The balance sheets of Kim Ltd. and Steinbach Co. on December 31, Year 2, just before the transaction described below, were asfollows:Cash and receivablesInventoryProperty and equipment (net)Current liabilitiesLong-term debtCommon sharesRetained earningsNoOn December 31, Year 2, Kim purchased 60% of Steinbach's outstanding common shares for $144,000 in cash. Coincidentally,the carrying amounts of Steinbach's assets and liabilities were equal to fair value.ARequired:(a) Prepare the journal entries, if any, for Kim Ltd. and for Steinbach Co. to record this transaction. (If no entry is required for atransaction/event, select "No journal entry required" in the first account field.)BS.No12AssetsCash and receivablesCashKim$365,000Liabilities and EquityCurrent liabilitiesLong-term debtRetained earnings160,000193,000$ 718,000$ 138,000317,000100,000163,000$ 718,000CashInventoryProperty and equipment (net)Investment in SteinbachCommon sharesInvestment in SteinbachAnswer is complete but not entirely correct.General JournalCommon sharesBalance SheetDecember 31, Year 2Answer is not complete.Steinbach$ 89,000136,000278,000$ 503,000$ 124,000139,000150,00090,000$ 503,000›› › › *(b) Prepare balance sheets for Kim Ltd. and for Steinbach Co. at December 31, Year 2, after recording the transaction notedabove.✓Kim✔$ $ 509,000 $ 233,000136,000278,000$ 138,000$♥ 317,000✔$160,000193,000✔144,000150,000 X90,000 X$ 1,156,000 $ 737,000Steinbach33163,000✔$ 124,000139,000✔90,000Xx618,000 $ 353,000XxDebit144,000144,000 XCredit144,000144,000 (c) Prepare a consolidated balance sheet for Kim Ltd. after the transaction noted above.Answer is not complete.Kim Ltd.Consolidated Balance SheetDecember 31, Year 2AssetsCash and receivablesInventoryProperty and equipment (net)Common sharesLiabilities and EquityCurrent liabilitiesLong-term debtRetained earnings$ 742,000296,000471,000240,000 X$ 1,749,000$ 262,000456,000253,000 X$ 971,000

A consolidated balance sheet is a document that shows the entire financial situation of a parent…

The balance sheets of Kim Ltd. and Steinbach Co. on December 31, Year 2, just before the transaction described below, were as follows: Cash and receivables. Inventory Property and equipment (net) Current liabilities Long-term debt Common shares Retained earnings No On December 31, Year 2, Kim purchased 60% of Steinbach's outstanding common shares for $144,000 in cash. Coincidentally, the carrying amounts of Steinbach's assets and liabilities were equal to fair value. A Required: (a) Prepare the journal entries, if any, for Kim Ltd. and for Steinbach Co. to record this transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) B S.No 1 2 Kim $365,000 160,000 193,000 $ 718,000 $ 138,000 317,000 100,000 163,000 $ 718,000 Cash Cash Steinbach $ 89,000 136,000 278,000 $ 503,000 Investment in Steinbach $ 124,000 139,000 150,000 90,000 $ 503,000 Answer is complete but not entirely correct. General Journal Common shares X x x x Debit 144,000 144,000 X Credit 144,000 144,000 X

The balance sheets of Kim Ltd. and Steinbach Co. on December 31, Year 2, just before the transaction described below, were as follows: Cash and receivables. Inventory Property and equipment (net) Current liabilities Long-term debt Common shares Retained earnings No On December 31, Year 2, Kim purchased 60% of Steinbach's outstanding common shares for $144,000 in cash. Coincidentally, the carrying amounts of Steinbach's assets and liabilities were equal to fair value. A Required: (a) Prepare the journal entries, if any, for Kim Ltd. and for Steinbach Co. to record this transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) B S.No 1 2 Kim $365,000 160,000 193,000 $ 718,000 $ 138,000 317,000 100,000 163,000 $ 718,000 Cash Cash Steinbach $ 89,000 136,000 278,000 $ 503,000 Investment in Steinbach $ 124,000 139,000 150,000 90,000 $ 503,000 Answer is complete but not entirely correct. General Journal Common shares X x x x Debit 144,000 144,000 X Credit 144,000 144,000 X

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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