Solution-Prepare the journal entry to record Sonic

Prepare the journal entry to record Sonic acquisition

Assignment Help Accounting Basics

Reference no: EM133099244

Question - Sonic Enterprises Inc has decided to purchase 100% of the voting shares of Jackson Inc. for $300,000 in cash on May 1, 2019. On the date, the balance sheets of each of these companies were as follows:

	Sonic Inc	Jackson Inc
Cash and Short-Term Securities	$750,000	$30,000
Inventory	$60,000	$20,000
Plant and Equipment (net)	$280,000	$140,000
Total Assets	$1,090,000	$190,000
Current Liabilities	$150,000	$25,000
Bonds Payable	$120,000	$30,000
Common Shares	$120,000	$70,000
Retained Earnings	$700,000	$65,000
Total Liabilities and Equity	$1,090,000	$190,000

On that date, the fair values of Jackson's assets and liabilities were as follows:

Cash and Short-Term Securities	$40,000
Inventory	$15,000
Plant and Equipment (net)	$250,000
Current Liabilities	$25,000
Bonds Payable	$25,000

Sonic's Book Values approximated their Fair Values on that date.

Required -

a) Calculate the amount of Goodwill arising from this combination.

b) Prepare the journal entry to record Sonic's acquisition of Jackson's Shares.

c) Prepare Sonic's Consolidated Balance Sheet immediately following its acquisition of Jackson's assets.

Reference no: EM133099244

Questions Cloud

Formal traditional letter : You have been hired by a Fortune 500 company and you are writing a letter to the employees you will be leading.

Analyse kinetic data that relate to catalytic reactions : Construct catalytic cycles using fundamental organometallic reaction steps and Understand how p-block metals can be used to effect catalytic transformations

Demonstrate awareness of the enzymatic transformations : Demonstrate awareness of the enzymatic transformations of biosynthesis and Describe modern methods for engineering metabolic pathways

Determine the total ordering and carrying costs of Material : The ordering cost is P500 while the cost to carry the inventory is 20% of the material costs. Determine the total ordering and carrying costs of Material 123

Prepare the journal entry to record Sonic acquisition : Sonic's Book Values approximated their Fair Values on that date. Prepare the journal entry to record Sonic's acquisition of Jackson's Shares

Understand the dynamic nature of many metal complexes : Understand the dynamic nature of many metal complexes, and relate this to observed reactivity patterns

Prepare Jean Inc consolidated balance sheet : Assuming the above balance sheets were prepared immediately before the acquisition, prepare Jean Inc's consolidated balance sheet on the date of acquisition

Underpin the design of imaging agents : Understand how spectroscopic techniques can be used to underpin the design of imaging agents - pros and cons of different classes of metal complex species

Strategies of stereoselective alkene functionalization : Recognize where organocatalysis can be applied in synthesis and which strategies in this area are available - significant benefit to a desired reaction outcome

User Account

All Pages

Prepare the journal entry to record Sonic acquisition

Reference no: EM133099244

Reference no: EM133099244

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT