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A. Normal earnings for similar firms (based on tangible assets only) = $1,750,000 × 14% = $245,000
Soal 2
A.
Accounts Receivable 180,000
Inventory 400,000
Land 50,000
Building 60,000
Equipment 70,000
Patent 20,000
Goodwill 10,000
Acquisition Expense 20,000
Current Liabilities 70,000
Long-term Debt 160,000
Cash 580,000
B.
Acquisition Expense 20,000
Accounts Receivable 180,000
Inventory 400,000
Land 50,000
Building 60,000
Equipment 70,000
Patent 20,000
Current Liabilities 70,000
Long-term Debt 160,000
Cash 520,000
Gain on Acquisition 50,000
Soal 3
A.
2016: Step 1: Fair value of the reporting unit $1,400,000
Carrying value of unit:
Carrying value of identifiable net assets $1,160,000
Carrying value of goodwill ($1,580,000 –
$1,310,000) 270,000
1,430,000
Excess of carrying value over fair value $30,000
The excess of carrying value over fair value
means that step 2 is required.
The excess of fair value over carrying value means that step 2 is not required.
B.
2016: Impairment Loss—Goodwill 60,000
Goodwill 60,000
2017: No entry
Soal 4
Eliminations
P S Debit Credit Noncontrolling Consolidated
Interest Balances
ASSETS
Cash $40,000 $30,000 $70,000
Accounts
receivable-net 30,000 45,000 75,000
Inventories 185,000 165,000 (b) 60,000 410,000
Land 45,000 120,000 (b) 25,000 190,000
Plant assets-
net 480,000 240,000 720,000
Investment in
S Corp. 420,000 (a) 420,000
Difference
between
implied and
book value (a) 150,000 (b) 150,000
Goodwill (b) 65,000 65,000
Total Assets $1,200,000 $600,000 $1,530,000
EQUITIES
Current
liabilities $170,000 $150,000 $320,000
Capital stock 600,000 300,000 (a) 300,000 600,000
Additional
paid-in capital 150,000 90,000 (a) 90,000 150,000
Retained
earnings 280,000 60,000 (a) 60,000 280,000
Noncontrolling
interest (a) 180,000 180,000 180,000
Total Equities $1,200,000 $600,000 $750,000 $750,000 $1,530,000
Land 25.000
Goodwill 65.000
Soal 5
Soal 5 B
Soal 6