to answer questions 15-18
[The following information applies to the questions displayed below.]
On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $50 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts.
|
|
TruData |
|
Webstat |
|
Webstat |
||||||
|
|
Book Values |
|
Book Values |
|
Fair Values |
||||||
|
Revenues (1/1 to 7/1) |
$ |
(288,200 |
) |
|
$ |
(172,000 |
) |
|
|
|
|
|
Expenses (1/1 to 7/1) |
|
192,000 |
|
|
|
86,000 |
|
|
|
|
|
|
Retained earnings, 1/1 |
|
(134,000 |
) |
|
|
(140,000 |
) |
|
|
|
|
|
Cash and receivables |
|
168,000 |
|
|
|
76,000 |
|
|
$ |
76,000 |
|
|
Inventory |
|
186,000 |
|
|
|
148,000 |
|
|
|
170,000 |
|
|
Patented technology (net) |
|
228,000 |
|
|
|
178,000 |
|
|
|
202,000 |
|
|
Land |
|
382,000 |
|
|
|
198,000 |
|
|
|
238,000 |
|
|
Buildings and equipment (net) |
|
102,000 |
|
|
|
90,000 |
|
|
|
90,000 |
|
|
Liabilities |
|
(532,000 |
) |
|
|
(370,000 |
) |
|
|
(346,000 |
) |
|
Common stock |
|
(294,000 |
) |
|
|
(62,000 |
) |
|
|
|
|
|
Additional paid-in capital |
|
(9,800 |
) |
|
|
(32,000 |
) |
|
|
|
|
|
|
rev: 05_10_2017_QC_CS-88998, 05_18_2017_QC_CS-89463
Problem 2-17 (LO 2-5, 2-7)
On its acquisition-date consolidated balance sheet, what amount should TruData report as common stock?
Multiple Choice
Top of Form
·
$294,000.
·
$62,000.
·
$344,000.
·
$356,000.
Bottom of Form
Ex4
Required information
Use the following information to answer questions 15-18
[The following information applies to the questions displayed below.]
On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $50 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts.
|
|
TruData |
|
Webstat |
|
Webstat |
||||||
|
|
Book Values |
|
Book Values |
|
Fair Values |
||||||
|
Revenues (1/1 to 7/1) |
$ |
(288,200 |
) |
|
$ |
(172,000 |
) |
|
|
|
|
|
Expenses (1/1 to 7/1) |
|
192,000 |
|
|
|
86,000 |
|
|
|
|
|
|
Retained earnings, 1/1 |
|
(134,000 |
) |
|
|
(140,000 |
) |
|
|
|
|
|
Cash and receivables |
|
168,000 |
|
|
|
76,000 |
|
|
$ |
76,000 |
|
|
Inventory |
|
186,000 |
|
|
|
148,000 |
|
|
|
170,000 |
|
|
Patented technology (net) |
|
228,000 |
|
|
|
178,000 |
|
|
|
202,000 |
|
|
Land |
|
382,000 |
|
|
|
198,000 |
|
|
|
238,000 |
|
|
Buildings and equipment (net) |
|
102,000 |
|
|
|
90,000 |
|
|
|
90,000 |
|
|
Liabilities |
|
(532,000 |
) |
|
|
(370,000 |
) |
|
|
(346,000 |
) |
|
Common stock |
|
(294,000 |
) |
|
|
(62,000 |
) |
|
|
|
|
|
Additional paid-in capital |
|
(9,800 |
) |
|
|
(32,000 |
) |
|
|
|
|
|
|
rev: 05_10_2017_QC_CS-88998, 05_18_2017_QC_CS-89463
Problem 2-18 (LO 2-5, 2-7)
On its acquisition-date consolidated balance sheet, what amount should TruData report as retained earnings as of July 1?
Multiple Choice
Top of Form
·
$298,000.
·
$230,200.
·
$586,200.
·
$134,000.
