On July 1, B. Darin Company sold merchandise costing $4,500 to S. De.pdf

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On July 1, B. Darin Company sold merchandise costing $4,500 to S. Dee Company for $6,000, terms 2/10, n/30. Both companies use a perpetual inventory system. What is the journal entry that S. Dee Company will make on July 1? A) Purchases B) Inventory C) Inventory D) Cost of goods sold 6,000 6,000 6,000 4,500 Accounts payable 6,000 6,000 6,000 4,500 Accounts receivable Accounts payable Inventory Solution A. Option A Purchases A/C Dr 6000 To Accounts Payable 6000.

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On January 1, 20XI, Parent Company acquired 80% of the common stock of Subsidiary Company for $750,000. On this date, Subsidiary had total owners equity of $540,000 Any excess of cost over book value is attritbutable to land, undervalued $197,500 and to goodwill. During 20XI and 20X2, Parent has appropriately accounted for its investment in Subsidiary using the simple equity method. On January 1, 20X2, Parent held merchandise acquired from Subsidiary for $10,000. During 20X2, Subsidiary sold merchandise to Parent for $100,000, of which $20,000 is held by Parent on December 31, 20X2. Subsidiary usual gross profit on affiliated sales is 40%. On Dcember 31, 20X2, Parent still owes Subsidiary $20,000 for merchandise acquired in December of 20X2. On January 1, 20X2, Parent sold to Subsidiary some equipment with a cost of $50,000 and a book value of $20,000. The sales price was $40,000, Subsidiary uses the equipment in its business and is depreciating the equipment over a fire year life, assuming no salvage value and using the straight line method. ****Prepare the Determenation and Distribution Schedule as of the Date of Acquisiton, 1/1/X1, Please Use Good Form!! Solution Since it is given that Parent Company acquired 80% of the common stock of Subsidiary Company for $750,000. & Subsidiary had total owners equity of $540,000 & it is also given that excess of cost over book value is attritbutable to land, undervalued $197,500 and balance to goodwill therefore following is the distributionParticularsAmountInvestment as 1st Jan 20x1 7,50,000DistributionCommon Stock (80%) 4,32,000Revalution of Land 1,97,500Goodwill (Balance) 1,20,500.

On January 1, 20XI, Parent Company acquired 80 of the common stock .pdf

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On January 1, 20X4, Plimsol Company acquired 100 percent of Shipping Corporation\'s voting shares, at underlying book value. Plimsol uses the cost method in accounting for its investment in Shipping. Shipping\'s retained earnings was $75,000 on the date of acquisition. On December 31, 20X4, the data on the trial balances data for the two companies are as follows: Plimsol Co: Current Assets $100,000; Depreciable Assets $200,000; Investment in Shipping Corp. $125,000; Other Expenses $60,000; Depreciation Expense $20,000; Dividends declared $25,000; Current Liabilities $40,000; Long-term debt $75,000; Common Stock $100,000; Retained earnings $150,000; Sales $150,000; Dividend Revenue $15,000. Shipping Corp: Current Assets $75,000; Depreciable Assets $150,000; Other Expenses $45,000; Depreciation Expense $15,000; Dividends declared $15,000; Current Liabilities $25,000; Long-term debt $50,000; Common Stock $50,000; Retained earnings $75,000; Sales $10,000. Based on the information provided, what amount of retained earnings will be reported in the consolidated balance sheet prepared on December 31, 20X4? a. $235,000 b. $210,000 c. $310,000 d. $225,000 Solution Retained earnings of Shipping corporation at the date of acquisition =75000 Retained earnings of Plimsol Company at the end of the year =150000 This amount comprises 75000 of retained earnings acquired from the Shipping company Retained earnings of Shipping at the end of the year =75000 Total retained earnings at the end of the year =Retained earnings of Plimsol+ Retained earnings of Shipping corporation=150000+75000=225000.

On January 1, 20X4, Plimsol Company acquired 100 percent of Shipping.pdf

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On January 1, 2014 Leo Paid $15,000 for 5 percent of the stock in BLS, an S corporation. In November, he loaned $8,000 to BLS in return for a promissory note. BLS generated a $600,000 operating loss in 2014. a. How much of his share of the loss can leo deduct on his 2014 return? b. Compute Leo\'s basis in his BLS stock and his BLS note at the end of 2014. Solution Loss that leo can deduct on his 2014 return = 600000*5% i.e 30000 Basis in BSL stock = 15000 and promissory note = 8000.

On January 1, 2014 Leo Paid $15,000 for 5 percent of the stock in BL.pdf

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