User Account

All Pages

Prepare the journal entry to record the change in fair value

Assignment Help Financial Accounting
Reference no: EM13851549

Pritano Company acquired all the net assets of Succo Company on December 31, 2013, for $2,160,000 cash. The balance sheet of Succo Company immediately prior to the acquisition showed: Book value Fair value Current assets $ 960,000 $ 960,000 Plant and equipment 1,080,000 1,440,000 Total $2,040,000 $2,400,000 Liabilities $ 180,000 $ 216,000 Common stock 480,000 Other contributed capital 600,000 Retained earnings 780,000 Total $2,040,000 As part of the negotiations, Pritano agreed to pay the stockholders of Succo $360,000 cash if the post-combination earnings of Pritano averaged $2,160,000 or more per year over the next two years. The estimated fair value of the contingent consideration was $144,000 on the date of the acquisition.

Required:

A. Prepare the journal entries on the books of Pritano to record the acquisition on December 31, 2013.

B. At the end of 2014, the estimated fair value of the contingent consideration increased to $200,000. Prepare the journal entry to record the change in the fair value of the contingent consideration, if needed.

C. In 2015, the earnings did not meet the earnout target and the estimated fair value of the contingent consideration was zero. Prepare the journal entry to record the change in the fair value of the contingent consideration.

Reference no: EM13851549

Questions Cloud

Research how religion may influence communication : Research how religion may influence communication.
What hrm activities and programs can impact productivity : The productivity of the workforce is essential for the success of an organization. What HRM activities and programs can impact productivity
How do atoms obtain positive charges : How do atoms obtain positive charges. How do atoms obtain negative charges. Imagine that you are able to see the atoms that make up KHC8 H4O4, known as potassium hydrogen phthalate.
To whom are health care providers required to report : In what circumstances are health care providers required to report otherwise-protected health information? To whom are health care providers required to report? Do you think heath care records should be kept confidential and never reported? Why
Prepare the journal entry to record the change in fair value : In 2015, the earnings did not meet the earnout target and the estimated fair value of the contingent consideration was zero. Prepare the journal entry to record the change in the fair value of the contingent consideration.
Compare mill construction and heavy timber construction : Compare the advantages and disadvantages that heavy timber construction has in withstanding loads and stresses in comparison to ordinary construction types. Compare and discuss the differences between mill construction and heavy timber construction..
Prepare the journal entry to record acquisition by bullseye : Using Excel. Prepare the journal entry to record the acquisition by Bullseye Company. Submit your solution in same Excel file as for Problem 1.
Andrew clark is a mixed-crop producer : Andrew Clark is a mixed-crop producer who has recently diversified into berryproduction. He currently grows berries under contract for a local processor whosells frozen berries. The yield from his small operation is 5000 kilograms per year,and he net..
Determine the magnitude and direction of the magnetic field : Determine the magnitude and direction of the magnetic field at a point midway between the wires - determine the magnitude and direction of the magnetic field at point P, located d = 10.0 cm above wire 1.

Reviews

Write a Review

Financial Accounting Questions & Answers

  What are the equivalent units of production for materials

The Assembly Department uses a process cost accounting system. The department adds materials and incurs conversion costs uniformly throughout the process. During May, $200,000 of materials costs and $95,000 in conversion costs were charged to the dep..

  Would collison comments provide a justification

Would Collison's comments provide a justification for moves towards profit measures that incorporate ‘full costs' (considers the externalities of business)?

  Journalize the transactions for garner corporation

Journalizing the transactions involving stock issues and purchases -  Journalize the transactions for Garner Corporation.

  The bonds are classified as held-to maturity

On Jan 1, 2010, Morgan Company acquires 300,000 of Nicklaus, Inc, 9% bonds at 278,384. the interest is payable each December 31, and the bonds mature Dec 31, 2012. the investment will provide Morgan Company a 12% yield. The bonds are classified as..

  Job-order costing variables

On July 1, Job 46 had a beginning balance of $1,235. During July, prime costs added to the job totalled $560. Of that amount, direct materials were three times as much as direct labor. The ending balance of the job was $1,921. What was overhead appli..

  Find what would be change in miller''s operating profits

Suppose that Miller is operating at full capacity. If Miller were to accept Brisbois's offer, find what would be the change in Miller's operating profits?

  Prepare a financial statement worksheetdescribe the

prepare a financial statement worksheet.describe the advantages of using subsidiary ledgers and special journals.the

  Analyzing the statement based on trend analysismarcus

analyzing the statement based on trend analysis.marcus companyyou are the senior financial analyst for the marcus

  Compute the departmental overhead rates for uncle bruce

What is uncle Bruce's plantwide overhead rate? Compute the departmental overhead rates for uncle Bruce's three production lines. Round all answers to nearest cent.

  Show the machinery account for three years

You are required to show the Machinery Account for three years from 2006 to 2009 in the books of SUN Limited, which closes its books on Dec 31st.

  Ethical issues of macro- and micro-manipulation

Explain whether users of financial statements should exercise caution when interpreting financial statement compliant with GAAP and explain why the advantages of ‘accrual accounting' outweigh the disadvantages of ‘earnings management'.

  What it the totla amount of fica tax

Edward worked at three jobs during 2011. he earned 40,000, 37,000 and 9,000 respectively from the jobs and claimed three allowances on each of his W-4's. What it the totla amount of FICA tax that would have been withheld for Edwards wages?

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