Match the following. Answers may be used more than once:

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Wall Company purchased $1,200,000, 7 percent bonds issued by Janice Company on January 1, 2010. The purchase price of the bonds was $1,250,000. Interest is payable semiannually each June 30 and December 31. Record the purchase of the bonds on January 1, 2010.

During 2011, Princeton Company acquired some of the 50,000 outstanding shares of the common stock, par $12, of Cox Corporation as trading securities. The accounting period for both companies ends December 31. Give the journal entries for each of the following transactions that occurred during 2011:

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Using the data in M12–3, assume that Princeton Company purchased the voting stock of Cox Corporation for the available-for-sale portfolio instead of the trading securities portfolio. Give the journal entries for each of the transactions listed.

Using the following categories, indicate the effects of the transactions listed in M12–3 assuming trading securities. Use + for increase and − for decrease and indicate the amounts.

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Using the following categories, indicate the effects of the transactions listed in M12–3 assuming securities available for sale. Use + for increase and − for decrease and indicate the amounts.

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On January 1, 2011, Ubuy.com acquired 30 percent (1,200,000 shares) of the common stock of E-Net Corporation. The accounting period for both companies ends December 31. Give the journal entries for each of the following transactions that occurred during 2011:

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Using the following categories, indicate the effects of the transactions listed in M12–7. Use + for increase and − for decrease and indicate the accounts affected and the amounts.

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Philadelphia Textile Company acquired Boston Fabric Company for $590,000 cash when Boston’s only assets, property and equipment, had a book value of $590,000 and a market value of $650,000. Philadelphia also assumed Boston’s bonds payable of $125,000. After the acquisition, Boston would cease to exist as a separate legal entity after merging with Philadelphia. Record the acquisition.

M.A.D. Company reported the following information at the end of each year:

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Compute return on assets for 2010, 2011, and 2012. What do the results suggest about M.A.D. Company?

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Disney owns theme parks, movie studios, television and radio stations, newspapers, and television networks, including ABC and ESPN. Its balance sheet recently reported goodwill in the amount of $22 billion, which is more than 33 percent of the company’s total assets. This percentage is very large compared to that of most companies. Explain why you think Disney has such a large amount of goodwill reported on its balance sheet.

The Walt Disney Company