Answer of Assignment

Answer of Assignment - Answer for Question 1 1). Prepare...

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Answer for Question 1 acquisition using the Proprietary Theory. Calculation of Purchase Discrepancy (proprietary theory) Cost of 90 percent investment in John Inc. Sharehoulders' equity of John Inc. Common shares 60,000.00 Retained Earnings 120,000.00 180,000.00 Jean Inc. 's ownership 90% Purchase discrepancy Allocated: (FV-BV)*90% Inventory -20,000*90%= (18,000.00) Plant and equipment (net) +44,000*90%= 39,600.00 Trademark +16,000*90%= 14,400.00 36,000.00 Bonds payable -30,000*90%= (27,000.00) Balance - Goodwill John Inc. Consolidated Balance Sheet August 31, 2002 Cash (1,200,000-400,000+90%*300,000) Accounts receivable (400,000+90%*64,000) Inventory (240,000+90%*80,000-18,000) Plant and equipment (net) (860,000+90%*256,000+39,600) Trademark (0+90%*20,000+14,400) Goodwill (0+0+175,000) Accounts payable (1,500,000+90%*300,000) Bonds payable (600,000+90%*240,000-27,000) Total liabilities Shareholders' equity Common shares 500,000.00 Retained earnings 100,000.00 1). Prepare Jean Inc’s consolidated Balance Sheet on the date of
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Answer for Question 2 1). Calculate the Goodwill on the date of acquisition. Cost of 40% of SOS Inc.
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This note was uploaded on 06/04/2009 for the course BUSINESS AIT 707 taught by Professor Raminrezaeinia during the Winter '09 term at Seneca.

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Answer of Assignment - Answer for Question 1 1). Prepare...

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