Assignment Instructions

Ex1 Required information Use the following information to answer questions 15-18 [The following information applies to the questions displayed below.] On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $50 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts. TruData Webstat Webstat Book Values Book Values Fair Values Revenues (1/1 to 7/1) $ (288,200 ) $ (172,000 ) Expenses (1/1 to 7/1) 192,000 86,000 Retained earnings, 1/1 (134,000 ) (140,000 ) Cash and receivables 168,000 76,000 $ 76,000 Inventory 186,000 148,000 170,000 Patented technology (net) 228,000 178,000 202,000 Land 382,000 198,000 238,000 Buildings and equipment (net) 102,000 90,000 90,000 Liabilities (532,000 ) (370,000 ) (346,000 ) Common stock (294,000 ) (62,000 ) Additional paid-in capital (9,800 ) (32,000 ) ________________________________________ rev: 05_10_2017_QC_CS-88998, 05_18_2017_QC_CS-89463 Problem 2-15 (LO 2-5, 2-9, 2-10) On its acquisition-date consolidated balance sheet, what amount should TruData report as goodwill? Multiple Choice • $0. • $344,000. • $70,000. • $180,000. Ex2 Required information Use the following information to answer questions 15-18 [The following information applies to the questions displayed below.] On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $50 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts. TruData Webstat Webstat Book Values Book Values Fair Values Revenues (1/1 to 7/1) $ (288,200 ) $ (172,000 ) Expenses (1/1 to 7/1) 192,000 86,000 Retained earnings, 1/1 (134,000 ) (140,000 ) Cash and receivables 168,000 76,000 $ 76,000 Inventory 186,000 148,000 170,000 Patented technology (net) 228,000 178,000 202,000 Land 382,000 198,000 238,000 Buildings and equipment (net) 102,000 90,000 90,000 Liabilities (532,000 ) (370,000 ) (346,000 ) Common stock (294,000 ) (62,000 ) Additional paid-in capital (9,800 ) (32,000 ) ________________________________________ rev: 05_10_2017_QC_CS-88998, 05_18_2017_QC_CS-89463 Problem 2-16 (LO 2-5) On its acquisition-date consolidated balance sheet, what amount should TruData report as patented technology (net)? Multiple Choice • $430,000. • $202,000. • $228,000. • • $418,000. • Ex3 Required information Use the following information to answer questions 15-18 [The following information applies to the questions displayed below.] On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $50 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts. TruData Webstat Webstat Book Values Book Values Fair Values Revenues (1/1 to 7/1) $ (288,200 ) $ (172,000 ) Expenses (1/1 to 7/1) 192,000 86,000 Retained earnings, 1/1 (134,000 ) (140,000 ) Cash and receivables 168,000 76,000 $ 76,000 Inventory 186,000 148,000 170,000 Patented technology (net) 228,000 178,000 202,000 Land 382,000 198,000 238,000 Buildings and equipment (net) 102,000 90,000 90,000 Liabilities (532,000 ) (370,000 ) (346,000 ) Common stock (294,000 ) (62,000 ) Additional paid-in capital (9,800 ) (32,000 ) ________________________________________ rev: 05_10_2017_QC_CS-88998, 05_18_2017_QC_CS-89463 Problem 2-17 (LO 2-5, 2-7) On its acquisition-date consolidated balance sheet, what amount should TruData report as common stock? Multiple Choice • $294,000. • $62,000. • $344,000. • $356,000. Ex4 Required information Use the following information to answer questions 15-18 [The following information applies to the questions displayed below.] On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $50 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts. TruData Webstat Webstat Book Values Book Values Fair Values Revenues (1/1 to 7/1) $ (288,200 ) $ (172,000 ) Expenses (1/1 to 7/1) 192,000 86,000 Retained earnings, 1/1 (134,000 ) (140,000 ) Cash and receivables 168,000 76,000 $ 76,000 Inventory 186,000 148,000 170,000 Patented technology (net) 228,000 178,000 202,000 Land 382,000 198,000 238,000 Buildings and equipment (net) 102,000 90,000 90,000 Liabilities (532,000 ) (370,000 ) (346,000 ) Common stock (294,000 ) (62,000 ) Additional