Questions from Financial Accounting

Q: The following financial statement information was prepared for Blue Corporation and Sparse

The following financial statement information was prepared for Blue Corporation and Sparse Company at December 31, 20X2: Blue and Sparse agreed to combine as of January 1, 20X3. To effect the merger...

Q: On July 1, 20X2, Alan Enterprises merged with Cherry Corporation

On July 1, 20X2, Alan Enterprises merged with Cherry Corporation through an exchange of stock and the subsequent liquidation of Cherry. Alan issued 200,000 shares of its stock to effect the combinatio...

Q: Winston Corporation purchased 40 percent of the stock of Fullbright Company on

Winston Corporation purchased 40 percent of the stock of Fullbright Company on January 1, 20X2, at underlying book value. The companies reported the following operating results and dividend payments d...

Q: Phillips Company bought 40 percent ownership in Jones Bag Company on January

Phillips Company bought 40 percent ownership in Jones Bag Company on January 1, 20X1, at underlying book value. In 20X1, 20X2, and 20X3, Jones Bag reported the following: The balance in Phillips Com...

Q: Lead Corporation established a new subsidiary and transferred to it assets with

Lead Corporation established a new subsidiary and transferred to it assets with a cost of $90,000 and a book value of $75,000. The assets had a fair value of $100,000 at the time of transfer. The tran...

Q: Ravine Corporation purchased 30 percent ownership of Valley Industries for $90

Ravine Corporation purchased 30 percent ownership of Valley Industries for $90,000 on January 1, 20X6, when Valley had capital stock of $240,000 and retained earnings of $60,000. The following data we...

Q: Port Company purchased 30,000 of the 100,000 outstanding

Port Company purchased 30,000 of the 100,000 outstanding shares of Sund Company common stock on January 1, 20X2, for $180,000. The purchase price was equal to the book value of the shares purchased. S...

Q: Grandview Company purchased 40 percent of the stock of Spinet Corporation on

Grandview Company purchased 40 percent of the stock of Spinet Corporation on January 1, 20X8, at underlying book value. Spinet recorded the following income for 20X9: Income before Extraordinary Gain...

Q: Small Company reported 20X7 net income of $40,000 and

Small Company reported 20X7 net income of $40,000 and paid dividends of $15,000 during the year. Mock Corporation acquired 20 percent of Small’s shares on January 1, 20X7, for $105,000. At December 31...

Q: Kent Company purchased 35 percent ownership of Lomm Company on January 1

Kent Company purchased 35 percent ownership of Lomm Company on January 1, 20X8, for $140,000. Lomm reported 20X8 net income of $80,000 and paid dividends of $20,000. At December 31, 20X8, Kent determi...