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    Jawaban Kuis No.1 Akl 2 - Post - TM 3 - Renanda Putri - 43216120238

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    Renanda Putri
    Raj Ltd issued common stock worth $800,000 to acquire 40% ownership of Akash Ltd. On January 1, 2014, Akash Ltd had net assets of $2.25 million. The fair values of Akash's inventory, equipment, and notes payable differed from their book values. Raj allocated the $800,000 investment cost over Akash's book values and fair values, resulting in a $124,000 gain on bargain purchase. In 2014, Akash declared $160,000 in dividends and earned $400,000 in net income. Raj's investment in Akash at December 31, 2014 was $952,000, reflecting the initial cost, gain, dividends received,

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    Jawaban Kuis No.1 Akl 2 - Post - TM 3 - Renanda Putri - 43216120238

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    Renanda Putri
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    Raj Ltd issued common stock worth $800,000 to acquire 40% ownership of Akash Ltd. On January 1, 2014, Akash Ltd had net assets of $2.25 million. The fair values of Akash's inventory, equipment, and notes payable differed from their book values. Raj allocated the $800,000 investment cost over Akash's book values and fair values, resulting in a $124,000 gain on bargain purchase. In 2014, Akash declared $160,000 in dividends and earned $400,000 in net income. Raj's investment in Akash at December 31, 2014 was $952,000, reflecting the initial cost, gain, dividends received,

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    JAWABAN KUIS NO.1 AKL 2_POST_TM 3_RENANDA PUTRI_43216120238

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    Raj Ltd issued common stock worth $800,000 to acquire 40% ownership of Akash Ltd. On January 1, 2014, Akash Ltd had net assets of $2.25 million. The fair values of Akash's inventory, equipment, and notes payable differed from their book values. Raj allocated the $800,000 investment cost over Akash's book values and fair values, resulting in a $124,000 gain on bargain purchase. In 2014, Akash declared $160,000 in dividends and earned $400,000 in net income. Raj's investment in Akash at December 31, 2014 was $952,000, reflecting the initial cost, gain, dividends received,

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    Download as DOC, PDF, TXT or read online from Scribd
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    2K views2 pages

    Jawaban Kuis No.1 Akl 2 - Post - TM 3 - Renanda Putri - 43216120238

    Uploaded by

    Renanda Putri
    Raj Ltd issued common stock worth $800,000 to acquire 40% ownership of Akash Ltd. On January 1, 2014, Akash Ltd had net assets of $2.25 million. The fair values of Akash's inventory, equipment, and notes payable differed from their book values. Raj allocated the $800,000 investment cost over Akash's book values and fair values, resulting in a $124,000 gain on bargain purchase. In 2014, Akash declared $160,000 in dividends and earned $400,000 in net income. Raj's investment in Akash at December 31, 2014 was $952,000, reflecting the initial cost, gain, dividends received,

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    of 2

    SOAL KUIS AKL 2 NO.

    Raj Ltd issued 10,000 of $10 par common stock with a total market value of $800,000, to
    purchase 40 percent ownership of Akash Ltd on January 1, 2014. Akash Ltd had net assets of
    $2,250,000 at beginning of the year. The information relating to the difference between book
    values and fair values of Akash Ltd on January 1, 2014 is as follows (in thousands) :

    Book Value Fair Value


    Inventory $ 130,000 $ 150,000
    Equipment-net (4 years usefu life) 500,000 460,000
    Notes Payable (due in 8 years) 300,000 220,000

    Akash Ltd declared dividends of $160,000 on December 1 and reported


    $400,000 net income for the year.

    REQUIRED :
    1. Prepare a schedule for allocating the investment cost over the book
    values/fair values interest acquired
    2. Calculate investment in Akash Ltd Balance at December 31, 2014
    Jawab :

    1. Schedule for allocating the investment cost over the book values/fair values interest acquired:
    RAJ LTD AND ITS 40 PERCENT-OWNED EQUITY INVESTEE
    AKASH LTD (IN THOUSANDS)
    RAJ LTD AND ITS 40%-OWNED EQUITY INVESTEE,
    AKASH LTD (IN
    THOUSANDS)
    Investment in Akash Ltd $ 800
    Book value of the interest acquired (40% x $2,250,000) $ 900

    Excess of cost over book value acquired -$ 100

    Fair - Book x % Interest = Amount


    Value Value Acquired Assigned
    Inventory $ 150 $ 130 40% $8
    Equipment-net $ 460 $ 500 40% -$ 16
    Notes payable $ 220 $ 300 40% $ 32

    Total assigned to identifiable net assets $ 24


    Remainder assigned to gain on bargain purchase -$ 124

    Total excess of cost over book value acquired -$ 100

    2. Investment in Akash Ltd Balance at December 31, 2014:


    Initial cost $800,000
    Gains on bargain purchase $124,000
    Dividends received ($64,000)
    Income from Akash Ltd $ 92,000
    Ending balance $952,000

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