10/13/12

Assignment Print View

Score: 45.94

1.

out of 50 points (91.88%)

aw ard:

10 out of
10.00 points
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2011. As of that date, Abernethy has the following trial balance:
Debit
Accounts payable
Accounts receivable
Additional paid-in capital
Buildings (net) (4-year life)
Cash and short-term investments
Common stock
Equipment (net) (5-year life)
Inventory
Land
Long-term liabilities (mature 12/31/14)
Retained earnings, 1/1/11
Supplies
Totals

$
$

Credit
50,000

40,000
50,000
120,000
60,000
250,000
200,000
90,000
80,000
150,000
100,000
10,000

$ 600,000

$

600,000

During 2011, Abernethy reported income …show more content…
5 yrs.

$

10,000
(-4,000)

30,000

Goodwill

2.

90,000

60,000

aw ard:

5 out of
5.00 points
On January 1, 2011, Peterson Corporation exchanged $1,090,000 fair-value consideration for all of the outstanding voting stock of Santiago, Inc. At the acquisition date, Santiago had a book value equal to
$950,000. Santiago’s individual assets and liabilities had fair values equal to their respective book values except for the patented technology account, which was undervalued by $240,000 with an estimated remaining life of six years. The Santiago acquisition was Peterson’s only business combination for the year. In case expected synergies did not