Reference no: EM131284802
Winner Corporation acquired 80 percent of the common shares and 70 percent of the preferred shares of First Corporation at underlying book value on January 1, 20X9. At that date, the fair value of the noncontrolling interest in First’s common stock was equal to 20 percent of the book value of its common stock. First’s balance sheet at the time of acquisition contained the following balances:
Assets 600,000 Liabilities 90,000
Preferred stock 100,000
Common stock 150,000
Retained Earnings 260,000
Total Assets 600,000 Total Liabilities 600,000
The preferred shares are cumulative and have a 10 percent annual dividend rate and are four years in arrears on January 1, 20X9. All of the $5 par value preferred shares are callable at $6 per share. During 20X9, First reported net income of $100,000 and paid no dividends.
Based on the preceding information, what is First’s contribution to consolidated net income for 20X9?
$50,000
$80,000
$90,000
$100,000
|
Describe what the accounting treatment
: A company has a provision for long service leave for 35,000. In the same year, the company paid out $5000 in Long service leave to one of its long serving employees. Describe what the accounting treatment is to the $5000 payment and what the tax trea..
|
|
When purchasing equity securities above fair value
: When purchasing equity securities above fair value, and the excess is only attributable to goodwill. Is the excess amount from goodwill included in the recorded amount of the investment?
|
|
Compute the largest tax deduction
: Jason Products Co., a calendar year taxpayer, purchased business equipment (7-year property) for $2, 150,000. No other personal property was purchased during the year. Jason wants to take the largest possible tax deduction in 2016 related to this pro..
|
|
Compute taxable income and income taxes payable
: Zurich Company reports pretax financial income of $70,000 for 2017. The following items casue taxable income to be differnt than pretax financial income. Depreciation on the tax return is greater than derpeciation on the income statement by $16,000. ..
|
|
What is firsts contribution to consolidated net income
: Winner Corporation acquired 80 percent of the common shares and 70 percent of the preferred shares of First Corporation at underlying book value on January 1, 20X9. At that date, the fair value of the noncontrolling interest in First’s common stock w..
|
|
The organization has introduced internal audit department
: The organization has introduced an internal audit department in the second quarter of the year. The section consists of three staff. The chief internal auditor is a former “Big 6” audit manager with 10 years’ experience in the profession. Assume you ..
|
|
Record the declaration and payment of the cash dividend
: Greenwood Corporation has 81,000 shares of common stock outstanding. It declares a $1 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31. Prepare the entries on the appropriate dates to ..
|
|
Calculate breakeven point in units-breakeven point in dollar
: XYZ Company is considering the manufacture of a new toy. Each toy would sell for $5 and would require $2.00 in variable costs. In addition, annual fixed costs associated with the project would total $84,000. Calculate: (a) the breakeven point in unit..
|
|
Balance sheet for the bank account reconciled
: Prepare the adjusting journal entry that should be prepared to reflect the reconciling items. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) What is the amount of cash to be included ..
|