paid-in capital (9,800 ) (32,000 ) ________________________________________ rev: 05_10_2017_QC_CS-88998, 05_18_2017_QC_CS-89463 Problem 2-18 (LO 2-5, 2-7) On its acquisition-date consolidated balance sheet, what amount should TruData report as retained earnings as of July 1? Multiple Choice • $298,000. • $230,200. • $586,200. • $134,000. Ex5 Problem 2-22 (LO 2-6a, 2-6b) The following book and fair values were available for Westmont Company as of March 1. Book Value Fair Value Inventory $ 609,250 $ 572,250 Land 755,250 1,050,000 Buildings 1,800,000 2,152,500 Customer relationships 0 849,750 Accounts payable (91,000 ) (91,000 ) Common stock (2,000,000 ) Additional paid-in capital (500,000 ) Retained earnings 1/1 (416,500 ) Revenues (481,500 ) Expenses 324,500 ________________________________________ Arturo Company pays $4,150,000 cash and issues 20,900 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont’s common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $28,600 and Arturo pays $44,600 for legal fees to complete the transaction. Prepare Arturo’s journal entry to record its acquisition of Westmont. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.) Ex6 Required information Use the following information to answer questions 19-20 [The following information applies to the questions displayed below.] The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are as follows: BALANCE SHEETS December 31, 2017 Patrick Sean Cash $ 74,000 $ 52,000 Accounts receivable (net) 130,000 40,000 Inventories 86,000 72,000 Plant and equipment (net) 622,000 278,000 Investment in Sean 468,000 – Total assets $ 1,380,000 $ 442,000 Accounts payable 156,000 84,000 Long-term debt 116,000 20,000 Common stock ($10 par) 308,000 44,000 Additional paid-in capital 10,000 Retained earnings 800,000 284,000 Total liabilities and shareholders’ equity $ 1,380,000 $ 442,000 ________________________________________ Additional Information: • On December 31, 2017, Patrick acquired 100 percent of Sean’s voting stock in exchange for $468,000. • At the acquisition date, the fair values of Sean’s assets and liabilities equaled their carrying amounts, respectively, except that the fair value of certain items in Sean’s inventory were $22,000
more than their carrying amounts. Problem 2-19 (LO 2-4, 2-5) In the December 31, 2017, consolidated balance sheet of Patrick and its subsidiary, what amount of total assets should be reported?-88999 • $1,380,000 • $1,360,000 • $1,952,000 • $1,484,000 Ex7 Required information Use the following information to answer questions 19-20 [The following information applies to the questions displayed below.] The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are as follows: BALANCE SHEETS December 31, 2017 Patrick Sean Cash $ 74,000 $ 52,000 Accounts receivable (net) 130,000 40,000 Inventories 86,000 72,000 Plant and equipment (net) 622,000 278,000 Investment in Sean 468,000 – Total assets $ 1,380,000 $ 442,000 Accounts payable 156,000 84,000 Long-term debt 116,000 20,000 Common stock ($10 par) 308,000 44,000 Additional paid-in capital 10,000 Retained earnings 800,000 284,000 Total liabilities and shareholders’ equity $ 1,380,000 $ 442,000 ________________________________________ Additional Information: • On December 31, 2017, Patrick acquired 100 percent of Sean’s voting stock in exchange for $468,000. • At the acquisition date, the fair values of Sean’s assets and liabilities equaled their carrying amounts, respectively, except that the fair value of certain items in Sean’s inventory were $22,000 more than their carrying amounts. Problem 2-20 (LO 2-4, 2-5) In the December 31, 2017, consolidated balance sheet of Patrick and its subsidiary, what amount of total stockholders’ equity should be reported? Multiple Choice • $1,130,000 • $1,108,000 • $1,086,000 • $1,346,000 Ex8 Problem 2-11 (LO 2-5) On June 1, Cline Co. paid $966,500 cash for all of the issued and outstanding common stock of Renn Corp. The carrying amounts for Renn’s assets and liabilities