Question #10: Argossey Corp owns a 70% equity interest in Gramcercy a subsidiary company. During the current year, Argossey sold off a small portion of their stock in Gramercy to an outside company. Before recording this transaction, Argossey adjusted the book value of its investment account. a) What is the purpose of Argossey adjusting its book value? b) How should the parent company record the transaction and what disclosure, if any, is required in the financial sttements and; c) How would Argossey account for the remainder of its investment subsequent to the sale of their partial interest in Gramercy

Question #10: Argossey Corp owns a 70% equity interest in Gramcercy a subsidiary company. During the current year, Argossey sold off a small portion of their stock in Gramercy to an outside company. Before recording this transaction, Argossey adjusted the book value of its investment account. a) What is the purpose of Argossey adjusting its book value? b) How should the parent company record the transaction and what disclosure, if any, is required in the financial sttements and; c) How would Argossey account for the remainder of its investment subsequent to the sale of their partial interest in Gramercy

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

required:1-prepare journal entries for pam corp to record its acquisition of sun corp, including all allocations to individual asset and liability accounts.2- prepare a balance sheet for pam corp on 1/2/2016 after the acquisition and disolution of Sun.
You work for an accountancy firm. You have been asked to provide advice to clients about the following transactions:On 1 October 2022, Shikipisha, a listed company, purchased 90% of the ordinary shares of Allan. Allan, which ceased trading one week prior to the share purchase, owns a manufacturing facility comprising of land and buildings as well as related equipment.The fair value of the land and buildings is similar to the fair value of the equipment. The acquisition of Allan only gained legal approval on the basis that all employees who worked at the facility are retained. There are no other assets, including any inventories, or processes transferred as part of the sale.Shikipisha proposes to account for the purchase of Allan as a business combination.Required:Advise whether the proposed treatments of the above two transactions are in accordance with IFS Standards.
Hope you could help me with this Accounting problem. Thanks in advance! <3
please make sure you are using the values in this question because they are differerent
9. ABC paid finder's fees of P80,000, legal fees of P26,000, audit fees related to stock issuance of P20,000, stock registration fees of P10,000 and stock listing application fees of P8,000. Based on the given information, under the acquisition method, what amount relating to business combination would be charged to expense?
please answer it with a solution. REQUIRED: DETERMINE THE FAIR VALUE OF THE SHARES ISSUED BY BENI CO. TO ACQUIRE PATTY.
Make journal entries for the parent company. For the amount of consideration given, you have to calculate it if 100% interest was acquired, then it is at book value.
After conducting a thorough review of the company’s fi nancial statements, Martinez concludes the following:Conclusion 1 Although Stellar’s fi nancial statements adhere to generally accepted accounting principles (GAAP), Stellar understates earnings in periods whenthe company is performing well and overstates earnings in periods whenthe company is struggling.Conclusion 2 Stellar most likely understated the value of amortizable intangibles whenrecording the acquisition of Solar, Inc. last year. No goodwill impairmentcharges have been taken since the acquisition.Conclusion 3 Over time, the accruals component of Stellar’s earnings is large relative tothe cash component.Conclusion 4 Stellar reported an unusually sharp decline in accounts receivable in thecurrent year, and an increase in long-term trade receivables.2 . Based on Conclusion 2, after the acquisition of Solar, Stellar’s earnings are most likely :A . understated.B . fairly stated.C . overstated
Please do not provide answer in image formate, thank you.
Question: Simmons Corporation owns stock of Armstrong, Inc. Prior to 2014, the investment was accounted for using the equity method. In early 2014, Simmons sold part of its investment in Armstrong, and began using the fair value method. In 2014, Armstrong earned net income of $80,000 and paid dividends of $95,000. Prepare Simmons's entries related to Armstrong's net income and dividends, assuming Simmons now owns 10% of Armstrong's stock.
Please help me with all answers thanku
HOW DOES A COMPANY REALLY DECIDE WHICH INVESTMENT METHOD TO APPLY? Pilgrim Products, Inc., buys a controlling interest in the common stock of Crestwood Corporation. Shortly after the acquisition, a meeting of Pilgrim's accounting department is convened to discuss the internal reporting procedures required by the ownership of this subsidiary. Each member of the staff has a definite opinion as to whether the equity method, initial value method, or partial equity method should be adopted. To resolve this issue, Pilgrim's chief financial officer outlines several of her concerns about the decision. I already understand how each method works. I know the general advantages and disadvantages of all three. I realize, for example, that the equity method provides more detailed information whereas the initial value method is much easier to apply. What I need to know are the factors specific to our situation that should be considered in deciding which method to adopt. I must make a recommendation…