refer to the preceding information for fast cool s acquisition of fast air s common 4373536

Refer to the preceding information for Fast Cool’s acquisition of Fast Air’s common stock. Assume Fast Cool issues 35,000 shares of its $20 fair value common stock for 80% of Fast Air’s common stock. Fast Cool uses the simple equity method to account for its investment in Fast Air. Fast Cool and Fast Air have the following trial balances on December 31, 2012: Required 1. Prepare a value analysis and a determination and distribution of excess schedule for the investment in Fast Air. 2. Complete a consolidated worksheet for Fast Cool Company and its subsidiary Fast Air Company as of December 31, 2012. Prepare supporting amortization and income distribution schedules. Fast Cool Company and Fast Air Company are both manufacturers of air conditioning equipment. On January 1, 2011, Fast Cool acquires the common stock of Fast Air by exchanging its own $1 par, $20 fair value common stock. On the date of acquisition, Fast Air has the following balance sheet: Fast Cool requests that an appraisal be done to determine whether the book value of Fast Air’s net assets reflect their fair values. The appraiser determines that several intangible assets exist, although they are unrecorded. If the intangible assets do not have an observable market, the appraiser estimates their value. The appraiser determines the following fair values and estimates: Accounts receivable . .. . . . . .. .. .. . .. . . . . .. . . . $ 40,000 Inventory (soldduring2011). . . .. .. … .. . . .. .. . 65,000 Land.. . .. . . . . .. . . . . . .. .. .. .. .. . . . .. . . .. .. . 100,000 Buildings (20-year life) . . . . . .. …. . .. . . . . .. . . . 500,000 Equipment(5-year life).. . . . . .. …. . .. . . . . .. . . . 100,000 Patent (5-year life) .. . .. . . . . .. .. .. . .. . . . . .. . . . 50,000 Current liabilities . .. . . . . . .. .. .. … . . . . .. . . .. . 30,000 Mortgage payable (5-year life). .. … .. .. . . . . .. . 205,000 Favorable purchase contract (2-year life) .. .. . . . . . 10,000 Any remaining excess is attributed to goodwill. View Solution:
Refer to the preceding information for Fast Cool s acquisition of

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