rroDiems 19 through 21 should be viewed as independent situations. They are based on the following data:Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy hasthe following trial balance:Page 136DebitCreditAccounts payable$ 50,000Accounts receivable$ 40,000Additional paid-in capitalBuildings (net) (4-year remaining life)50,000120,000Cash and short-term investments60,000Common stock250,000Equipment (net) (5-year remaining life)Inventory200,00090,000Land80,000Long-term liabilities (mature 12/31/23)150,000Retained earnings, 1/1/20100,000Supplies10,000$600,000$600,000TotalsDuring 2020, Abernethy reported net income of $80,000 while declaring and paying dividends of $ 10,000. During 2021, Abernethyreported net income of $110,000 while declaring and paying dividends of $30,000.LO 3-3a1. Assume that Chapman Company acquired Abernethy's common stock for $490,000 in cash. As of January 1, 2020, Abernethy's landhad a fair value of $90,000, its buildings were valued at $160,000, and its equipment was appraised at $180,000. Chapman uses theequity method for this investment. Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021.LO 3-3b

Consolidated worksheet Consolidated financial statements of a parent and its subsidiaries are…

Answered: based on the following data: Page 136…

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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Marigold Inc. has outstanding 10,600 shares of $10 par value common stock. On July 1, 2020, Marigold reacquired 105 shares at $87 per share. On September 1, Marigold reissued 62 shares at $91 per share. On November 1, Marigold reissued 43 shares at $84 per share. Prepare Marigold's journal entries to record these transactions using the cost method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit 11/1/20
Tiger Ltd. has an authorized capital of 700,000 $1 ordinary shares, of which 300,000 have been issued as fully paid. The following information was extracted from the accounts for the year ended September 30, 2019: Details/Accts. $ DR $ CR Motor Vehicle at cost 1,750,000 Acc. Depreciation Motor Vehicle 450,000 Freehold premises at cost 400,000 Carriage inwards 35,500 Sales 4,500,000 Stock, October 1, 2018 95,000 Administration (Wages and Salaries) 170,000 Distribution (Wages and Salaries) 250,000 Motor vehicle running costs 350,000 Purchases 935,000 Returns inward 32,000 Returns outward 51,000 Directors’ remuneration 865,000 Auditors’ fees 120,000 General administrative expenses…
On December 15, 2021, Blue Company paid $100,000 for 8,000 shares of Marble Company common stock. The ownership in Marble Company is 10%. Marble reported net income of $64,000 for the year ended December 31, 2021. The fair value of the Marble stock on that date was $54 per share. What amount will be reported in the balance sheet of Blue Company for the investment in Marble at December 31, 2021? Multiple Choice There is no correct answer. $387,000. $357,000. $372,000. $432,000.
Rancho Cucamonga, Inc. presents the following excerpts from its December 31, 2020 balance sheet: Long-Term Liabilities: Note payable, 8% $200,000 Bonds payable, 10% 1,000,000 Shareholders’ Equity Common stock, par 50,000 Additional paid-in-capital, common stock 350,000 Total contributed capital 400,000 Retained earnings 250,000 Total shareholders’ equity 650,000 The accounting department also conveys the following information: Risk-free rate of return - 3% Risk premium - 4.05% Tax rate – 30% Requirement: Compute Rancho Cucamonga’s weighted average cost of capital.
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2020. As of that date, Abernethy has the following trial balance: Debit Credit Accounts payable $ 54,100 Accounts receivable $ 48,500 Additional paid-in capital 50,000 Buildings (net) (4-year remaining life) 130,000 Cash and short-term investments 66,000 Common stock 250,000 Equipment (net) (5-year remaining life) 437,500 Inventory 109,000 Land 89,000 Long-term liabilities (mature 12/31/23) 178,500 Retained earnings, 1/1/20 358,800 Supplies 11,400 Totals $ 891,400 $ 891,400 During 2020, Abernethy reported net income of $126,000 while declaring and paying dividends of $16,000. During 2021, Abernethy reported net income of $174,000 while declaring and paying dividends of $49,000. Assume that Chapman Company acquired Abernethy’s common stock for $773,550 in cash. As of…
January 1, 2019 SOS company invested 2,400,000 $ for75% of RAT company, in that date the fair value of RAT is equal to its book value except inventories was undervalued 20,000, equipment (10years) undervalued 80,000 ,6% 5 years bonds undervalued 60,000. The owner’s equity was $1,300,000 shares, 900,000 premiums and 600,000 as retained earnings, the following are selective information about the parent and its subsidiary: During 2019 1- The subsidiary reported net income for 2019 was$152,000 and declared and paid $50000 dividend. During 2020 2- 1/1/ 2020 the parent sold a land cost 200,000 for $220,000. The reported income for the subsidiary was 90,000 and 10,000 dividends 3- 1/1/ 2020 the subsidiary sold an equipment for parent for 120,000 and net book value 110,000, five years remaining use life. 4- 1/11/2020 the parent sold goods for 250,000 including 25% markup, the subsidiary ending inventory include 60000$ inventory from parent. 5- The subsidiary sold goods at 150,000 which…