on June 1 follow: Cash $ 151,000 Accounts receivable 205,500 Capitalized software costs 332,000 Goodwill 189,000 Liabilities (135,000 ) Net assets $ 742,500 ________________________________________ On June 1, Renn’s accounts receivable had a fair value of $145,000. Additionally, Renn’s in-process research and development was estimated to have a fair value of $252,000. All other items were stated at their fair values. On Cline’s June 1 consolidated balance sheet, how much is reported for goodwill? Multiple Choice • $332,000. • $161,000. • $28,000. • $221,500 Ex9 Required information Use the following information to answer questions 12-13 [The following information applies to the questions displayed below.] On May 1, Donovan Company reported the following account balances: Current assets $ 114,500 Buildings & equipment (net) 223,000 Total assets $ 337,500 Liabilities $ 64,500 Common stock 150,000 Retained earnings 123,000 Total liabilities and equities $ 337,500 ________________________________________ On May 1, Beasley paid $451,800 in stock (fair value) for all of the assets and liabilities of Donovan, which will cease to exist as a separate entity. In connection with the merger, Beasley incurred $17,000 in accounts payable for legal and accounting fees. Beasley also agreed to pay $82,900 to the former owners of Donovan contingent on meeting certain revenue goals during the following year. Beasley estimated the present value of its probability adjusted expected payment for the contingency at $21,100. In determining its offer, Beasley noted the following: • Donovan holds a building with a fair value $38,600 more than its book value. • Donovan has developed unpatented technology appraised at $27,700, although is it not recorded in its financial records. • Donovan has a research and development activity in process with an appraised fair value of $49,200. The project has not yet reached technological feasibility. • Book values for Donovan’s current assets and liabilities approximate fair values. Problem 2-12 (LO 2-4, 2-5) 12. What should Beasley record as total liabilities incurred or assumed in connection with the Donovan merger? Multiple Choice • $81,500. • $102,600. • $150,000. • $17,000. Ex10 Required information Use the following information to answer questions 12-13 [The following information applies to the questions displayed below.] On May 1, Donovan Company reported the following account balances: Current assets $ 114,500 Buildings & equipment (net) 223,000 Total assets $ 337,500 Liabilities $ 64,500 Common stock 150,000 Retained earnings 123,000 Total liabilities and equities $ 337,500 ________________________________________ On May 1, Beasley paid $451,800 in stock (fair value) for all of the assets and liabilities of Donovan, which will cease to exist as a separate entity. In connection with the merger, Beasley incurred $17,000 in accounts payable for legal and accounting fees. Beasley also agreed to pay $82,900 to the former owners of Donovan contingent on meeting certain revenue goals during the following year. Beasley estimated the present value of its probability adjusted expected payment for the contingency at $21,100. In determining its offer, Beasley noted the following: • Donovan holds a building with a fair value $38,600 more than its book value. • Donovan has developed unpatented technology appraised at $27,700, although is it not recorded in its financial records. • Donovan has a research and development activity in process with an appraised fair value of $49,200. The project has not yet reached technological feasibility. • Book values for Donovan’s current assets and liabilities approximate fair values. Problem 2-13 (LO 2-5, 2-8) 13. How much should Beasley record as total assets acquired in the Donovan merger? Multiple Choice • $472,900. • $537,400. • $451,800. • $517,600.. Ex1
Required information
Use the following information to answer questions 15-18
[The following information applies to the questions displayed below.]
 
