PROBLEM 2: GAGA AND BIEBER COMPANIES HAVE THE FOLLOWING BALANCE


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Thanks so much for your help. I have attached 3 more problems due by Thursday. Let me know if you need anything else from me!!! 9 pages Problems 2-4.xlsx PROBLEM 2: GAGA AND BIEBER COMPANIES HAVE THE FOLLOWING BALANCE SHEETS ON JANUARY 1, 2016 $ $ $ $ $ $ BIEBER 500,000.00 200,000.00 1,000,000.00 100,000.00 200,000.00 1,800,000.00 $ 5,000,000 $ 800,000.00 $ $ 10,000,000 $ 10,000,000 $ 600,000.00 400,000.00 CASH A/R EQUIPMENT A/D EQUIPMENT LAND TOTAL ASSETS $ $ $ $ $ $ NOTE PAYABLE COMMON STOCK RETAINED EARNINGS GAGA 10,000,000 5,000,000 10,000,000 1,000,000 1,000,000 25,000,000 ON JANUARY 2ND GAGA ACQUIRED ALL OF THE OUTSTANDING STOCK OF BIEBER COMPANY FROM BIEBER’S STOCKHOLDERS BY ISSUING 500 SHARES OF GAGA STOCK WHEN GAGA HAD A MARKET VALUE OF $5 PER SHARE. ON JANUARY 2 ND THE FAIR MARKET VALUE OF BIEBE EQUIPMENT WAS $1,100,000 AND THE FAIR MARKET VALUE OF BIEBER’S LAND WAS $50,000. BIEBER WILL CONTINUE TO EXIST AFTER THIS ACQUISITION. REQUIRED: A.) B.) C.) D.) MAKE THE JOURNAL ENTRY GAGA MAKES WHEN IT ACQUIRES ALL OF THE STOCK OF BIEBER BY ISSUING ITS 500,0 MAKE THE JOURNAL ENTRY BIEBER MAKES WHEN ITS STOCKHOLDERS SELL THEIR STOCK TO GAGA FOR GAGA STO PREPARE A CONSOLIDATED BALANCE SHEET ON JANUARY 3RD PREPARE ANY NECESSARY WORKSHEET ENTRIES NEEDED TO CONSTRUCT THE CONSOLIDATED BALANCE SHEET PROBLEM 3: PROBLEM 2: GAGA AND BIEBER COMPANIES HAVE THE FOLLOWING BALANCE SHEETS ON JANUARY 1, 2016 $ $ $ $ $ $ BIEBER 500,000.00 200,000.00 1,000,000.00 100,000.00 200,000.00 1,800,000.00 $ 5,000,000 $ 800,000.00 $ $ 10,000,000 $ 10,000,000 $ 600,000.00 400,000.00 CASH A/R EQUIPMENT A/D EQUIPMENT LAND TOTAL ASSETS $ $ $ $ $ $ NOTE PAYABLE COMMON STOCK RETAINED EARNINGS GAGA 10,000,000 5,000,000 10,000,000 1,000,000 1,000,000 25,000,000 ON JANUARY 2ND GAGA ACQUIRED 80% OF THE OUTSTANDING STOCK OF BIEBER COMPANY FROM BIEBER’S STOCKHOLDERS BY ISSUING 500 SHARES OF GAGA STOCK WHEN GAGA HAD A MARKET VALUE OF $5 PER SHARE. ON JANUARY 2 ND THE FAIR MARKET VALUE OF BIEBER’S EQUIPMENT WAS $1,100,000 AND THE FAIR MARKET VALUE OF BIEBER’S LAND WAS $50,000. BIEBER WILL CONTINUE TO EXIST AFTER THIS ACQUISITION REQUIRED: A) MAKE THE JOURNAL ENTRY GAGA MAKES WHEN IT ACQUIRES 80% OF THE STOCK OF BIEBER BY ISSUING ITS 500,000 SHARES B) MAKE THE JOURNAL ENTRY BIEBER MAKES WHEN ITS STOCKHOLDERS SELL 80% OF THEIR STOCK TO GAGA FOR GAGA STOCK C) PREPARE A CONSOLIDATED BALANCE SHEET ON JANUARY 3RD D) PREPARE ANY NECESSARY WORKSHEET ENTRIES NEEDED TO CONSTRUCT THE CONSOLIDATED BALANCE SHEET PROBLEM 4 (A CONTINUATION OF PROBLEM 3) AT THE END OF 2016 GAGA AND BIEBER HAD THE FOLLOWING FINANCIAL STATEMENTS: INCOME STATEMENT SALES SALARY EXPENSE DEPRECIATION EXP INVESTMENT INC. INCOME $ $ $ GAGA 3,000,000 400,000 1,000,000 a b $ $ $ $ $ BIEBER 200,000 50,000 100,000 50,000 BALANCE SHEET CASH A/R EQUIPMENT A/D EQUIPMENT LAND INVESTMENT IN BIEBER TOTAL ASSETS $ $ $ $ $ NOTE PAYABLE COMMON STOCK RETAINED EARNINGS 11,000,000 5,000,000 10,000,000 2,000,000 1,000,000 $ $ $ $ $ $ $ 630,000 200,000 1,000,000 200,000 200,000 1,830,000 $ 50,000,000 $ 800,000 $ 12,500,000 $ $ E 600,000 430,000 C D THE EQUIPMENT FOR BOTH BIEBER AND GAGA ARE DEPRECIATED USING STRAIGHT LINE WITH A 10 YEAR LIFE (FROM DATE OF PURCHASE) WITH NO SALVAGE VALUE HINT: DON’T FORGET DIVIDENDS, AND REMEMBER GAGA ONLY OWNS 80% OF BIEBER. REQUIRED: A.) FILL IN THE MISSING VALUES A TO E ON GAGA’S FINANCIAL STATEMENTS…YOU CAN USE ANY METHOD YOU CHOO (INITIAL VALUE, PARTIAL EQUITY OR FULL EQUITY) BUT YOU MUST LET ME KNOW WHICH METHOD YOU ARE USIN B.) C.) D.) MAKE THE JOURNAL ENTRIES GAGA MADE IN 2016 (AFTER ACQUISITION) DUE TO ITS INVESTMENT IN BIEBER PREPARE A CONSOLIDATED INCOME STATEMENT FOR 2016 PREPARE A CONSOLIDATED BALANCE SHEET FOR 2016 E.) SHOW THE WORKSHEET ENTRIES NEEDED TO PREPARE THE CONSOLIDATED BALANCE SHEET AND INCOME STATEMENT UING 500,000 E OF BIEBER’S FTER THIS G ITS 500,000 SHARES GAGA STOCK SHEET UING 500,000 EBER’S FTER THIS 00 SHARES GA STOCK RCH

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