On December 31, 2020, Splish Company purchased a controlling interest in Novak Company for $1,320,000. The consolidated balance sheet on December 31, 2020 reported noncontrolling interest in Novak Company of $330,000 On the date of acquisition, the stockholders' equity section of Novak Company's balance sheet was as follows: Common stock Other contributed capital Retained earnings Total (a) (b) $585,000 435,000 Common Stock-Splish 410,000 Prepare the investment elimination entry made to prepare a consolidated balance sheet workpaper. Any difference between book value and the value implied by the purchase price relates to subsidiary land. Creat occount titles are outomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries) $1,450,000 Account Titles and Explanation Retained Earnings-Splish Investment in Splish Company Other Contributed Capital-Splish Debit 1320000 Credit 585000 435000

On December 31, 2020, Splish Company purchased a controlling interest in Novak Company for $1,320,000. The consolidated balance sheet on December 31, 2020 reported noncontrolling interest in Novak Company of $330,000 On the date of acquisition, the stockholders' equity section of Novak Company's balance sheet was as follows: Common stock Other contributed capital Retained earnings Total (a) (b) $585,000 435,000 Common Stock-Splish 410,000 Prepare the investment elimination entry made to prepare a consolidated balance sheet workpaper. Any difference between book value and the value implied by the purchase price relates to subsidiary land. Creat occount titles are outomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries) $1,450,000 Account Titles and Explanation Retained Earnings-Splish Investment in Splish Company Other Contributed Capital-Splish Debit 1320000 Credit 585000 435000

Name: On December 31, 2020, Splish Company purchased a controlling interest
Uploaded: 2024-03-04T10:43:15.000Z
Channel: Bartleby
Description: On December 31, 2020, Splish Company purchased a controlling interest in Novak Company for $1,320,000. The consolidated balance sheet on December 31, 2020 reported noncontrolling interest in Novak Company of $330,000.On the date of acquisition, the