On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $50 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts.
 

 TruData Webstat Webstat
 Book Values Book Values Fair Values
Revenues (1/1 to 7/1)$(288,200) $(172,000)    
Expenses (1/1 to 7/1) 192,000   86,000     
Retained earnings, 1/1 (134,000)  (140,000)    
Cash and receivables 168,000   76,000  $76,000 
Inventory 186,000   148,000   170,000 
Patented technology (net) 228,000   178,000   202,000 
Land 382,000   198,000   238,000 
Buildings and equipment (net) 102,000   90,000   90,000 
Liabilities (532,000)  (370,000)  (346,000)
Common stock (294,000)  (62,000)    
Additional paid-in capital (9,800)  (32,000)    

rev: 05_10_2017_QC_CS-88998, 05_18_2017_QC_CS-89463
Problem 2-15 (LO 2-5, 2-9, 2-10)
On its acquisition-date consolidated balance sheet, what amount should TruData report as goodwill?
Multiple Choice
Top of Form
$0.
$344,000.
$70,000.
$180,000.
Bottom of Form
 
 
 
 
 
Ex2
 
 
Required information
Use the following information to answer questions 15-18
[The following information applies to the questions displayed below.]
 
On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $50 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts.
 

 TruData Webstat Webstat
 Book Values Book Values Fair Values
Revenues (1/1 to 7/1)$(288,200) $(172,000)    
Expenses (1/1 to 7/1) 192,000   86,000     
Retained earnings, 1/1 (134,000)  (140,000)    
Cash and receivables 168,000   76,000  $76,000 
Inventory 186,000   148,000   170,000 
Patented technology (net) 228,000   178,000   202,000 
Land 382,000   198,000   238,000 
Buildings and equipment (net) 102,000   90,000   90,000 
Liabilities (532,000)  (370,000)  (346,000)
Common stock (294,000)  (62,000)    
Additional paid-in capital (9,800)  (32,000)    

rev: 05_10_2017_QC_CS-88998, 05_18_2017_QC_CS-89463
Problem 2-16 (LO 2-5)
On its acquisition-date consolidated balance sheet, what amount should TruData report as patented technology (net)?
Multiple Choice
Top of Form
$430,000.
$202,000.
$228,000.

  • $418,000.

Bottom of Form
 
 
Ex3
 
 
Required information
Use the following information to answer questions 15-18
[The following information applies to the questions displayed below.]
 
On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $50 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts.
 

 TruData Webstat Webstat
 Book Values Book Values Fair Values
Revenues (1/1 to 7/1)$(288,200) $(172,000)    
Expenses (1/1 to 7/1) 192,000   86,000     
Retained earnings, 1/1 (134,000)  (140,000)    
Cash and receivables 168,000   76,000  $76,000 
Inventory 186,000   148,000   170,000 
Patented technology (net) 228,000   178,000   202,000 
Land 382,000   198,000   238,000 
Buildings and equipment (net) 102,000   90,000   90,000 
Liabilities (532,000)  (370,000)  (346,000)
Common stock (294,000)  (62,000)    
Additional paid-in capital (9,800)  (32,000)    

rev: 05_10_2017_QC_CS-88998, 05_18_2017_QC_CS-89463
Problem 2-17 (LO 2-5, 2-7)
On its acquisition-date consolidated balance sheet, what amount should TruData report as common stock?
Multiple Choice
Top of Form
$294,000.
$62,000.
$344,000.
$356,000.
Bottom of Form
 
 
 
 
 
Ex4
 
 
 
Required information
Use the following information to answer questions 15-18
[The following information applies to the questions displayed below.]
 
On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $50 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts.
 

 TruData Webstat Webstat
 Book Values Book Values Fair Values
Revenues (1/1 to 7/1)$(288,200) $(172,000)    
Expenses (1/1 to 7/1) 192,000   86,000     
Retained earnings, 1/1 (134,000)  (140,000)    
Cash and receivables 168,000   76,000  $76,000 
Inventory 186,000   148,000   170,000 
Patented technology (net) 228,000   178,000   202,000 
Land 382,000   198,000   238,000 
Buildings and equipment (net) 102,000   90,000   90,000 
Liabilities (532,000)  (370,000)  (346,000)
Common stock (294,000)  (62,000)    
Additional paid-in capital (9,800)  (32,000)    

rev: 05_10_2017_QC_CS-88998, 05_18_2017_QC_CS-89463
Problem 2-18 (LO 2-5, 2-7)
On its acquisition-date consolidated balance sheet, what amount should TruData report as retained earnings as of July 1?
Multiple Choice
Top of Form
$298,000.
$230,200.
$586,200.
$134,000.
Bottom of Form
 
 
 
Ex5
 
 
 
 

Problem 2-22 (LO 2-6a, 2-6b)

The following book and fair values were available for Westmont Company as of March 1.
 

 Book ValueFair Value
Inventory$609,250 $572,250 
Land 755,250  1,050,000 
Buildings 1,800,000  2,152,500 
Customer relationships 0  849,750 
Accounts payable (91,000) (91,000)
Common stock (2,000,000)   
Additional paid-in capital (500,000)   
Retained earnings 1/1 (416,500)   
Revenues (481,500)   
Expenses 324,500    

 
Arturo Company pays $4,150,000 cash and issues 20,900 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont’s common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $28,600 and Arturo pays $44,600 for legal fees to complete the transaction.
 
Prepare Arturo’s journal entry to record its acquisition of Westmont. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)
 
Ex6
Required information
Use the following information to answer questions 19-20
[The following information applies to the questions displayed below.]
 
The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are as follows:
 

BALANCE SHEETS
December 31, 2017
 Patrick Sean
Cash$74,000  $52,000 
Accounts receivable (net) 130,000   40,000 
Inventories 86,000   72,000 
Plant and equipment (net) 622,000   278,000 
Investment in Sean 468,000    
Total assets$1,380,000  $442,000 
Accounts payable 156,000   84,000 
Long-term debt 116,000