70.2K

Verified Solution

Link Copied!

need detailed calculations and explenations. please do not do handwriting!

150 paids On January 1, 2017, Procise Corporation acquired 100 percent of the outstanding voting stock of Guapete Corporation for $ 5200 cash in addition Proce 30.0 in legal and accounting fees in connection with the combination On the acquisition date, Guage Rite had the following balance sheet. 75.0 Cash Accounts receivable Land Equipment, net 2200 Accounts payable Long term det Common stock Retained ang 7720 450.0 1200 1.170 1,387.0 At the acquisition date, it was found that Gaugelite's equipment was undervalued by s 32.0, and GaugeRite had in process research and development of $ 56.0 Any othe difference is appropriately allocated to goodwill gain on bargain purchase. The equipment has an ife, and the in-process research and development is expected to have an indefinite Wife. 560 in future benefits Although at the acquisition date Procise had expected from GuageRite's in-process research and development, by the end of 2017 it was apparent that the research project was a failure with no future economic benefits. 80.0 GaupeRite's 2017 net income and dividends were s and for 2018 were $ 460.0 and 3900 and $ 90.0 respectively On December 31, 2018, Procise and GaugeRite submitted the following separate financial statements for consolidation. There were no intra-entity payables on that date Precise Sales 5,0000 2.000 Cost of goods sold 2,000.0) (1.000 0 Depreciation expense 0.0 380.0 Other operating expenses 0.0 Subsidiary income 4560 Net income 3.456.0 4300 Retained earnings, 1/1/18 Net income Dividends declared Retained earnings, 12/31/18 3,4560 (1.3000 3.456.0 4600 1900 8000 830 Cash Accounts receivable Inventory Investment in Gaugelite 1600 6750 6200 1.2740 6800 1.120.0 5250 Land Equipment, net Goodwil Total assets 2,800.0 5,200.00 320.0 11.049.0 2.8620 Accounts payable Long term debt Common stock Retained earnings, 12/31/18 Total liabilities and equity 655.0 5,938.0 1,000.0 34560 11,049.0 410 1,5710 4500 8000 2.8620 Required: 1.0 Complete an analysis of the acquisition cost and its allocation 2.0 Prepare a consolidation worksheet as of December 31, 2018 Adopted from Hoyle, et al., Advanced Accounting, 13e, pages 146-147 All dollar amounts are in thousands. On January 1, 2017, Procise Corporation acquired 100 percent of the outstanding voting stock of GuageRite Corporation for $ 520.0 cash. In addition, Procise 30.0 in legal and accounting fees in connection with the combination On the acquisition date, GuageRite had the following balance sheet. paid $ Cash Accounts receivable Land Equipment, net 75.0 567.0 220.0 525.0 1,387.0 Accounts payable Long term debt Common stock Retained earnings 45.0 772.0 450.0 120.0 1,387.0 . At the acquisition date, it was found that GaugeRite's equipment was undervalued by $ 32.0 and GaugeRite had in-process research and development of $ 56.0 . Any othe difference is appropriately allocated to goodwill or gain on bargain purchase. The equipment has an 8.0 -year remaining life, and the in-process research and development is expected to have an indefinite life 56.0 in future benefits Although at the acquisition date Procise had expected $ from GuageRite's in-process research and development, by the end of 2017 it was apparent that the research project was a failure with no future economic benefits. 80.0 GaugeRite's 2017 net income and dividends were $ and for 2018 were $ 460.0 and $ 390.0 and $ 90.0 , respectively. On December 31, 2018, Proclise and GaugeRite submitted the following separate financial statements for consolidation. There were no intra-entity payables on that date. Procise GaugeRite Sales 5,000.0 2,000.0 Cost of goods sold (2,000.0) (1,000.0) Depreciation expense 0.0 (380.0) Other operating expenses 0.0 (160.0) Subsidiary income 456.0 0.0 Net Income 3,456.0 460.0 Retained earnings, 1/1/18 Net income Dividends declared Retained earnings, 12/31/18 1,300.0 3,456.0 (1,300.0) 3,456.0 430.0 460.0 (90.0) 800.0 Cash Accounts receivable 160.0 750 83.0 Arn 56.0 in future benefits Although at the acquisition date Procise had expected $ from GuageRite's in-process research and development, by the end of 2017 it was apparent that the research project was a failure with no future economic benefits. GaugeRite's 2017 net income and dividends were $ and for 2018 were 460.0 and 390.0 and $ 90.0 , respectively. 80.0 On December 31, 2018, Prociise and GaugeRite submitted the following separate financial statements for consolidation. There were no intra-entity payables on that date. Procise GaugeRite Sales 5,000.0 2,000.0 Cost of goods sold (2,000.0) (1,000.0) Depreciation expense 0.0 (380.0) Other operating expenses 0.0 (160.0) Subsidiary income 456.0 0.0 Net Income 3,456.0 460.0 Retained earnings, 1/1/18 Net Income Dividends declared Retained earnings, 12/31/18 1,300.0 3,456.0 (1,300.0) 3,456.0 430.0 460.0 (90.0) 800.0 Cash Accounts receivable Inventory Investment in Gauge Rite 83.0 454.0 680.0 0.0 160.0 675.0 620.0 1,274.0 2,800.0 5,200.0 320.0 11,049.0 Land Equipment, net Goodwill Total assets 1,120.0 525.0 0.0 2,862.0 Accounts payable Long term debt Common stock Retained earnings, 12/31/18 Total liabilities and equity 655.0 5,938.0 1,000.0 3,456.0 11,049.0 41.0 1,571.0 450.0 B00.0 2,862.0 Required: 1.0 Complete an analysis of the acquisition cost and its allocation. 