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Below is a copy of the PDF questions, attached is the PDF with questions. Thanks for your time. Homework Ch 1: Four Problems: Problem 1: Panda obtained 100% of Snail?s outstanding common stock on January 1, 2010, by issuing 1,000,000 shares of $15 par value common stock. Panda?s shares had a $75 per share fair value. Snail?s book value is $10 million. Book and fair values are the same except for equipment with fair value $15 million higher than book value. Snail has unreported identifiable intangibles valued at $4 million. Assume that Panda uses the equity method to account for its investment. Snail reports net income of $5 million and declares and pays cash dividends of $1 million to Panda in 2010. Revalued equipment has a remaining life of 20 years. Identifiable intangibles have 4 years of remaining life. Straight-line depreciation and amortization is used. Goodwill is not impaired. Panda prepares its internal reporting for the year ending December 31, 2010. Required: 1) Record the purchase of equity investment on 1/1/2010. 2) Allocate Panda?s acquisition costs and determine the amount attributable to goodwill, if any. 3) What is Panda?s Equity in Income balance in Snail for 2010? 4) Record Panda?s share of Snail?s net income in 2010. 5) Record Panda?s share of dividends received from Snail in 2010. 2 Problem 2: Pipe acquires 80% of Slippers on January 1, 2010 and uses the equity method to account for its investment in Slippers. On January 2, 2010, Pipe sells equipment with a 10-year remaining life and an original cost of $5 million to Slippers for $4,500,000. Accumulated depreciation on the transfer date was $2 million. Assume the equipment was sold to an outside party on 1/2/ 2012 for $3.8 million. Required: Prepare 2011 and 2012 entries related to this equipment for Pipe and Slippers in their internal record. Problem 3: Pipe acquires 80% of Slippers on January 1, 2010 and uses the equity method to account for its investment in Slippers. In 2010, Slippers sells land costing $2,000,000 to Pipe for $2,300,000. Pipe still holds the land at the end of 2011. Assume the land is sold to an outside party in 2012 for $3 million. Required: Prepare 2010 and 2012 entries related to this land for Pipe in its internal record.3 Problem 4: Pipe acquires 80% of Slippers on January 1, 2010 and uses the equity method to account for its investment in Slippers. Assume Pipe sells merchandise costing $1 million to Slippers during 2010. Pipe?s markup is 50% of cost. Slippers? 2010 ending inventory includes $900,000 purchased from Pipe. The $900,000 ending inventory is resold to an outside party in 2011. Slippers? markup is 20% of cost. Required: Prepare entries for Pipe in its 2010 internal record for this intra-entity inventory transfer

 

Paper#1178 | Written in 18-Jul-2015

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