Allfoods Corp. (Allfoods) acquired 80 percent of the outstanding common stock of Baked Beans Corp. in a business combination. After value consideration transferred value of tangible and intangible assets acquired‚ libilities assumed‚ I recommend doing this consolidation general entry for the business combination: Dr. | Land | $ 21‚000‚000 | | | | Dr. | PPE | $ 7‚000‚000 | | | | Dr. | IPR&D | $ 15‚000‚000 | | | | Dr. | Trademark | $ 3‚000‚000 | | | | Dr. | Goodwill
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Abstract This paper is written for the accounting theory course as a course project. This paper discusses the differences between the historical cost accounting approach and the fair value accounting approach. The discussion will focus on the debate on using which accounting approach. We begin by stating the definitions of both concepts and discussing them thoroughly‚ then we state the main advantages of the two approaches followed by comparison between them. The last section of this paper discusses
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1. Sadie incorporates her sole proprietorship with assets having a fair market value of $80‚000 and an adjusted basis of $100‚000. Even though § 351 applies‚ Sadie may recognize her realized loss of $20‚000. F True False 2. For § 351 purposes‚ stock warrants are included in the definition of "stock." F True False 3. In order to retain the services of Paige‚ a key employee in Byron’s sole proprietorship‚ Byron contracts
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2. On January 1‚ 2013‚ JP Corp issued $1 million ten-year bonds. The bonds pay 12% interest semi-annually on June 30 and December 31. The bonds are issued to yield 10%. The bonds are callable at 120 at any time on or after 12/31/2013. JP Corp uses effective interest rate method to calculate their interest expense each period. (12 points) Required: 1) Calculate the issue price of the bonds. Present value of face amount = $1‚000‚000*0.37689 = 376‚890 Present value of interest payments
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Financial Accounting Easy: 1. Which of the following is usually considered cash? a. Certificate of deposit b. Checking account c. Money market saving certificate d. Postulated Check 2. In preparing the August 31‚ 2011 bank reconciliation‚ Apex Company provided the ff. information Balance per bank statement 1‚805‚000 Deposit in transit 325‚000 Return of customer’s check for 60‚000 Insufficient fund Outstanding checks 275‚000 Bank service change
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cannot pay a note due that day. It is a $500‚000 note with $50‚000 accrued interest payable to Edsen‚ Inc. Edsen agrees to forgive the accrued interest‚ extend the maturity date to December 31‚ 2008‚ and reduce the interest rate to 4%. The present value of the restructured cash flows is $428‚000. Instructions Prepare entries for the following: (a) The restructure on Poore’s books. (5 points) (b) The payment of interest on December 31‚ 2007. (5 points) (c) The restructure on Edsen’s books
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equity instruments issued or liabilities incurred and the related cost to the entity as those services are consumed. This Topic uses the terms compensation and payment in their broadest senses to refer to the consideration paid for employee services. 2. How many periods of EPS data must be presented? 260-10-45-7 EPS data shall be presented for all periods for which an income statement or summary of earnings is presented. If diluted EPSdata are reported for at least one period‚ they shall be reported
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discuss efficient market hypothesis and its implications on the information perspective of accounting. As information perspective was later replaced by the measurement perspective‚ we will discuss recent accounting measurement issues‚ including fair value accounting and off-balance sheet liabilities. Positive accounting theory‚ earnings management‚ executive compensation and economic consequences of standard setting will be covered in the last part. Financial Accounting Theory is a rigorous subject
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should record sales revenue in January 2010 of what? Present value of annuity due PVad = [ $80‚000 x f( n=7‚ i=10%)] x (1+.10) PVad = $80‚000 x 4.868 x 1.10 = $428‚384 2.) On January 1‚ 2010‚ Haley co. issued ten-year bonds with a face amount of $2‚000‚000 and a stated interest rate of 8% payable annually on January 1. The bonds were priced to yield 10%. What was the total price of the bonds? Requires both Present value of a single sum and ordinary annuity PVss = $2‚000‚000 x f(
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The following are three online journals of Historical Cost and Fair Value: 1. Summary of HISTORIC COST VERSUS FAIR VALUE In accounting historical cost is the original or nominal amount of money paid for asset rather than inflation adjusted price. In other words it is the resource given up or a liability incurred to acquire an asset. The historical cost principle states that the asset should be reported at it cost (cash or cash equivalent amount) at the time of exchange and should include all
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