Bottom of Form
Ex5
Problem 2-22 (LO 2-6a, 2-6b)
The following book and fair values were available for Westmont Company as of March 1.
|
|
Book Value |
Fair Value |
||||
|
Inventory |
$ |
609,250 |
|
$ |
572,250 |
|
|
Land |
|
755,250 |
|
|
1,050,000 |
|
|
Buildings |
|
1,800,000 |
|
|
2,152,500 |
|
|
Customer relationships |
|
0 |
|
|
849,750 |
|
|
Accounts payable |
|
(91,000 |
) |
|
(91,000 |
) |
|
Common stock |
|
(2,000,000 |
) |
|
|
|
|
Additional paid-in capital |
|
(500,000 |
) |
|
|
|
|
Retained earnings 1/1 |
|
(416,500 |
) |
|
|
|
|
Revenues |
|
(481,500 |
) |
|
|
|
|
Expenses |
|
324,500 |
|
|
|
|
|
|
Arturo Company pays $4,150,000 cash and issues 20,900 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont’s common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $28,600 and Arturo pays $44,600 for legal fees to complete the transaction.
Prepare Arturo’s journal entry to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Ex6
Required information
Use the following information to answer questions 19-20
[The following information applies to the questions displayed below.]
The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are as follows:
|
BALANCE SHEETS |
|||||||
|
December 31, 2017 |
|||||||
|
|
Patrick |
|
Sean |
||||
|
Cash |
$ |
74,000 |
|
|
$ |
52,000 |
|
|
Accounts receivable (net) |
|
130,000 |
|
|
|
40,000 |
|
|
Inventories |
|
86,000 |
|
|
|
72,000 |
|
|
Plant and equipment (net) |
|
622,000 |
|
|
|
278,000 |
|
|
Investment in Sean |
|
468,000 |
|
|
|
- |
|
|
Total assets |
$ |
1,380,000 |
|
|
$ |
442,000 |
|
|
Accounts payable |
|
156,000 |
|
|
|
84,000 |
|
|
Long-term debt |
|
116,000 |
|
|
|
20,000 |
|
|
Common stock ($10 par) |
|
308,000 |
|
|
|
44,000 |
|
|
Additional paid-in capital |
|
|
|
|
|
10,000 |
|
|
Retained earnings |
|
800,000 |
|
|
|
284,000 |
|
|
Total liabilities and shareholders' equity |
$ |
1,380,000 |
|
|
$ |
442,000 |
|
|
|
Additional Information:
· On December 31, 2017, Patrick acquired 100 percent of Sean’s voting stock in exchange for $468,000.
· At the acquisition date, the fair values of Sean’s assets and liabilities equaled their carrying amounts, respectively, except that the fair value of certain items in Sean’s inventory were $22,000 more than their carrying amounts.
Problem 2-19 (LO 2-4, 2-5)
In the December 31, 2017, consolidated balance sheet of Patrick and its subsidiary, what amount of total assets should be reported?-88999
Top of Form
·
$1,380,000
·
$1,360,000
·
$1,952,000
·
$1,484,000
Ex7
Required information
Use the following information to answer questions 19-20
[The following information applies to the questions displayed below.]
The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are as follows:
|
BALANCE SHEETS |
|||||||
|
December 31, 2017 |
|||||||
|
|
Patrick |
|
Sean |
||||
|
Cash |
$ |
74,000 |
|
|
$ |
52,000 |
|
|
Accounts receivable (net) |
|
130,000 |
|
|
|
40,000 |
|
|
Inventories |
|
86,000 |
|
|
|
72,000 |
|
|
Plant and equipment (net) |
|
622,000 |
|
|
|
278,000 |
|
|
Investment in Sean |
|
468,000 |
|
|
|
- |
|
|
Total assets |
$ |
1,380,000 |
|
|
$ |
442,000 |
|
|
Accounts payable |
|
156,000 |
|
|
|
84,000 |
|
|
Long-term debt |
|
116,000 |
|
|
|
20,000 |
|
|
Common stock ($10 par) |
|
308,000 |
|
|
|
44,000 |
|
|
Additional paid-in capital |
|
|
|
|
|
10,000 |
|
|
Retained earnings |
|
800,000 |
|
|
|
284,000 |
|
|
Total liabilities and shareholders' equity |
$ |
1,380,000 |
|
|
$ |
442,000 |
|
|
|
Additional Information:
· On December 31, 2017, Patrick acquired 100 percent of Sean’s voting stock in exchange for $468,000.
· At the acquisition date, the fair values of Sean’s assets and liabilities equaled their carrying amounts, respectively, except that the fair value of certain items in Sean’s inventory were $22,000 more than their carrying amounts.
Problem 2-20 (LO 2-4, 2-5)
In the December 31, 2017, consolidated balance sheet of Patrick and its subsidiary, what amount of total stockholders’ equity should be reported?
