Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Company A, Inc. is a distributor of office equipment. Company A has a wholly owned susidiary, JK, a equipment manufacturer. Company A has been talking to company B about forming a new business entity. Company B is also a distributor of office equipment, and has a wholly owned manufacturing subsidary called Nogo. Company A and B have agreed thet they will exchange their entire interest in their wholly owned subsidairies, jk and Nogo. This new corporation would recieve both subsidiaries and issue 50% stock to Company A, and 50% stock to company B. The Fair value of the net assets of each subsidiary exceeds its book value, and the relative net book values and fair values of the two subsidiarse are not proportional. However, through negotiation Company A and B believe their contributions to the newly formed corporation would be equal in value inspite of this disproportional relationship.
The fair value of a 50% interest in the new corporation would exceed the carrying value of Company A's investment in Company B.
1) Discuss how Co. A chould account for the exchnge of its wholly owned subsidiary, JK, for a 50% interest in the newly formed company?
2) Discuss how Co. A should account for its 50% interets in the newly formed corporation subsequent to the exchange?
3) Discuss how the newly formed corporation should account for the assets it recieved in the exchange transaction?
Amalgamation Problem
Access the financial statements and related disclosure notes of Google Inc. from its website at investor.google.com. In Google's balance sheet, deferred income taxes in 2010 are reported as both a current asset ($259 million) and a noncurrent asset (..
Should the 20%, 20%-50%, and over 50% levels of ownership be applied without exception as to the appropriate accounting treatment for stock investments? In other words, what other factors are considered in the determination of accounting treatment, a..
Which of the common deductions are allowed for both regular tax purposes and for AMT purposes?
During fiscal year 2012, Byrd Inc. wrote-off $8,000 of customer accounts as uncollectible. Which of the following items would be decreased by these write-offs?
How do i journalize this problem: Purchased 7,500 shares of Solstice Corp. at $40 per share, plus a $150 brokerage commission? The investment is classified as an available-for-sale investment.
Suppose a firm faces a current tax rate of 35% but expects this rate to fall to 20% in the future. Employees on average face a current marginal tax rate of 31% but expect this rate to fall to 20% when they retire in 15 years. The firm can earn 12% pr..
The EZ Credit Company offers to loan a college student $6,000 for school expenses. Repayment of the loan will be in monthly installments of $304.07 for 24 months. The total repayment of money is $7,297.68, which includes the original $6,000, $1,207.0..
Aaron, a resident of Minnesota, had been a driver for Green Delivery Service for the past six years. For this purpose, he leases a truck from Green, and his compensation is based on a percentage of the income resulting from his pickup and delivery se..
Coca Cola Audit Report Program- Create comprehensive work programs for the Inventory/ Warehousing. Include in this summary specific financial information gleaned from the current Form 10-K used to perform an analysis of work.
What was the hospital's original profit forecast (assume away any issues with depreciation, taxes, etc.)? Halfway through the fiscal year, what is the hospital's revised projection for FY11 profits?
The original cost was $2,000. They were billed $2,100 as there was a price increase. Illustrate what accounting entry will they make on June 18?
Mcneilly Inc. is considering using stocks of an old raw material in a special project. the special project would require all 220 kilograms of the raw material that are in stock and that originally cost the company $1,804 in total. What is the relevan..
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd