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a. What balance does Haynes's Investment in Turner account show on December 31, 2021, when the equity method is applied? b. What is the consolidated net income for the year ending December 31, 2021? c-1. What is the consolidated equipment balance as of December 31, 2021? c-2. Would this answer be affected by the investment method applied by the parent? d. Prepare entry "C for the beginning of the Retained Earnings account on a December 31, 2021 by using initial value, partial equity and equity method.

a. What balance does Haynes's Investment in Turner account show on December 31, 2021, when the equity method is applied? b. What is the consolidated net income for the year ending December 31, 2021? c-1. What is the consolidated equipment balance as of December 31, 2021? c-2. Would this answer be affected by the investment method applied by the parent? d. Prepare entry "C for the beginning of the Retained Earnings account on a December 31, 2021 by using initial value, partial equity and equity method.

FINANCIAL ACCOUNTING
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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Problem 3-15 (Algo) (LO 3-3, 3-4) Haynes, Inc., obtained 100 percent of Turner Company's common stock on January 1, 2020, by issuing 9,600 shares of $10 par value common stock. Haynes's shares had a $15 per share fair value. On that date, Turner reported a net book value of $97,500. However, its equipment (with a five-year remaining life) was undervalued by $6,700 in the company's accounting records. Also, Turner had developed a customer list with an assessed value of $39,800, although no value had been recorded on Turner's books. The customer list had an estimated remaining useful life of 10 years. The following balances come from the individual accounting records of these two companies as of December 31, 2020: Revenues Expenses Investment income. Dividends declared. $ Revenues Expenses Investment income Dividends declared Equipment Haynes Turner (721,000) $ (392,000) 481,000 Not given. 185,000 120,000 $ 0 The following balances come from the individual accounting records of these two companies as of December 31, 2021: 100,000 Haynes Turner 216,300 (862,000) $ (446,750) 508,700 Not given 130,000 504,000 0 90,000 341,000 a. What balance does Haynes's Investment in Turner account show on December 31, 2021, when the equity method is applied? b. What is the consolidated net income for the year ending December 31, 2021? c-1. What is the consolidated equipment balance as of December 31, 2021? c-2. Would this answer be affected by the investment method applied by the parent? d. Prepare entry *C for the beginning of the Retained Earnings account on a December 31, 2021 by using initial value, partial equity and equity method.
Transcribed Image Text:Problem 3-15 (Algo) (LO 3-3, 3-4) Haynes, Inc., obtained 100 percent of Turner Company's common stock on January 1, 2020, by issuing 9,600 shares of $10 par value common stock. Haynes's shares had a $15 per share fair value. On that date, Turner reported a net book value of $97,500. However, its equipment (with a five-year remaining life) was undervalued by $6,700 in the company's accounting records. Also, Turner had developed a customer list with an assessed value of $39,800, although no value had been recorded on Turner's books. The customer list had an estimated remaining useful life of 10 years. The following balances come from the individual accounting records of these two companies as of December 31, 2020: Revenues Expenses Investment income. Dividends declared. $ Revenues Expenses Investment income Dividends declared Equipment Haynes Turner (721,000) $ (392,000) 481,000 Not given. 185,000 120,000 $ 0 The following balances come from the individual accounting records of these two companies as of December 31, 2021: 100,000 Haynes Turner 216,300 (862,000) $ (446,750) 508,700 Not given 130,000 504,000 0 90,000 341,000 a. What balance does Haynes's Investment in Turner account show on December 31, 2021, when the equity method is applied? b. What is the consolidated net income for the year ending December 31, 2021? c-1. What is the consolidated equipment balance as of December 31, 2021? c-2. Would this answer be affected by the investment method applied by the parent? d. Prepare entry *C for the beginning of the Retained Earnings account on a December 31, 2021 by using initial value, partial equity and equity method.
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