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Ethan Company

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Question

Solve the following two problems in which you are asked to apply proper asset valuation. Submit your solutions to both problems on the same page of one Excel document.;Problem 1;You have been given the following information for Ethan Company as of June 1, 2010. Ethan Company purchased a parcel of land and then incurred specific costs for the construction of a new building. Below is a list of these costs;Cost of Parking Lot and gates=$14,000 Cost of filling the building site= $10,000 Legal Fees to buy land= $2,000;Cost of driveway= $9,000 Property Taxes for Jan 1,2010 to June 1, 2010= $5,000 Title Insurance= $2,000;Interest on the construction loan= $13,000 Proceeds from the sale of salvage materials= ($1500) Purchase price of land= $200,000;Cost of the building construction= $650,000 Cost of razing building on lot= $9,500 Cost of grading the lot= $5,000;1. Using Excel, determine the accounts that are affected by the above transactions and the final balance of each account. (Note: The interest on the construction loan will be applied to the cost of the land.);2. Please prepare your solution in an Excel file.;Problem 2;On April 25, 2010, Bullseye Company purchased all of the outstanding common stock of Vista Company, paying $14,000,000. The book values and fair values of Vista's assets and liabilities acquired are shown below in dollar amounts;Accounts Book Value Fair Value;Accounts Receivables $1,900,000 $1,725,000;Inventories $2,800,000 $4,000,000;Accounts Payable $2,000,000 $2,000,000;Property, Plant and Equipment $8,000,000 $12,625,000;Bonds Payable $4,600,000 $4,225,000;1. Using Excel, prepare the journal entry to record the acquisition by Bullseye Company.;2. Submit your solution in same Excel file as for Problem 1.

 

Paper#35248 | Written in 18-Jul-2015

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