User Account

All Pages

Allocate and depreciate difference between implied and book

Assignment Help Accounting Basics
Reference no: EM13130562

Pullman Corporation acquired a 90% interest in Sleeper Company for $6,500,000 on January 1 2010. At that time Sleeper Company had common stock of $4,500,000 and retained earnings of $1,800,000. The balance sheet information available for Sleeper Company on January 1, 2010, showed the following:

Book Value Fair Value
Inventory (FIFO) $1,300,000 $1,500,000
Equipment (net) 1,500,000 1,900,000
Land 3,000,000 3,000,000

The equipment had a remaining useful life of ten years. Sleeper Company reported $240,000 of net income in 2010 and declared $60,000 of dividends during the year.

Required:
Prepare the workpaper entries assuming the cost method is used, to eliminate dividends, eliminate the investment account, and to allocate and depreciate the difference between implied and book value for 2010.

Reference no: EM13130562

Questions Cloud

How many moles of na2so3 were added to the calorimeter cup : How many moles of Na2SO3 were added to the calorimeter cup if 40.0mL 0.50 M NaOCl and 60.0mL 0.50 M Na2SO3 were combined?
Determining return on common stockholders equity : What is the return on common stockholders' equity?
What is the end of project cash flow : A firm believes it can generate an additional $250,000 per year in revenues for the next 5 years if it replaces existing equipment with new equipment that costs $210,000.
How long will it take oxygen gas to effuse : How long will it take 10.0 mL of oxygen gas to effuse through a porous barrier if it has been observed that 81.7 minutes are required for 10.0 mL of Cl2 gas to effuse through the same barrier?
Allocate and depreciate difference between implied and book : Pullman Corporation acquired a 90% interest in Sleeper Company for $6,500,000 on January 1 2010. At that time Sleeper Company had common stock of $4,500,000 and retained earnings of $1,800,000.
Which type is generally viewed as more reliable : Auditing standards require the confirmation of accounts receivable in normal circumstances. What are the three exceptions to this requirement? Or describe the differences between positive and negative confirmations. Which type is generally viewe..
Minimax and decision tree payoff questions : For a given event, if the payoffs for alternatives 1, 2, and 3 (the only alternatives) are 50, 125, and -50 respectively, what is the regret associated with alternative 1?
Balance sheet of starbucks company : If your are one of the audit team members who is auditing Starbucks company, suggest some procedures you think the audit team would use to complete their audit work on the the inventory accounts on the balance sheet of Starbucks company.
Compute the concentration and the stoichiometry : The volume of potassium permanganate required to titrate 10 mL of the new hydrogen peroxide (mL):20mL (c) Calculate the concentration of H2O2 from the volume of KMnO4 used and the stoichiometry of the reaction (MW of H2O2 is 34.01).

Reviews

Write a Review

Accounting Basics Questions & Answers

  Is any stakeholder harmed if brucki preference is used

The market value of Lake Corporation's inventory has declined below its cost. Vickie Maher, the controller, wants to use the allowance method to write down inventory because it more clearly discloses the decline in market value, and it does not di..

  Position with a major accounting firm

Jerry recently was offered a position with a major accounting firm. The firm offered Jerry either a signing bonus of $23,000 payable on the first day of work or a signing bonus of $26,000 payable after one year of employment.

  Elements for action which is based on strict liability

Eagle Tools, Inc., the manufacturer of the gun, for product liability, on the ground of strict liability. What are the elements for an action based on strict liability? In whose favor is the court likely to rule?

  Define total expected dollar sales for next period

Greenspan Company management predicts $500,000 of variable costs, $800,000 of fixed costs, and a pretax income of $100,000 in the next period. Management also predicts that the contribution margin per unit will be $60.

  What are the son and daughter bases in the stock

Hobbes gave his son ABC stock valued at $100,000 that he purchased for $60,000 and his daughter EFG stock valued at $100,000 that he purchased for $250,000. Hobbes paid $30,000 in gift taxes on each of these gifts. What are the son's and daughter'..

  Determine the direct labor efficiency variance

Explorer, Inc., manufactures lanterns for camping. The company's direct labor rates have been set by the terms of the current labor contract. Direct labor rate standards have been assigned for each job classification.

  Corporate deductions-corporate transactions

Speculate about which specific types of corporate deductions are most likely to result in an IRS audit and what precautions should be taken to minimize the risk of audit. Provide a rationale for your response.

  Net increase or decrease in cost

It is estimated that variable manufacturing costs will be reduced from $26,000 to $23,500 annually if the new machine is purchased. The total net increase or decrease in cost for the new equipment for the entire five years is ??

  Amount of return on investment and residual income

Compute the sales level that would generate a 20% return on investment. Supposing the rate of return is 15%, determine the level of sales that would generate $200,000 of residual income.

  Journalizing the adjusting entry

The records of Nevada Co. indicated that $420,000 of merchandise should be on hand on December 31, 2010. The physical inventory indicates that $370,000 of merchandise is actually on hand. Journalize the adjusting entry for the inventory shrinkage ..

  Homeowner interest tax credit

What are the pros and cons of this tax credit? Why is this issue of any interest to the NAHB?

  Roi and residual income-missing data

The following data pertain to three divisions of Nevada Aggregates, Inc. The company's required rate of return on invested capital is 8 percent.

Free Assignment Quote

Assured A++ Grade

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd