Chain Co. owned all of the voting common stock of Shannon Co…
Chain Co. owned all of the voting common stock of Shannon Corp. The corporations’ balance sheets dated December 31, 2025, include the following balances for land: for Chain–$416,000, and for Shannon–$256,000. On the original date of acquisition, the book value of Shannon’s land was equal to its fair value. On April 4, 2026, Chain sold to Shannon a parcel of land with a book value of $65,000. The selling price was $83,000. There were no other transactions which affected the companies’ land accounts during 2025. What is the consolidated balance for land on the 2026 balance sheet?
Read DetailsClemente Co. owned all of the voting common stock of Snider…
Clemente Co. owned all of the voting common stock of Snider Co. On January 2, 2025, Clemente sold equipment to Snider for $125,000. The equipment had cost Clemente $140,000. At the time of the sale, the balance in accumulated depreciation was $40,000. The equipment had a remaining useful life of five years and a $0 salvage value. Straight-line depreciation is used by both Clemente and Snider. At what amount should the equipment (net of depreciation) be included in the consolidated balance sheet dated December 31, 2025?
Read DetailsPell Company acquires 80% of Demers Company for $500,000 on…
Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2025. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Demers earns income and declares and pays dividends as follows: 2025 2026 2027 Net Income $100,000 $120,000 $130,000 Dividends 40,000 50,000 60,000 Assume the partial equity method is applied, how much does Pell record as Income from Demers for the year ended December 31, 2025?
Read DetailsOn November 8, 2026, Power Corp. sold land to Wood Co., its…
On November 8, 2026, Power Corp. sold land to Wood Co., its wholly owned subsidiary. The land cost $61,500 and was sold to Wood for $89,000. From the perspective of the combination, when is the gain on the sale of the land realized?
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