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

See similar textbooks

Similar questions

During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 loss
On January, 2020, P Company acquired 90% of S Company in exchange for 5,400 shares of P10 par common stock having a market value of P120,600. P and S condensed balance sheet where as follows: Requirements: Compute the following:1. Partial goodwill on Jan. 1, 20202. Non-controlling interest (in net assets) on Jan. 1, 20203. Consolidated Retained Earnings, Jan. 1, 20204. Equity Holders of Parent - Retained Earnings, Jan. 1, 20205. In addition to the information, assuming that on Dec. 31, 2020, the following results were given: Dividends Paid Net IncomeP Company P 15,000 P 30,200S Company 4,000 9,400 Using cost method to record results of operations, compute the Investment balance on Dec. 31, 20206. Dividend income for 2020 using cost method.7. Non-controlling interest in Net Income on Dec. 31, 2020.8. Non-controlling interest on Dec. 31, 2020.9. Profit for the period attributable to Equity Holders of Parent on Dec. 31, 2020.10. Consolidated/Group Net Income on Dec. 31, 2020.11.…
A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
On January 1, 2024, Coronado Company purchased 8,208 shares of Whispering Company's common stock for $124,000. Immediately after the stock acquisition, the statements of financial position of Coronado and Whispering appeared as follows: Assets Cash Accounts receivable Inventory Investment in Whispering Company Plant assets Accumulated depreciation-plant assets Total Liabilities and Owners' Equity Current liabilities Mortgage notes payable Common stock, $10 par value Other contributed capital Retained earnings Total (a2) Coronado $38,250 57,310 42,270 124,000 144,750 (56,310) $350,270 : Whispering $17,170 28,620 25,000 107,510 (19,510) $158,790 $17,080 40,190 111,980 $ 126,260 54,760 $350,270 Prepare a schedule to compute the difference between book value of equity and the value implied by the purchase price. Any difference between the book value of equity and the value implied by the purchase price relates to subsidiary plant assets. Parent Share $ $26,620 $ 102,600 16,790 12,780…
On 1 July 2021, James Ltd acquired all the issued shares of Dean Ltd for $350,000. At this date, the financial statements of Dean Ltd showed the following: $ Share capital 270,000 Retained earnings 26,500 General Reserve 8,800 Total equity 305,300 Goodwill 25,000 At acquisition date, all the net identifiable assets and liabilities in Dean Ltd were recorded at amounts equal to their fair value except for: Asset Carrying amount ($) Fair Value ($) Inventories 15,000 18,000 Plant (cost $400,000) 210,000 220,000 The Plant was calculated to have a further life of 5 years, and was depreciated on a straight-line basis. All inventory was sold by 30 June 2020. Assume 30% tax rate Required: Prepare the acquisition analysis at 1 July 2021. Prepare the consolidation entries at acquisition date, 1 July 2021. Include narrations for each entry. Prepare the consolidation worksheet as at 1 July 2021. Prepare a Balance sheet for the reporting Group, James Ltd as at 1 July 2021 in narrative format.
Company P acquired 90 percent of the common stock of Company S on 1/1/2020. During 2020, Company S reported a net income of $50,000 and dividends of $12,000. Company P uses the simple equity method to account for the investment in S. Which of the following entries is prepared by Company P when consolidating the financial statements for 2020? Debit Subsidiary Income $45,000, Credit Investment in S $45,000 Debit Investment in S $45,000, Credit Subsidiary Income $45,000 Debit Dividends Receivable $10,800, Credit Subsidiary Income $10,800 Debit Subsidiary Income $10,800, Credit Dividends Declared $10,800
In the December 21, 2021 consolidated statement of financial position, the net income attributable to equity holders of ABC should be presented at: Do not forget if there is any upstream and downstream
On January 1, 2024, Coronado Company purchased 8,208 shares of Whispering Company's common stock for $124,000. Immediately after the stock acquisition, the statements of financial position of Coronado and Whispering appeared as follows: Assets Cash Accounts receivable Inventory Investment in Whispering Company Plant assets Accumulated depreciation-plant assets Total (b) Liabilities and Owners' Equity Current liabilities Prepare a consolidated balance sheet workpaper as of January 1, 2024. Mortgage notes payable Common stock, $10 par value Other contributed capital Retained earnings Total Cash Accounts Receivable Inventory Investment in Whispering Total Difference between Implied and Book Value Plant Assets Accumulated Depreciation Current Liabilities Mortgage Note Payable Common Stock: Coronado Company Whispering Company Other Contributed Capital Coronado Company Whispering Company Total Retained Earnings: Coronado Company Whispering Company Noncontrolling Interest 38,250 Coronado…
The following are summarized Balance Sheets as on March 31, 2020 H. Ltd. acquired 80% shares in S Ltd. on October 1, 2019 for $ 2,000. At the date of acquisitionall the assets and liabilities of S Ltd were reflected at fair valueThe Retained earnings of S Ltd. on April 1, 2019 was $ 200H Ltd measures the Non Controlling Interest at its proportionate share of the acquiree's netidentifiable assets.S Ltd transferred goods to H Ltd at a transfer price of $ 300. The sales policy of H Ltd is to add50 % of mark up to its cost. Two-thirds remained in inventory at the year end. Required : Calculate goodwill at the date of acquisition and unrealized profit for holding company
On July 31, 2020, Swifty Company paid $3,540,000 to acquire all of the common shares of Blue Spruce Incorporated, which became a division of Swifty. Blue Spruce reported the following statement of financial position at the time of the acquisition Blue Spruce Inc. Statement of Financial Position As at July 31, 2020 Current assets $944,000 Current liabilities $708.000 Non-current assets 3.186.000 Long-term liabilities 590.000 Shareholders'equity 2832.000 Total liabilities and Total assets $4.130.000 shareholders equity $4.130.000 Itwas determined at the date of the purchase that the fair value of the identifiable net assets of Blue Spruce was $3.245,000. Over the next six months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foresecable future. At December 31, 2020, Blue Spruce reports the following statement of financial position information: Current assets 531.000 Non-current assets…
On 1 May 2019, PR Corp purchased 75 per cent of the equity of SS Corp for $2.6 million. The consideration was 35,000 equity shares in PR Corp with a fair value of $2.6 million. The followings are extracts from the draft (not finalised) statements of profit or loss for PR Corp and its subsidiary SS Corp for the year ending 30 June 2019 together with the draft statements of financial position as at 30 June 2019. The profits of SS Corp have been earned evenly throughout the year 2019. Statements of profit or loss for the year ending 30 June 2019 PR Corp ($000) SS Corp ($000) Gross profit 1,456 960 Profit for the year 920 384 Statements of financial position as at 30 June 2019 PR Corp ($000) SS Corp ($000) Share capital 2,800 740 Retained earnings 11,600 1,324 Revaluation surplus 120 - 14,520 2,064 PR Corp has not yet accounted for the issue of its own…