\nVisit Below Link, To Download This Course:\n\nhttps://www.tutorialsservice.net/product/acc-401-module-2-exam-1-latest/\n\nOr \nEmail us on\nSUPPORT@TUTORIALSSERVICE.NET\n\nACC 401 Module 2 Exam 1 Latest\nACC401\nACC 401 Module 2 Exam 1 Latest\nQuestion 1 (20 points)\nOn January 2, 2013 Piron Corporation issued 100,000 new shares of its $5 par value common stock valued at $19 a share for all of Seana Corporationâ€™s outstanding common shares. Piron paid $15,000 to register and issue shares. Piron also paid $20,000 for the direct combination costs of the accountants. The fair value and book value of Seanaâ€™s identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2013 is as follows:\n
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ACC 401 Module 2 Exam 1 Latest
ACC 401 Module 2 Exam 1 Latest
Question 1 (20 points)
On January 2, 2013 Piron Corporation issued 100,000 new shares of its $5 par value common stock
valued at $19 a share for all of Seana Corporation’s outstanding common shares. Piron paid $15,000 to
register and issue shares. Piron also paid $20,000 for the direct combination costs of the accountants.
The fair value and book value of Seana’s identifiable assets and liabilities were the same. Summarized
balance sheet information for both companies just before the acquisition on January 2, 2013 is as follows:
Cash $150,000 $120,000
Inventories 320,000 400,000
Other current assets 500,000 500,000
Land 350,000 250,000
Plant assets-net 4,000,000 1,500,000
Total assets $5,320,000 $2,770,000
Accounts payable $1,000,000 $300,000
Notes payable 1,300,000 660,000
Additional paid-in capital 1,000,000 100,000
Retained earnings 20,000 1,210,000
Total liabilities & equities $5,320,000 $2,770,000
Part 1: Prepare Piron’s general journal entry for the acquisition of Seana, assuming that Seana survives
as a separate legal entity.
Part 2: Prepare Piron’s general journal entry for the acquisition of Seana, assuming that Seana will
dissolve as a separate legal entity.
Question 1 options:
Question 2 (20 points)
Question 2 Und
Pancake Corporation saw the potential for vertical integration and purchased a 15% interest in Syrup
Corp. on January 1, 2013, for $150,000. At that date, Syrup’s stockholders’ equity included $200,000 of
$10 par value common stock, $300,000 of additional paid in capital, and $500,000 retained earnings. The
companies began to work together and realized improved sales by both parties. On December 31, 2014,
Pancake paid $250,000 for an additional 20% interest in Syrup Corp. Both of Pancake’s investments
were made when Syrup’s book values equaled their fair values. Syrup’s net income and dividends for
2013 and 2014 were as follows:
Net income $220,000 $330,000
Dividends $20,000 $30,000
Part 1: Prepare journal entries for Pancake Corporation to account for its investment in Syrup Corporation
for 2013 and 2014.
Part 2: Calculate the balance of Pancake’s investment in Syrup at December 31, 2014.
Question 2 options:
Question 3 (20 points)
Question 3 Und
On January 1, 2013, Pailor Inc. purchased 40% of the outstanding stock of Saska Company for $300,000.
At that time, Saska’s stockholders’ equity consisted of $270,000 common stock and $330,000 of retained
earnings. Saska Corporation reported net income of $360,000 for 2013. The allocation of the $60,000
excess of cost over book value acquired is shown below, along with information relating to the useful lives
of the items:
Overvalued receivables (collected in 2013) $(5,000)
Undervalued inventories (sold in 2013) 16,000
Undervalued building (4 years’ useful life remaining at January 1, 2013) 24,000
Undervalued land 8,000
Unrecorded patent (6 years’ economic life remaining at January 1, 2013) 18,000
Undervalued accounts payable (paid in 2013) (4,000)
Total of excess allocated to identifiable assets and liabilities 57,000
Excess cost over book value acquired $60,000
Determine Pailor’s investment income from Saska for 2013.
Question 3 options:
Question 4 (20 points)
Question 4 Und
On July 1, 2014, Polliwog Incorporated paid cash for 21,000 shares of Salamander Company’s $10 par
value stock when it was trading at $22 per share. At that time, Salamander’s total stockholders’ equity
was $597,000, and they had 30,000 shares of stock outstanding, both before and after the purchase. The
book value of Salamander’s net assets is believed to approximate the fair values.
Part 1: Prepare the journal entry that Polliwog would record at the date of acquisition on their general
Part 2: Calculate the balance of the goodwill that would be recorded on Polliwog’s general ledger, on
Salamander’s general ledger, and in the consolidated financial statements.
Question 4 options:
Question 5 Und
On January 1, 2014, Pinnead Incorporated paid $300,000 for an 80% interest in Shalle Company. At that
time, Shalle’s total book value was $300,000. Patents were undervalued in the amount of $10,000.
Patents had a 5 year remaining useful life, and any remaining excess value was attributed to goodwill.
The income statements for the year ended December 31, 2014 of Pinnead and Shalle are summarized
Sales $800,000 $300,000
Income from Shalle 78,400
Cost of sales (100,000) (100,000)
Depreciation (70,000) (30,000)
Other expenses (130,000) (70,000)
Net income $578,400 $100,000
Part 1: Calculate the goodwill that will appear in the consolidated balance sheet of Pinnead and
Subsidiary at December 31, 2014.
Part 2: Calculate consolidated net income for 2014.
Part 3: Calculate the noncontrolling interest share for 2014.