Please avoid solutions image based thanx Problem 5-11 (Static) (LO 5-2, 5-3, 5-5, 5-7)On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration.The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessedequipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developedseveral secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez'sfinancial records, were estimated to have a 20-year future life.As of December 31, the financial statements appeared as follows:ItemsRevenuesCost of goods soldExpensesNet incomeRetained earnings, 1/1Net incomeDividends declaredRetained earnings, 12/31Cash and receivablesInventoryInvestment in SuarezEquipment (net)Total assetsLiabilitiesCommon stockRetained earnings, 12/31Total liabilities and equitiesJarel$ (300,000)140,00020,000$ (140,000)$ (300,000)(140,000)$ (440,000)$ 210,000150,000260,000440,000$ 1,060,0008$ (420,000)(200,000)(440,000)(1,060,000)a. Revenuesb. Cost of goods soldc. Expensesd. Noncontrolling interest appearing on the balance sheete. Equipment (net)f. Inventory< Prev 10 of 15Suarez$ (200,000)80,00010,000$ (110,000)$ (150,000)(110,000)$ (260,000)$ 90,000110,0000300,000$ 500,000Required:Included in the preceding statements, Jarel sold inventory costing $80,000 to Suarez for $100,000. Of these goods,Suarez still owns 60 percent on December 31. Compute the following amounts for the December 31 consolidatedfinancial statements for Jarel and Suarez.Note: Input all amounts as positive value.$ (140,000)(100,000)(260,000)$ (500,000)ConsolidatedAmountNext >

Consolidation is an activity in which financial statements of a parent and its subsidiary should be…

On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez's financial records, were estimated to have a 20-year future life.

On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez's financial records, were estimated to have a 20-year future life.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 35P

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Use the following data for Problems 10–15:On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez’s financial records, were estimated to have a 20-year future life.As of December 31, the financial statements appeared as follows:Included in the above statements, Jarel sold inventory costing $80,000 to Suarez for $100,000. Of these goods, Suarez still owns 60 percent on December 31.What is the total of consolidated revenues?a. $500,000b. $460,000c. $420,000d. $400,000
Use the following data for Problems 10–15:On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez’s financial records, were estimated to have a 20-year future life.As of December 31, the financial statements appeared as follows:Included in the above statements, Jarel sold inventory costing $80,000 to Suarez for $100,000. Of these goods, Suarez still owns 60 percent on December 31.What is the consolidated total of noncontrolling interest appearing on the balance sheet?a. $85,500b. $83,100c. $87,000d. $70,500
Use the following data for Problems 10–15:On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez’s financial records, were estimated to have a 20-year future life.As of December 31, the financial statements appeared as follows:Included in the above statements, Jarel sold inventory costing $80,000 to Suarez for $100,000. Of these goods, Suarez still owns 60 percent on December 31.What is the total of consolidated cost of goods sold?a. $140,000b. $152,000c. $132,000d. $145,000
Use the following data for Problems 10–15:On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez’s financial records, were estimated to have a 20-year future life.As of December 31, the financial statements appeared as follows:Included in the above statements, Jarel sold inventory costing $80,000 to Suarez for $100,000. Of these goods, Suarez still owns 60 percent on December 31.What is the consolidated total for inventory at December 31?a. $240,000b. $248,000c. $250,000d. $260,000
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