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Subsidiary Company S had the following stockholders’ equity on December 31, 2017, prior to distributing a 10% stock dividend: Common stock ($1 par), 100,000 shares issued and outstanding . . . . . . . Paid-incapitalinexcessofpar .................................. Retainedearnings ............................................ Totalequity ............................................... $    100,000 1,900,000 2,000,000 $4,000,000 The fair value of the shares distributed is $50 each. What is the effect of this dividend on the subsidiary equity, the investment account, and the December 31, 2017, elimi- nation procedures? Assume the parent uses the simple equity method to account for its investment in the subsidiary.

Subsidiary Company S had the following stockholders’ equity on December 31, 2017, prior to distributing a 10% stock dividend: Common stock ($1 par), 100,000 shares issued and outstanding . . . . . . . Paid-incapitalinexcessofpar .................................. Retainedearnings ............................................ Totalequity ............................................... $    100,000 1,900,000 2,000,000 $4,000,000 The fair value of the shares distributed is $50 each. What is the effect of this dividend on the subsidiary equity, the investment account, and the December 31, 2017, elimi- nation procedures? Assume the parent uses the simple equity method to account for its investment in the subsidiary.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Subsidiary Company S had the following stockholders’ equity on December 31, 2017, prior to distributing a 10% stock dividend: Common stock ($1 par), 100,000 shares issued and outstanding . . . . . . . Paid-incapitalinexcessofpar .................................. Retainedearnings ............................................ Totalequity ............................................... $    100,000 1,900,000 2,000,000 $4,000,000 The fair value of the shares distributed is $50 each. What is the effect of this dividend on the subsidiary equity, the investment account, and the December 31, 2017, elimi- nation procedures? Assume the parent uses the simple equity method to account for its investment in the subsidiary. 

= ធ 458 Worksheet 8-1 Indirect Holdings; Intercompany Sales Company A and Subsidiary Companies B and C (Credit balance amounts are in parentheses.) 1 Inventory, December 31, 2017 2 3 Other Assets 4 Building and Equipment 5 6 Accumulated Depreciation 7 8 Investment in Company B 9 10 11 12 13 14 15 16 17 Investment in Company C Common Stock ($10 par)-Company A Retained Earnings, January 1, 2017-Company A Part 1 COMBINED CORPORATE ENTITIES AND CONSOLIDATIONS Worksheet for Consolidated Financial Statements. For Year Ended December 31, 2017 Company A 80,000 47,500 300,000 (100,000) 655,500 (300,000) (500,000) Trial Balance Company B 20,000 146,000 200,000 (60,000) 318,000 Company C 30,000 130,000 150.000 (30,000) < QAA 458 / 1142 > >
Transcribed Image Text:= ធ 458 Worksheet 8-1 Indirect Holdings; Intercompany Sales Company A and Subsidiary Companies B and C (Credit balance amounts are in parentheses.) 1 Inventory, December 31, 2017 2 3 Other Assets 4 Building and Equipment 5 6 Accumulated Depreciation 7 8 Investment in Company B 9 10 11 12 13 14 15 16 17 Investment in Company C Common Stock ($10 par)-Company A Retained Earnings, January 1, 2017-Company A Part 1 COMBINED CORPORATE ENTITIES AND CONSOLIDATIONS Worksheet for Consolidated Financial Statements. For Year Ended December 31, 2017 Company A 80,000 47,500 300,000 (100,000) 655,500 (300,000) (500,000) Trial Balance Company B 20,000 146,000 200,000 (60,000) 318,000 Company C 30,000 130,000 150.000 (30,000) < QAA 458 / 1142 > >
University of the Virgin x Bb Home Page - ACC 443 X ← → C < = ធ A uvi-bookshelf.vitalsource.com/reader/books/9781305464803/pageid/485 Worksheet 8-2 Treasury Stock Method for Parent Shares Owned by Subsidiary Company P and Subsidiary Company S Worksheet for Consolidated Financial Statements For Year Ended December 31, 2017 1 2 12 13 14 15 16 17 3 4 Investment in Company P (10%, at cost) 5 Equipment 6 Accumulated Depreciation 7 Common Stock Company P 8 Retained Earnings, January 1, 2017-Company P 9 Common Stock Company St 10 11 18 (Credit balance amounts are in parentheses.) 19 Investment in Company S (80%) Retained Earnings, January 1, 2017-Company S Sales Cost of Goods Sold Expenses Subsidiary Income Treasury Stock (at cost) Consolidated Net Income To NCI (see distribution schedule) My Courses Home X Type here to search 밥 University of the Virgin x b Subsidiary Company S X G Subsidiary Company SX + Trial Balance Company P 248,000 608,000 (100,000) (500,000) (200,000) (300,000) 180,000 80,000 (16,000) 0 Company S 80,000 180,000 (50,000) (100,000) (90,000) (200,000) 120,000 60,000 0 26°C Mostly clear Q AA 462 0 P X ENG 19:18 US 03/03/2023 > : /1142 >
Transcribed Image Text:University of the Virgin x Bb Home Page - ACC 443 X ← → C < = ធ A uvi-bookshelf.vitalsource.com/reader/books/9781305464803/pageid/485 Worksheet 8-2 Treasury Stock Method for Parent Shares Owned by Subsidiary Company P and Subsidiary Company S Worksheet for Consolidated Financial Statements For Year Ended December 31, 2017 1 2 12 13 14 15 16 17 3 4 Investment in Company P (10%, at cost) 5 Equipment 6 Accumulated Depreciation 7 Common Stock Company P 8 Retained Earnings, January 1, 2017-Company P 9 Common Stock Company St 10 11 18 (Credit balance amounts are in parentheses.) 19 Investment in Company S (80%) Retained Earnings, January 1, 2017-Company S Sales Cost of Goods Sold Expenses Subsidiary Income Treasury Stock (at cost) Consolidated Net Income To NCI (see distribution schedule) My Courses Home X Type here to search 밥 University of the Virgin x b Subsidiary Company S X G Subsidiary Company SX + Trial Balance Company P 248,000 608,000 (100,000) (500,000) (200,000) (300,000) 180,000 80,000 (16,000) 0 Company S 80,000 180,000 (50,000) (100,000) (90,000) (200,000) 120,000 60,000 0 26°C Mostly clear Q AA 462 0 P X ENG 19:18 US 03/03/2023 > : /1142 >
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