Reeder Corp. acquired one hundred percent of O’Neill Inc. on…

Reeder Corp. acquired one hundred percent of O’Neill Inc. on January 1, 2019, at a price in excess of the subsidiary’s fair value. On that date, Reeder’s equipment (ten-year life) had a book value of $380,000 but a fair value of $460,000. O’Neill had equipment (ten-year life) with a book value of $240,000 and a fair value of $370,000. Reeder used the partial equity method to record its investment in O’Neill. On December 31, 2021, Reeder had equipment with a book value of $270,000 and a fair value of $400,000. O’Neill had equipment with a book value of $180,000 and a fair value of $300,000. What is the consolidated balance for the Equipment account as of December 31, 2021?

Watkins, Inc. acquires all of the outstanding stock of Glen…

Watkins, Inc. acquires all of the outstanding stock of Glen Corporation on January 1, 2020. At that date, Glen owns only three assets and has no liabilities:     Book Value Fair Value Land $ 40,000   $ 50,000   Equipment (10-year life)   80,000     75,000   Building (20-year life)   200,000     300,000     If Watkins pays $450,000 in cash for Glen, what acquisition-date fair value allocation, net of amortization, should be attributed to the subsidiary’s Equipment in consolidation at December 31, 2022?                         A)    $(5,000).             B)    $80,000.            C)    $75,000.            D)    $73,500.            E)    $(3,500).

Luffman Inc. owns 30% of Bruce Inc. and appropriately applie…

Luffman Inc. owns 30% of Bruce Inc. and appropriately applies the equity method. During the current year, Bruce bought inventory costing $52,000 and then sold it to Luffman for $80,000. At year-end, all of the merchandise had been sold by Luffman to other customers. What amount of gross profit on intra-entity sales must be deferred by Luffman?

Wilkins Inc. acquired 100% of the voting common stock of Gra…

Wilkins Inc. acquired 100% of the voting common stock of Granger Inc. on January 1, 2021. The book value and fair value of Granger’s accounts on that date (prior to creating the combination) are as follows, along with the book value of Wilkins’s accounts:     Wilkins Book Value Granger Book Value Granger Fair Value Retained earnings, 1/1/21 $ 250,000 $ 240,000     Cash and receivables   170,000   70,000 $ 70,000 Inventory   230,000   180,000   210,000 Land   320,000   220,000   240,000 Buildings (net)   480,000   240,000   280,000 Equipment (net)   120,000   90,000   90,000 Liabilities   650,000   440,000   430,000 Common stock   360,000   80,000     Additional paid-in capital   60,000   40,000       Assume that Wilkins issued 13,000 shares of common stock with a $5 par value and a $46 fair value for all of the outstanding stock of Granger. What is the consolidated balance for Land as a result of this acquisition transaction?                         A)    $500,000.                        B)    $550,000.            C)    $540,000.            D)    $560,000.            E)    $530,000.

Kaye Company acquired 100% of Fiore Company on January 1, 20…

Kaye Company acquired 100% of Fiore Company on January 1, 2021. Kaye paid $1,000 excess consideration over book value, which is being amortized at $20 per year. There was no goodwill in the combination. Fiore reported net income of $400 in 2021 and paid dividends of $100.Assume the equity method is applied. How much equity income will Kaye report on its internal accounting records as a result of Fiore’s operations?

A 15-year-old high school student is brought to the emergenc…

A 15-year-old high school student is brought to the emergency room by his father because of the sudden onset of excruciating pain in his right testicle. The pain started 2 hours prior and has gotten worse in intensity. He denies fever, chills, or urethral discharge. He is not sexually active. On physical examination, the testicle is swollen and tender to palpation. It appears to be retracted upward in the scrotum. He has no other evidence of infection. What is your most likely diagnosis?