REFERENCE: Ref.03_14 Jaynes Inc.obtained All of Aaron Co.'s Common Stock on January

question 63

Essay

REFERENCE: Ref.03_14
Jaynes Inc.obtained all of Aaron Co.'s common stock on January 1,2009,by issuing 11,000 shares of $1 par value common stock.Jaynes' shares had a $17 per share fair value.On that date,Aaron reported a net book value of $120,000.However,its equipment (with a five-year remaining life)was undervalued by $6,000 in the company's accounting records.Any excess of consideration transferred over fair value of assets and liabilities is assigned to an unrecorded patent to be amortized over ten years.
SHAPE \* MERGEFORMAT

-If this combination is viewed as an acquisition,what balance would Jaynes' Investment in Aaron Co.account have shown on December 31,2010,when the equity method was applied?

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Definitions:

Random Number Generator

A tool or algorithm used to produce a sequence of numbers that lacks any predictable pattern, often used in statistical sampling, computer simulations, and cryptography.

Volunteer Sampling

The selection of research participants from a pool of individuals who have expressed a willingness to participate, which may not fully represent the population.

Quota Sampling

A non-probability sampling technique where the researcher ensures the sample reflects certain characteristics of the population.

Purposive Sampling

A non-random sampling technique used in qualitative research in which participants are selected based on specific characteristics or purposes.