Multiple Choice
Top of Form
·
$1,130,000
·
$1,108,000
·
$1,086,000
·
$1,346,000
Bottom of Form
Bottom of Form
Ex8
Problem 2-11 (LO 2-5)
On June 1, Cline Co. paid $966,500 cash for all of the issued and outstanding common stock of Renn Corp. The carrying amounts for Renn’s assets and liabilities on June 1 follow:
|
|
|
|
|
|
Cash |
$ |
151,000 |
|
|
Accounts receivable |
|
205,500 |
|
|
Capitalized software costs |
|
332,000 |
|
|
Goodwill |
|
189,000 |
|
|
Liabilities |
|
(135,000 |
) |
|
Net assets |
$ |
742,500 |
|
|
|
On June 1, Renn’s accounts receivable had a fair value of $145,000. Additionally, Renn’s in-process research and development was estimated to have a fair value of $252,000. All other items were stated at their fair values. On Cline’s June 1 consolidated balance sheet, how much is reported for goodwill?
Multiple Choice
Top of Form
·
$332,000.
·
$161,000.
·
$28,000.
·
$221,500
Bottom of Form
Ex9
Required information
Use the following information to answer questions 12-13
[The following information applies to the questions displayed below.]
On May 1, Donovan Company reported the following account balances:
|
|
|
|
|
|
Current assets |
$ |
114,500 |
|
|
Buildings & equipment (net) |
|
223,000 |
|
|
Total assets |
$ |
337,500 |
|
|
Liabilities |
$ |
64,500 |
|
|
Common stock |
|
150,000 |
|
|
Retained earnings |
|
123,000 |
|
|
Total liabilities and equities |
$ |
337,500 |
|
|
|
On May 1, Beasley paid $451,800 in stock (fair value) for all of the assets and liabilities of Donovan, which will cease to exist as a separate entity. In connection with the merger, Beasley incurred $17,000 in accounts payable for legal and accounting fees.
Beasley also agreed to pay $82,900 to the former owners of Donovan contingent on meeting certain revenue goals during the following year. Beasley estimated the present value of its probability adjusted expected payment for the contingency at $21,100. In determining its offer, Beasley noted the following:
· Donovan holds a building with a fair value $38,600 more than its book value.
· Donovan has developed unpatented technology appraised at $27,700, although is it not recorded in its financial records.
· Donovan has a research and development activity in process with an appraised fair value of $49,200. The project has not yet reached technological feasibility.
· Book values for Donovan’s current assets and liabilities approximate fair values.
Problem 2-12 (LO 2-4, 2-5)
12. What should Beasley record as total liabilities incurred or assumed in connection with the Donovan merger?
Multiple Choice
Top of Form
·
$81,500.
·
$102,600.
·
$150,000.
·
$17,000.
Bottom of Form
Required information
Use the following information to answer questions 12-13
[The following information applies to the questions displayed below.]
On May 1, Donovan Company reported the following account balances:
|
|
|
|
|
|
Current assets |
$ |
114,500 |
|
|
Buildings & equipment (net) |
|
223,000 |
|
|
Total assets |
$ |
337,500 |
|
|
Liabilities |
$ |
64,500 |
|
|
Common stock |
|
150,000 |
|
|
Retained earnings |
|
123,000 |
|
|
Total liabilities and equities |
$ |
337,500 |
|
|
|
On May 1, Beasley paid $451,800 in stock (fair value) for all of the assets and liabilities of Donovan, which will cease to exist as a separate entity. In connection with the merger, Beasley incurred $17,000 in accounts payable for legal and accounting fees.
Beasley also agreed to pay $82,900 to the former owners of Donovan contingent on meeting certain revenue goals during the following year. Beasley estimated the present value of its probability adjusted expected payment for the contingency at $21,100. In determining its offer, Beasley noted the following:
· Donovan holds a building with a fair value $38,600 more than its book value.
· Donovan has developed unpatented technology appraised at $27,700, although is it not recorded in its financial records.
· Donovan has a research and development activity in process with an appraised fair value of $49,200. The project has not yet reached technological feasibility.
· Book values for Donovan’s current assets and liabilities approximate fair values.
Problem 2-13 (LO 2-5, 2-8)
13. How much should Beasley record as total assets acquired in the Donovan merger?
Multiple Choice
Top of Form
·
$472,900.
·
$537,400.
·
$451,800.
·
$517,600.
Bottom of Form
