At December 31, 2014, George Weston Ltd. purchased 90% of the outstanding common shares of Bluenotes Ltd. for $8.55 million in cash. On that date, the shareholders' equity of Bluenotes totaled $8 million and consisted of $1 million in common shares and $7 million in retained earnings. Both companies use the straight-line method to calculate depreciation. Goodwill, if any arises as a result of this business combination, is written down when there is an impairment. Both George Weston and Bluenotes report under accounting standards for private enterprises and pay tax at the rate of 40%. For the year ending December 31, 2019, the statements of earnings for George Weston and Bluenotes were as follows: George Weston $22,500,000 16,000,000 Bluenotes $9,800,000 5,000,000 Sales and other revenue Cost of goods sold Depreciation expense Other expenses 2,500,000 2,000,000 1,800,000 $2,200,000 1,200,000 $1,600,000 Net income At December 31, 2019, the condensed statements of financial position for the two companies were as follows: George Weston $31,000,000 Bluenotes $13,500,000 Total assets Liabilities $5,000,000 12,100,000 $1,200,000 1,000,000 11,300,000 $13,500,000 No par common shares Retained earnings 13,900,000 $31,000,000 Total
At December 31, 2014, George Weston Ltd. purchased 90% of the outstanding common shares of Bluenotes Ltd. for $8.55 million in cash. On that date, the shareholders' equity of Bluenotes totaled $8 million and consisted of $1 million in common shares and $7 million in retained earnings. Both companies use the straight-line method to calculate depreciation. Goodwill, if any arises as a result of this business combination, is written down when there is an impairment. Both George Weston and Bluenotes report under accounting standards for private enterprises and pay tax at the rate of 40%. For the year ending December 31, 2019, the statements of earnings for George Weston and Bluenotes were as follows: George Weston $22,500,000 16,000,000 Bluenotes $9,800,000 5,000,000 Sales and other revenue Cost of goods sold Depreciation expense Other expenses 2,500,000 2,000,000 1,800,000 $2,200,000 1,200,000 $1,600,000 Net income At December 31, 2019, the condensed statements of financial position for the two companies were as follows: George Weston $31,000,000 Bluenotes $13,500,000 Total assets Liabilities $5,000,000 12,100,000 $1,200,000 1,000,000 11,300,000 $13,500,000 No par common shares Retained earnings 13,900,000 $31,000,000 Total
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 11PB: On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received...
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