On 1 January 2000, K Ltd acquired 60% of the shares in V ltd for $400,000. Consideration tookthe form of cash $300,000, and shares with a fair value of $200,000At that date the owner's equity of V ltd comprisedShares capital$300,000Retained earnings$200,000$100,000Revaluation surplusTotal$600,000On 1 January 2000, the fair values of all assets and liabilities of V Ltd were recorded in fair valuewith the exception of inventory which had a fair value $50,000 greater than book value. Theinventory was all sold before 30 June 2000.• Both companies use the periodic method to account for inventory.●The company income tax rate is 30%.K Ltd has a financial year end of 30 June.●The fair value of the non-controlling interest is estimated to be $260,000.K Ltd uses the 100% goodwill method to measure NCI. Required:(1) Provide the necessary consolidation journal entries for the year ended 30 June 2000. Narrationsare not required.(ii) Post your journal entries to the consolidation worksheet on 30 June 2000 and calculateconsolidated amounts for Share capital, Retained earnings and Revaluation Surplus.K Ltd V Ltd Dr Cr ConsolidatedShare capital600,000300,000Retained earnings400,000 240,000Revaluation surplus 300,000 120,000(iii) Calculate the amount of goodwill in the consolidated financial statement or the K Ltd Groupin relation to the investment in V Ltd at acquisition date.

Particulars DR/CR Amount($) on 30 June,2000: on the date of consolidation V Ltd DR 6,00,000…

1) Provide the necessary consolidation journal entries for the year ended 30 June 2000 are not required. (ii) Post your journal entries to the consolidation worksheet on 30 June 2000 a consolidated amounts for Share capital, Retained earnings and Revaluation Surplus. K Ltd Y I td Cr Consolidated

1) Provide the necessary consolidation journal entries for the year ended 30 June 2000 are not required. (ii) Post your journal entries to the consolidation worksheet on 30 June 2000 a consolidated amounts for Share capital, Retained earnings and Revaluation Surplus. K Ltd Y I td Cr Consolidated

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Assume that both the Parent and Subsidiary adopt 31 December as their financial year-end. Further assume that the transactions were conducted on cash basis. (i) Prepare all the relevant journal entries in the separate financial statements of the respective companies. (ii) Prepare all the relevant consolidation journal entries for the preparation of the consolidated financial statements of the Parent. (iii) Compare and contrast the accounting treatment/principles that you had applied in the independent scenarios in each part in preparing the journal entries and consolidation journal entries. (c)On 20 December 20x1, a 70%owned Subsidiary sold a piece of inventory Z which it bought for $300,000 to its Parent for $200,000. As at 31 December 20x1, that piece of inventory was still with the Parent and the net realisable value of the inventory was $190,000 on this date.
Describe how, despite the fact they include different accounts, conceptually, the [C] entry under the equity method of pre-consolidation bookkeeping is the same as the [C] entry under the cost method of pre-consolidation bookkeeping.
6
Problem 2At December 31, 20x4, Baby Corporation acquired all of Mommy Enterprises’ common stock. At that date, the book Values and fair values of Mommy’s identifiable assets and liabilities were identical. Balance sheet data for the individual companies and the consolidated entity on January 1, 20x5, are as follows: 1. Assuming there were no inventory transactions between the companies, what balance for inventory should be reported in the consolidated balance sheet?a. P 0b. P90,000c. P120,000d. P210,0002. What amount did Baby pay to acquire Mommy? Was this amount equal to, greater than, or less than underlying book value? How do you know?a. P110,000; P30,000 greater thanb. P110,000; P30,000 less thanc. Zero; P30,000 less thand. Zero; P30,000 greater than 3. Baby sold land it had purchased 12 years earlier for P10,000 to Mommy immediately after it acquired Mommy. At what price did baby sell the land to Mommy?a. P10,000b. P15,000c. P25,000d. P40,000
Assume that both the Parent and Subsidiary adopt 31 December as their financial year-end. Further assume that the transactions were conducted on cash basis. For each of the following independent scenarios in each of the independent parts: (1) Prepare all the relevant journal entries in the separate financial statements of the respective companies. (ii) Prepare all the relevant consolidation journal entries for the preparation of the consolidated financial statements of the Parent. (iii) Compare and contrast the accounting treatment/principles that you had applied in the independent scenarios in each part in preparing the journal entries and consolidation journal entries. Part A (a) On 20 December 20x1, a 90%-owned Subsidiary sold a piece of inventory which it bought for $200,000 to its Parent for $300,000. As at 31 December 20x1, that piece of inventory was still with the Parent and the net realisable value of the inventory was $250,000 on this date. (b) On 20 December 20x1, a Parent…
Consolidated Worksheet Preparation You will be creating and entering formulas to complete four worksheets. The first objective is to demonstrate the effect of different methods of accounting for the investments (equity, initial value, and partial equity) on the parent company’s trial balance and on the consolidated worksheet subsequent to acquisition. The second objective is to show the effect on consolidated balances and key financial ratios of recognizing a goodwill impairment loss. Project Scenario Pecos Company acquired 100 percent of Suaro’s outstanding stock for $1,450,000 cash on January 1, 2017, when Suaro had the following balance sheet:(THIS IS IN THE PICTURE) Following is the consolidated information worksheet. December 31, 2018, trial balances Pecos Suaro revenues $ (1,052,000) $ (427,000) operating expenses $ 821,000 $ 262,000 goodwill impairment loss ? income of Suaro ? net income ? $…
Requirements:1. Prepare the worksheet for consolidation purposes and the related eliminating entries on January1, 20x9 and December 31, 20x192. How much is the goodwill to be reported on the consolidated balance sheet on January 1, 2x19?3. How much is the Non-controlling interest on January 1, 2x19?
PLEASE SOLVE PART E
Problem 2At December 31, 20x4, Baby Corporation acquired all of Mommy Enterprises’ common stock. At that date, the book Values and fair values of Mommy’s identifiable assets and liabilities were identical. Balance sheet data for the individual companies and the consolidated entity on January 1, 20x5, are as follows: 1.What balance will be reported as accounts payable in the consolidated balance sheeta. P10,000b. P55,000c. P 75,000d. P120,000 2. What is the par value of baby common stock outstanding at January 1, 20x5? a. No-par b. P30,000c. P100,000d. P130,000
Subject :- Accounting
Do not use negative signs with your answers below. Reconciliation of Cost to Equity Method Parent's pre-consolidation net income 401000 v Dividend Income 81000 v P% x Net income of subsidiary P% x AAP amortization 0 x Net income attributable to controlling interest $ 0 x b. Prepare the consolidated income statement for the current year. Do not use negative signs with your answers below. Consolidated Income Statement Sales $ 12200000 v Cost of goods sold 8120000 v Gross profit 4080000 v Operating expenses 0 x Net income Net income attributable to noncontrolling interests 0 x Net income 0 x
Please Solve with Explanation and Do not give image format