Reference no: EM133132514
Question - On January 1, 2017, Adora Corporation acquired 100 percent of the outstanding voting stock of Alvah Corporation for $2,099,600 cash. On the acquisition date, Alvah had the following balance sheet:
|
|
|
|
|
Cash
|
$152,000
|
Accounts payable
|
$184,000
|
|
Accounts receivable
|
137,000
|
Long-term debt
|
985,000
|
|
Land
|
730,000
|
Common stock
|
1,049,000
|
|
Equipment (net)
|
1,942,000
|
Retained earnings
|
743,000
|
|
$2,961,000
|
|
$2,961,000
|
At the acquisition date, the following allocation was prepared:
|
|
|
|
|
Fair value of consideration transferred
|
|
$2,099,600
|
|
Book value acquired
|
|
1,792,000
|
|
Excess fair value over book value
|
|
307,600
|
|
To in-process research and development
|
$44,000
|
|
|
To equipment (8-year remaining life)
|
133,600
|
177,600
|
|
To goodwill (indefinite life)
|
|
$130,000
|
Although at acquisition date Adora had expected $44,000 in future benefits from Alvah's in-process research and development project, by the end of 2017, it was apparent that the research project was failure with no future economic benefits. On December 31, 2018, Adora and Alvah submitted the following trial balances for consolidation. There were no intra-entity payables on that date.
|
Adora
|
Alvah
|
|
Sales
|
$(3,795,200)
|
$(1,166,250)
|
|
Cost of goods sold
|
1,810,000
|
745,000
|
|
Depreciation expense
|
335,000
|
147,000
|
|
Other operating expenses
|
223,000
|
37,250
|
|
Subsidiary income
|
(220,300)
|
0
|
|
Net income
|
$(1,647,500)
|
$(237,000)
|
|
Retained earnings 1/1/18
|
$(3,052,500)
|
$(936,000)
|
|
Net income
|
(1,647,500)
|
(237,000)
|
|
Dividends declared
|
300,000
|
26,225
|
|
Retained earnings 12/31/18
|
$(4,400,000)
|
$(1,146,775)
|
|
Cash
|
$110,025
|
$6,275
|
|
Accounts receivable
|
937,000
|
164,000
|
|
Inventory
|
908,000
|
613,000
|
|
Investment in GaugeRite
|
2,425,975
|
0
|
|
Land
|
3,120,000
|
760,000
|
|
Equipment (net)
|
5,180,000
|
1,942,500
|
|
Goodwill
|
354,000
|
0
|
|
Total assets
|
$13,035,000
|
$3,485,775
|
|
Accounts payable
|
$(220,000)
|
$(455,000)
|
|
Long-term debt
|
$(3,265,000)
|
$(835,000)
|
|
Common stock
|
(5,150,000)
|
$(1,049,000)
|
|
Retained earnings 12/31/18
|
(4,400,000)
|
$(1,146,775)
|
|
Total liabilities and equity
|
$(13,035,000)
|
$(3,485,775)
|
Required -
1. Show how Adora derived its December 31, 2018, Investment in Alvah account balance.
2. Prepare a consolidated worksheet for Adora and Alvah as of December 31, 2018.
|
Find most applicable to your life
: Which aspects of research methods did you find most applicable to your life? Name one or two issues that you would be interested in studying using research meth
|
|
Strategic alliances importance in health care organizations
: Explain strategic alliances' importance in health care organizations, specifically in the organization you researched.
|
|
Strategic alliances importance in health care organizations
: Discuss different types of strategic alliances that organization your research used/uses. Explain strategic alliances' importance in health care organizations
|
|
Strategic capacity planning to strategic management process
: One of changes in strategic planning process, because of project management is the addition of strategic capacity planning to the strategic management process
|
|
Prepare a consolidated worksheet for Adora and Alvah
: On December 31, 2018, Adora and Alvah submitted the following trial balances for consolidation. Prepare a consolidated worksheet for Adora and Alvah
|
|
What is the marginal cost of producing 10 units
: Suppose the cost function is C(Q)=50 +Q-10Q2+2Q3. What is the marginal cost of producing 10 units?
|
|
Find the number of avocados
: 1. You have an avocado tree, which grows 100 avocados this year, 50 next year. Your neighbor has an avocado tree, which grows 0 avocados this year, 150 next yea
|
|
What is the logic behind the multiplier
: Under the 2020 CARES Act, the U.S. government distributed checks of $1,200 per qualifying individual. Married couples making up to $150,000 and single individua
|
|
Overview of the philippine culture
: Micro level causes would be social practices and social relations occurring within an immediate environment that result either to positive or negative situation
|