User Account

All Pages

Discuss what investment accounting method does hiram use

Assignment Help Accounting Basics
Reference no: EM131812349

On january 1,2013, hiram corporation acquired all the outstanding stock of terrrier company, by issuing 9000 shares of its $30 par value
Common stock. At the acquisition date, the stock was trading at $50 per share. Additionally.hiram paid $10,000 to sandler o'neal to represent them in the transaction and $10,000 to kpmg for accounting services.

At january 1, 2013, terrier had retained earnings of $230,000 and total book value of $360,000. Your ananlysis of terrier's assets and
Liabilities revealed that its property, plant and equipment was undervalued by $60,000 and has a remaining useful life of 6 years. Terrier
Also has a trademark that you determined has a fair value of$30,000 with a ten year life

Required: prepare the journal entry to record the above purchase, if you decide to keep terrier as a separate entity.

Determine the amount of the excess purchase price and how the excess is allocated

Following are the separate financial statements for hiram and terrier as of december 31,2013. Prepare a consolidation worksheet

For these two companies as of December 31,2013

  Hiram Terrier
Income statement Dr Cr
Revenues 610000 370000
Expenses 385000 220000
Dividend income 5000  
   net income 230000 150000
     
Retained earnings    
Rfetained earnings boy 880000 230000
Net income 230000 150000
Dividends paid 90000 5000
Retained earnings eoy 1020000 375000
     
Balance sheet    
Cash 130000 15000
Receivables 380000 220000
Inventory 560000 280000
Investment in sub 450000  
     
Land 460000 240000
Property, plant , equipment 920000 220000
  total assets 2900000 975000
     
Liabilities 780000 470000
Common stock 800000 100000
Paid in capital 300000 30000
Retained earnings 12/31/2007 1020000 375000
  total liabilities and equity 2900000 975000

What investment accounting method does hiram use to account for its investment in terrier? How do you know?

Reference no: EM131812349

Questions Cloud

Calculate the receivables turnover and average collection : Calculate the receivables turnover and average collection period for both companies. The industry average for the receivables turnover was 7.5 times
Find the selection probability for each city : A certain country has four regions: North, East, South, and West. The populations of these regions are 3 million, 4 million, 5 million, and 8 million.
Compute the expected percentage increase : Compute the expected percentage increase in net income for 2017.
Determine the net present value for machine : Determine the net present value for each machine if the required rate of return is 10 percent. (Ignore taxes.)
Discuss what investment accounting method does hiram use : What investment accounting method does hiram use to account for its investment in terrier. How do you know
Find probability that the first successes are simultaneous : For p1 = p2, find the probability that their first successes are simultaneous, and use this to find the probability that Nick's first success precedes Penny's.
What is meant by the theory of reciprocal demand : MFE 6400 - Identify the commodity in which the U.S. and Mexico have a comparative advantage and What is meant by the theory of reciprocal demand
Find the average number of people who draw their own names : Each of n = 2 people puts his or her name on a slip of paper (no two have the same name). The slips of paper are shuffled in a hat, and then each person draws.
Would you purchase items from the web : How you would feel if there were no rules regarding how your credit card information was stored on merchants' Web sites. Would you purchase items from the Web?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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