The Trial balance of T. Cayanan Corporation as of Dec. 31, 2021, contained the following selected balances: 15% Mortgage Payable, due May 1, 2022 Allowance for Uncollectible Accounts P5,000,000 50,000 8,000,000 Ordinary Shares, no-par, P20 stated value; 300,000 shares authorized, issued, and outstanding Retained Earnings-Unappropriated Appropriation for Pending Litigation 6% Preference Shares, P200 par, 3,000 shares authorized, 1,000,000 600,000 500,000 issued and outstanding Donated Capital Share Premium-Ordinary 400,000 10,000 Required: Present the shareholders' equity section of the statement of financial position as of Dec. 31, 2021.
Oriole, Inc. had the following equity investment portfolio at January 1, 2020. Evers Company 970 shares @ $14 each $13,580 Rogers Company 910 shares @ $18 each 16,380 Chance Company 500 shares @ $9 each 4,500 Equity investments @ cost 34,460 Fair value adjustment (7,840 ) Equity investments @ fair value $26,620 During 2020, the following transactions took place. 1. On March 1, Rogers Company paid a $2 per share dividend. 2. On April 30, Oriole, Inc. sold 290 shares of Chance Company for $11 per share. 3. On May 15, Oriole, Inc. purchased 90 more shares of Evers Company stock at $17 per share. 4. At December 31, 2020, the stocks had the following price per share values: Evers $18, Rogers $17, and Chance $8. During 2021, the following transactions took place. 5. On February 1, Oriole, Inc. sold the remaining Chance shares for $8 per share. 6. On March 1, Rogers Company paid a $2 per share dividend.…
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the following trial balance: Debit Credit $ 57,300 Accounts payable Accounts receivable $ 42,200 Additional paid-in capital 50,000 214,000 Buildings (net) (4-year remaining life) Cash and short-term investments Common stock 82,250 250,000 Equipment (net) (5-year remaining Life) 375,000 Inventory 90,500 Land 117,000 170,000 Long-term liabilities (mature 12/31/23) Retained earnings, 1/1/20 409,650 Supplies 16,000 Totals $936,950 $ 936,950 During 2020, Abernethy reported net income of $117,500 while declaring and paying dividends of $15,000. During 2021, Abernethy reported net income of $171,250 while declaring and paying dividends of $55,000. Assume that Chapman Company acquired Abernethy's common stock for $816,280 in cash. Assume that the equipment and long-term liabilities had fair values of $396,950 and $140,720, respectively, on the acquisition date. Chapman uses the…
e of cents Price Company purchased 90% of the outstanding common stock of Score Company on January 1, 2016, for $450,000. At that time, Score Company had stockholders' equity consisting of common stock, $200,000; other com $160,000; and retained earnings, $90,000. On December 31, 2020, trial balances for Price Company and Score Company were as follows: Price $ 109,000 $ Cash Accounts Receivable Note Receivable Inventory Investment in Score Company Plant and Equipment Land Score 78,000 94,000 -0- 166,000 75,000 309,000 158,000 450,000 -0- 940,000 420,000 160,000 70,000 70,000 50,000 822,000 242,000 250,500 124,000 Dividends Declared Cost of Goods Sold Operating Expenses Total Debits Accounts Payable Notes Payable Common Stock $3,351,500 $1,236,000 $ 132,000 $ 46,000 300,000 120,000 500,000 200,000 260,000 160,000 Other Contributed Capital Retained Earnings, 1/1 Sales Dividend and Interest Income Total Credits 687,000 1,420,000 52,500 $3.351,500 $1,236,000 210,000 500,000 -0- Price…
Smallville Company was organized on January 1, 2020. It is authorized to issue 102000 shares of $120 par value common stock. At the beginning of April, the ledger of Smallville Company carried the following balances to their respective accounts. Cash-$58000, Merchandise Inventory- $75800, Prepaid Insurance-$4900, 10% Notes Payable-$25200, Equipment-$143000, Accumulated Depreciation: Equipment-$3700, Common Stock-$124000, Paid in capital in excess of par value: Common Stock-$24000, and Retained Earnings-$104800. The following transactions took place in Smallville Company during April of the current year (2020). April 1 - Issued $2500 new shares of common stock for $346000 April 3 - Purchased merchandise of $7500 on account from Prescott Co., terms FOB destination, 2/10, n/30. The appropriate party paid the freight charge of $300. April 4 - Sold merchandise for cash, $83600. The cost of the merchandise sold was $48000. April 5 - Purchased merchandise on account from Stafford Co., $23000,…
Larkspur Company has the following securities in its investment portfolio on December 31, 2020 (all securities were purchased in 2020): (1) 2,800 shares of Anderson Co. common stock which cost $50,400, (2) 10,800 shares of Munter Ltd. common stock which cost $604,800, and (3) 6,300 shares of King Company preferred stock which cost $270,900. The Fair Value Adjustment account shows a credit of $10,400 at the end of 2020. In 2021, Larkspur completed the following securities transactions. 1. On January 15, sold 2,800 shares of Anderson's common stock at $20 per share less fees of $2,160. 2. On April 17, purchased 900 shares of Castle's common stock at $33 per share plus fees of $2,030. On December 31, 2021, the market prices per share of these securities were Munter $65, King $40, and Castle $25. In addition, the accounting supervisor of Larkspur told you that, even though all these securities have readily determinable fair values, Larkspur will not actively trade these securities because…

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