On January 1,2016,Phoenix Company Acquired 80% of the Outstanding Capital

question 26

Essay

On January 1,2016,Phoenix Company acquired 80% of the outstanding capital stock of Skyler Company for $570,000.On that date,the capital stock of Skyler Company was $150,000 and its retained earnings were $450,000.
On the date of acquisition,the assets of Skyler Company had the following values:
All other assets and liabilities had book values approximately equal to their respective fair market values.The plant and equipment had a remaining useful life of 10 years from January 1,2016,and Skyler Company uses the FIFO inventory cost flow assumption.
Skyler Company earned $180,000 in 2016 and paid dividends in that year of $90,000.
Phoenix Company uses the complete equity method to account for its investment in S Company.
Required:
A.Prepare a computation and allocation schedule.
B.Prepare the balance sheet elimination entries as of December 31,2016.
C.Compute the amount of equity in subsidiary income recorded on the books of Phoenix Company on December 31,2016.
D.Compute the balance in the investment account on December 31,2016.

Understand the implication of short-run and long-run market adjustments.

Describe how changes in demand affect the market in the short run and long run.

Understand the determinants of the industry supply curve elasticity in the short run and long run.

Understand the concept and implications of anxiety sensitivity.

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Definitions:

Recession

A fleeting downturn in the economy, where there's a shrinkage in trade and industrial operations, generally noticed by two successive quarters of GDP decline.

Korean War

A conflict between North Korea, supported by China and the Soviet Union, and South Korea, supported by the United Nations, primarily the United States, which lasted from 1950 to 1953.

Inflation

The uptick in the overall pricing scheme for goods and services, leading to a diminution of acquisition power.

Agricultural Sector

The part of an economy concerned with the production, processing, and distribution of agricultural products.