Question 7 Correct Mark 10.00 out of 10.00Effect on consolidated net income of acquisition of affiliate's debt from non-affiliateA Parent Company owns 100 percent of its Subsidiary. During 2021, the Parent company reports net income (by itself, without any investment income from its Subsidiary) of $540,000 and the subsidiary reportsnet income of $216,000. The parent had a bond payable outstanding on January 1, 2021, with a carrying value equal to $453,600. The Subsidiary acquired the bond on January 1, 2021, for $426,600 During 2021,the Parent reported interest expense (related to the bond) of $37,800 while the Subsidiary reported interest income (related to the bond) of $34,560. What is consolidated net income for the year endedDecember 31, 2021?Select one:a. $783,000b. $756,000c. $759,240d. $786,240Remove flagCheck

The objective of the question is to calculate the consolidated net income for the year ended…

Answered: Question 7 Correct Mark 10.00 out of…

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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Grumpy A. 6,000B. 7,650C. 7,500D. 6,150
if the retained earning is 350,000 December 31, 2021 WHAT IS THE NON-CONTROLLING INTEREST TO BE REPORTED IN THE CONSOLIDATED FINANCIAL STATEMENT ON DEMEBER 31,2021 no changes were made in the oridnary shares of the subsidiary
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12 Find Corp. is a joint arrangement in which Seek Inc. has a 20% interest. Although Find Corp. is an incorporated entity, it is accounted for as a joint operation. A contractual agreement gives Seek proportionate rights (20%) to all of Finds' assets and proportionate responsibilities (20%) for all of Find's liabilities. The financial statements of both businesses as at December 31, 2020, include the following information: Seek Inc. Find Corp. INCOME STATEMENTS Sales Cost of Sales $800,000 $200,000 $400,000 $100,000 Other Expenses $200.000 $60.000 Net Income $200,000 $40,000 BALANCE SHEETS Miscellaneous Assets $600,000 $300,000 Inventory $120,000 $60,000 Investment in Find $180.000 Total Assets $900,000 $360,000 Miscellaneous Liabilities $160,000 $80,000 Common Shares $200,000 $100,000 Retained Earnings, Jan 1 $340,000 $140,000 Net Income $200.000 $40.000 Total Liabilities & Equity $900,000 $360,000 Show Transcribed Text During 2020, Seek sold merchandise totaling $120,000 to Find and…
Assuming the retained earnings of Subsidiary on December 31, 2021 is P350,000, determine the non-controlling interest to be reported in the consolidated financial statements on December 31, 2021 assuming no changes to Subsidiary company's ordinary shares.
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Noncontrolling interest and intercompany sale of depreciable assets Assume on January 1, 2018, a parent company acquired a 75% interest in a subsidiary’s voting common stock. On the date of acquisition, the fair value of the subsidiary’s net assets equaled their reported book values. On January 1, 2020, the subsidiary purchased a building for $777,600 The building has a useful life of 8 years and is depreciated on a straight-line basis with no salvage value. On January 1, 2022, the subsidiary sold the building to the parent for $648,000 The parent estimated that the building had a six-year remaining useful life and no salvage value. The parent also uses the straight-line method of amortization. For the year ending December 31, 2022, the parent’s “stand-alone” income (i.e., net income before recording any adjustments related to preconsolidation investment accounting) is $810,000 . The subsidiary’s recorded net income is $162,000. Based on this information, determine the balance for…
Pushdown Accounting Assume a parent company acquires its subsidiary by paying $1,700,000 for all of the outstanding voting shares of the investee. On the acquisition date, subsidiary's assets and liabilities have individual fair values that equal their book values, except for property equipment with a fair value greater than book value by $150,000 and license with a fair value greater than book value by $250,000. The parent and subsidiary have the following balance sheets immediately after the acquisition, but before any pushdown adjustments by the subsidiary: Parent Parent Subsidiary Assets: Cash & receivables $ 800,000 $ 350,000 Inventory 600,000 200,000 Property & equipment, net 2,300,000 1,025,000 Equity investment 1,700,000 Licenses - 275,000 $ 5,400,000 $ 1,850,000 Liabilities and stockholders' equity: Current liabilities $ 400,000 $ 400,000 Other liabilities 300,000 - Note payable - 600,000 Common stock 1,670,000…
A-6
The profit attributable to equity holders of parent/controlling interest (parent’s interests) in consolidated net income for 2019
Effects on consolidated financial statements of acquisition of affiliate's debt from non-affiliate On January 1, 2022, a Parent company has a debt outstanding that was originally issued at a discount and was purchased, on issuance, by an unaffiliated party. On January 1, 2022, a Subsidiary of the Parent purchased the debt from the unaffiliated party. The debt was purchased by the Subsidiary at a slight premium. The Parent is a calendar year company. Which one of the following statements is true? The consolidated balance sheet at December 31, 2022 will report none of the debt, and the consolidated income statement for the year ended December 31, 2022 will report a gain or loss from constructive retirement of the debt and will not report any interest expense from the debt. The consolidated balance sheet at December 31, 2022 will report the debt, and the consolidated income statement for the year ended December 31, 2022 will not report any interest expense from the debt. The consolidated…

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