Albuquerque, Inc., acquired 24,000 shares of Marmon Companyseveral years ago for $720,000. At the...

60.1K

Verified Solution

Question

Accounting

Albuquerque, Inc., acquired 24,000 shares of Marmon Companyseveral years ago for $720,000. At the acquisition date, Marmonreported a book value of $500,000, and Albuquerque assessed thefair value of the noncontrolling interest at $30,000. Any excess ofacquisition-date fair value over book value was assigned tobroadcast licenses with indefinite lives. Since the acquisitiondate and until this point, Marmon has issued no additional shares.No impairment has been recognized for the broadcast licenses.
At the present time, Marmon reports $550,000 as totalstockholders’ equity, which is broken down as follows:
Common stock ($10 par value) $ 250,000
Additional paid-in capital 200,000
Retained earnings 100,000
Total $ 550,000
View the following as independent situations:
a. & b. Marmon sells 7,000 and 5,000 sharesof previously unissued common stock to the public for $40 and $30per share. Albuquerque purchased none of this stock. What journalentry should Albuquerque make to recognize the impact of this stocktransaction?

Answer & Explanation Solved by verified expert

3.6 Ratings (472 Votes)

hiii tried my See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

In: AccountingAlbuquerque, Inc., acquired 24,000 shares of Marmon Companyseveral years ago for $720,000. At the acquisition...Albuquerque, Inc., acquired 24,000 shares of Marmon Companyseveral years ago for $720,000. At the acquisition date, Marmonreported a book value of $500,000, and Albuquerque assessed thefair value of the noncontrolling interest at $30,000. Any excess ofacquisition-date fair value over book value was assigned tobroadcast licenses with indefinite lives. Since the acquisitiondate and until this point, Marmon has issued no additional shares.No impairment has been recognized for the broadcast licenses.At the present time, Marmon reports $550,000 as totalstockholders’ equity, which is broken down as follows:Common stock ($10 par value)$250,000Additional paid-in capital200,000Retained earnings100,000Total$550,000View the following as independent situations:a. & b. Marmon sells 7,000 and 5,000 sharesof previously unissued common stock to the public for $40 and $30per share. Albuquerque purchased none of this stock. What journalentry should Albuquerque make to recognize the impact of this stocktransaction?


Common stock ($10 par value)	$	250,000
Additional paid-in capital		200,000
Retained earnings		100,000
Total	$	550,000