2.0 Prepare a consolidation worksheet as of December 31, 2018 150 paids On January 1, 2017, Procise Corporation acquired 100 percent of the outstanding voting stock of Guapete Corporation for $ 5200 cash in addition Proce 30.0 in legal and accounting fees in connection with the combination On the acquisition date, Guage Rite had the following balance sheet. 75.0 Cash Accounts receivable Land Equipment, net 2200 Accounts payable Long term det Common stock Retained ang 7720 450.0 1200 1.170 1,387.0 At the acquisition date, it was found that Gaugelite's equipment was undervalued by s 32.0, and GaugeRite had in process research and development of $ 56.0 Any othe difference is appropriately allocated to goodwill gain on bargain purchase. The equipment has an ife, and the in-process research and development is expected to have an indefinite Wife. 560 in future benefits Although at the acquisition date Procise had expected from GuageRite's in-process research and development, by the end of 2017 it was apparent that the research project was a failure with no future economic benefits. 80.0 GaupeRite's 2017 net income and dividends were s and for 2018 were $ 460.0 and 3900 and $ 90.0 respectively On December 31, 2018, Procise and GaugeRite submitted the following separate financial statements for consolidation. There were no intra-entity payables on that date Precise Sales 5,0000 2.000 Cost of goods sold 2,000.0) (1.000 0 Depreciation expense 0.0 380.0 Other operating expenses 0.0 Subsidiary income 4560 Net income 3.456.0 4300 Retained earnings, 1/1/18 Net income Dividends declared Retained earnings, 12/31/18 3,4560 (1.3000 3.456.0 4600 1900 8000 830 Cash Accounts receivable Inventory Investment in Gaugelite 1600 6750 6200 1.2740 6800 1.120.0 5250 Land Equipment, net Goodwil Total assets 2,800.0 5,200.00 320.0 11.049.0 2.8620 Accounts payable Long term debt Common stock Retained earnings, 12/31/18 Total liabilities and equity 655.0 5,938.0 1,000.0 34560 11,049.0 410 1,5710 4500 8000 2.8620 Required: 1.0 Complete an analysis of the acquisition cost and its allocation 2.0 Prepare a consolidation worksheet as of December 31, 2018 Adopted from Hoyle, et al., Advanced Accounting, 13e, pages 146-147 All dollar amounts are in thousands. On January 1, 2017, Procise Corporation acquired 100 percent of the outstanding voting stock of GuageRite Corporation for $ 520.0 cash. In addition, Procise 30.0 in legal and accounting fees in connection with the combination On the acquisition date, GuageRite had the following balance sheet. paid $ Cash Accounts receivable Land Equipment, net 75.0 567.0 220.0 525.0 1,387.0 Accounts payable Long term debt Common stock Retained earnings 45.0 772.0 450.0 120.0 1,387.0 . At the acquisition date, it was found that GaugeRite's equipment was undervalued by $ 32.0 and GaugeRite had in-process research and development of $ 56.0 . Any othe difference is appropriately allocated to goodwill or gain on bargain purchase. The equipment has an 8.0 -year remaining life, and the in-process research and development is expected to have an indefinite life 56.0 in future benefits Although at the acquisition date Procise had expected $ from GuageRite's in-process research and development, by the end of 2017 it was apparent that the research project was a failure with no future economic benefits. 80.0 GaugeRite's 2017 net income and dividends were $ and for 2018 were $ 460.0 and $ 390.0 and $ 90.0 , respectively. On December 31, 2018, Proclise and GaugeRite submitted the following separate financial statements for consolidation. There were no intra-entity payables on that date. Procise GaugeRite Sales 5,000.0 2,000.0 Cost of goods sold (2,000.0) (1,000.0) Depreciation expense 0.0 (380.0) Other operating expenses 0.0 (160.0) Subsidiary income 456.0 0.0 Net Income 3,456.0 460.0 Retained earnings, 1/1/18 Net income Dividends declared Retained earnings, 12/31/18 1,300.0 3,456.0 (1,300.0) 3,456.0 430.0 460.0 (90.0) 800.0 Cash Accounts receivable 160.0 750 83.0 Arn 56.0 in future benefits Although at the acquisition date Procise had expected $ from GuageRite's in-process research and development, by the end of 2017 it was apparent that the research project was a failure with no future economic benefits. GaugeRite's 2017 net income and dividends were $ and for 2018 were 460.0 and 390.0 and $ 90.0 , respectively. 80.0 On December 31, 2018, Prociise and GaugeRite submitted the following separate financial statements for consolidation. There were no intra-entity payables on that date. Procise GaugeRite Sales 5,000.0 2,000.0 Cost of goods sold (2,000.0) (1,000.0) Depreciation expense 0.0 (380.0) Other operating expenses 0.0 (160.0) Subsidiary income 456.0 0.0 Net Income 3,456.0 460.0 Retained earnings, 1/1/18 Net Income Dividends declared Retained earnings, 12/31/18 1,300.0 3,456.0 (1,300.0) 3,456.0 430.0 460.0 (90.0) 800.0 Cash Accounts receivable Inventory Investment in Gauge Rite 83.0 454.0 680.0 0.0 160.0 675.0 620.0 1,274.0 2,800.0 5,200.0 320.0 11,049.0 Land Equipment, net Goodwill Total assets 1,120.0 525.0 0.0 2,862.0 Accounts payable Long term debt Common stock Retained earnings, 12/31/18 Total liabilities and equity 655.0 5,938.0 1,000.0 3,456.0 11,049.0 41.0 1,571.0 450.0 B00.0 2,862.0 Required: 1.0 Complete an analysis of the acquisition cost and its allocation. 2.0 Prepare a consolidation worksheet as of December 31, 2018

Answer & Explanation Solved by verified expert

See Answer