1) Video Company acquired 100 percent of the voting common shares of Signature Corporation, by issuing bonds with a par value and fair value of $150,000. Immediately prior to the acquisition, Video reported total assets of $500,000, liabilities of $280,000, and stockholders' equity of $220,000. At that date, Signature reported total assets of $400,000, liabilities of $250,000, and stockholders' equity of $150,000. Included in Signature's liabilities was an account payable to Video in the amount of $20,000, which Video included in its accounts receivable. Based on the preceding information, what amount of total assets did Video report in its balance sheet immediately after the acquisition?
2) Big-Town Retail owns 80 percent of Small-Town Corporation's common stock. For the current financial year, Big-Town and Small-Town reported sales of $500,000 and $320,000 and expenses of $280,000 and $240,000, respectively. Based on the preceding information, what is the amount of net income to be reported in the consolidated income statement for the year under the proprietary theory approach?
3) Alma Corporation purchased 75 percent of Johnson's common stock for $262,500, which was acquired at book value. The fair value of the noncontrolling interest at the date of acquisition was equal to their proportionate share of the book value of Johnson Company. During the year, Johnson reports net income of $40,000, while Alma reports earnings of $200,000 from its own operations. Alma pays dividends during the year of $50,000, and Johnson pays dividends of $10,000. On January 1, Alma has a retained earnings balance of $500,000 while Johnson has retained earnings of $300,000. Alma accounts for its investment in Johnson using the equity method. Alma Corporation reports the following for investment in Johnson's stock prior to consolidation:
4) Big-Town Retail owns 80 percent of Small-Town Corporation's common stock. For the current financial year, Big-Town and Small-Town reported sales of $500,000 and $320,000 and expenses of $280,000 and $240,000, respectively. Based on the preceding information, what is the amount of net income to be reported in the consolidated income statement for the year under the entity theory approach?
5) Alma Corporation purchased 75 percent of Johnson's common stock for $262,500, which was acquired at book value. The fair value of the noncontrolling interest at the date of acquisition was equal to their proportionate share of the book value of Johnson Company. During the year, Johnson reports net income of $40,000, while Alma reports earnings of $200,000 from its own operations. Alma pays dividends during the year of $50,000, and Johnson pays dividends of $10,000. On January 1, Alma has a retained earnings balance of $500,000 while Johnson has retained earnings of $300,000. Alma accounts for its investment in Johnson using the equity method. Consolidated retained earnings as of the end of the year is:
6) Alma Corporation purchased 75 percent of Johnson's common stock for $262,500, which was acquired at book value. The fair value of the noncontrolling interest at the date of acquisition was equal to their proportionate share of the book value of Johnson Company. During the year, Johnson reports net income of $40,000, while Alma reports earnings of $200,000 from its own operations. Alma pays dividends during the year of $50,000, and Johnson pays dividends of $10,000. On January 1, Alma has a retained earnings balance of $500,000 while Johnson has retained earnings of $300,000. Alma accounts for its investment in Johnson using the equity method. What is the total differential assuming Alma paid fair value of $300,000 for 75 percent ownership of Johnson while Johnson's book value was $350,000?
7) Video Company acquired 100 percent of the voting common shares of Signature Corporation, by issuing bonds with a par value and fair value of $150,000. Immediately prior to the acquisition, Video reported total assets of $500,000, liabilities of $280,000, and stockholders' equity of $220,000. At that date, Signature reported total assets of $400,000, liabilities of $250,000, and stockholders' equity of $150,000. Included in Signature's liabilities was an account payable to Video in the amount of $20,000, which Video included in its accounts receivable. Based on the preceding information, what amount of total assets was reported in the consolidated balance sheet immediately after acquisition?
8) Alma Corporation purchased 75 percent of Johnson's common stock for $262,500, which was acquired at book value. The fair value of the noncontrolling interest at the date of acquisition was equal to their proportionate share of the book value of Johnson Company. During the year, Johnson reports net income of $40,000, while Alma reports earnings of $200,000 from its own operations. Alma pays dividends during the year of $50,000, and Johnson pays dividends of $10,000. On January 1, Alma has a retained earnings balance of $500,000 while Johnson has retained earnings of $300,000. Alma accounts for its investment in Johnson using the equity method. Consolidated net income for the year is:
9) On December 31, 2008, Kohler Corporation acquired 75 percent of Synergy Company's common stock for $150,000. At that date, the fair value of the noncontrolling interest was $50,000. Of the $70,000 differential, $10,000 related to the increased value of Synergy's inventory, $20,000 related to the increased value of its land, and $25,000 related to the increased value of its equipment that had a remaining life of 10 years from the date of combination. Synergy sold all inventory it held at the end of 2008 during 2009. The land to which the differential related was also sold during 2009 for a large gain. At the date of combination, Synergy reported retained earnings of $80,000 and common stock outstanding of $50,000. In 2009, Synergy reported net income of $60,000, but paid no dividends. Kohler accounts for its investment in Synergy using the equity method. Based on the preceding information, what is the amount of write-off of differential associated with this acquisition recorded by Kohler during 2009?