Business, 19.10.2020 18:01 shrinu

On July 1, 2018, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $140 million cash. At the date of acquisition of the stock, VB net assets had a total fair value of $480 million and a book value of $280 million. Of the $200 million difference, $44 million was attributable to the appreciated value of inventory that was sold during the last half of 2018, $128 million was attributable to buildings that had a remaining depreciable life of 10 years, and $28 million related to equipment that had a remaining depreciable life of 5 years. Between July 1, 2018, and December 31, 2018, VB earned net income of $60 million and declared and paid cash dividends of $52 million. Required:
1. Prepare all appropriate journal entries related to the investment in 2016, assuming equity method.
2. Determine the amounts to be reported by Gupta

a. As an investment in Gupta's 2016 balance sheet.
b. As investment revenue or loss on Gupta's 2016 income statement
c. Among investing activities in Gupta's statement of cash flows.

Answers: 3

Show answers

Another question on Business

Business, 21.06.2019 22:20

If you offer up your car as a demonstration that you will pay off your loan to a bank or another financial lending institution, you are using your car as collateral. true false

Answers: 2

Answer

Business, 22.06.2019 04:30

Galwaysc electronics makes two products. model a requires component a and component c. model b requires component b and component c. new versions of both models are released each year with updated versions of all components. all components are sourced overseas, and abc contracts annually for a quantity of each component before seeing that year’s demand. components are only assembled into finished products once demand for each model is known. for the coming year, alwaysc’s purchasing manner has proposed ordering 500,000 units of component a, 630,000 of component b, and 1,000,000 units of component c. her boss has asked why she has recommended purchasing so much of components a and b when alwaysc will not have enough of component c to fully use all of the inventory of a and b. what factors might the purchasing manager cite to explain her recommended order? explain your reasoning.

Answers: 3

Answer

Business, 22.06.2019 06:30

If a team of three workers, each making the u.s. federal minimum wage, produced these 12 rugs, what would the total labor cost be? don't forget that these workers would be working overtime.

Answers: 3

Answer

Business, 22.06.2019 19:00

Lucy is catering an important luncheon and wants to make sure her bisque has the perfect consistency. for her bisque to turn out right, it should have the consistency of a. cold heavy cream. b. warm milk. c. foie gras. d. thick oatmeal.

Answers: 3

Answer

You know the right answer?

On July 1, 2018, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $140...

Questions