Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Chapter 10, Problem 10.10E
To determine
Introduction: Consolidation is the process of combining financial results of various subsidiaries with the financial results of parent company. It is used only when parent company holds more than 50% of share of subsidiary company.This tax arises due to timing difference special when taxes are paid in advance. When there is overpayment of advance
The amount of deferred tax asset and deferred tax liability needed to prepare consolidated
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On July 1, Zamora Inc. agreed to sell the assets of its Golfright Division to Benito Inc. for $71 million.
The following additional facts pertain to the transaction:
• The Golfrignt Division qualifies as a component of the entity according to GAAP regarding discontinued operations.
• The book value of the Golfright's assets totaled $45 million on the date of the sale.
Golfright's operating income was a pre-tax loss of $160 million in 2020.
• Zamora's income tax rate is 40%.
Suppose that the Golfright Division's assets had not been sold by December 31, 2020, but were considered held for sale. Assume that the fair value
of these assets at December 31 was $71 million.
Calculate the amount of loss from discontinued operations Zamora Inc. will report in the income statement for 2020. (Please input answer without the
millions, i.e. 100 million would be entered as 100)
High, a parent company, acquired Low, an unincorporated entity, for $2,800,000. A fair value exercise performed on Low's net assets at the date of purchase showed:
$'000
Property, plant and equipment
3,000
Identifiable intangible asset
500
Inventory
300
Trade receivables less payables
200
4,000
How should the purchase of Low be reflected in High's consolidated statement of financial position?
Record the net assets at their values shown above and credit profit or loss with $1,200,000
Record the net assets at their values shown above and credit High's consolidated goodwill with $1,200,000
Write off the intangible asset ($500,000), record the remaining net assets at their values shown above and credit profit or loss with $700,000,000
Record the purchase as a financial asset investment at $2,800,000
Plaintain Company owns 100% of Syncopati Inc. The excess of acquisition cost over book value
was attributed entirely to previously unrecorded identifiable intangibles. For 2021, Syncopati
reported net income of $6,000,000 and declared and paid dividends of $1,500,000. Amortization
of the previously unrecorded identifiable intangibles for 2021 is $1,200,000. The following
information is available regarding intercompany transactions:
1. During 2021, Syncopati sold services to Plaintain for $1,000,000. Plaintain still owes Syncopati
$100,000 for those services at year-end.
2. Plaintain's ending inventory at December 31, 2021, included merchandise acquired from Syncopati;
the unconfirmed profit on this inventory was $300,000.
3. Plaintain's ending inventory at December 31, 2020, included merchandise acquired from Syncopati;
the unconfirmed profit on this inventory was $400,000.
4. Syncopati's ending inventory at December 31, 2021, included merchandise acquired from Plaintain;
the…
Chapter 10 Solutions
Advanced Financial Accounting
Ch. 10 - Prob. 10.1QCh. 10 - Why are dividend payments to noncontrolling...Ch. 10 - Prob. 10.3QCh. 10 - Why are changes in inventory balances not shown in...Ch. 10 - Prob. 10.5QCh. 10 - How is an increase in inventory included in the...Ch. 10 - What portion of the sales of an acquired company...Ch. 10 - Prob. 10.8QCh. 10 - Prob. 10.9QCh. 10 - Prob. 10.10Q
Ch. 10 - Prob. 10.11QCh. 10 - Prob. 10.12QCh. 10 - Prob. 10.13QCh. 10 - Prob. 10.14QCh. 10 - How do interperiod income tax allocation...Ch. 10 - How does the use of interperiod tax allocation...Ch. 10 - Prob. 10.17QCh. 10 - Prob. 10.18QCh. 10 - Prob. 10.19QCh. 10 - When a subsidiary’s convertible bond is treated as...Ch. 10 - Prob. 10.21QCh. 10 - What effect does the presence of a noncontrolling...Ch. 10 - Prob. 10.3CCh. 10 - Consolidated Cash Flows Analysis The consolidated...Ch. 10 - Prob. 10.1ECh. 10 - Prob. 10.2ECh. 10 - Prob. 10.3ECh. 10 - Prob. 10.4ECh. 10 - Prob. 10.5ECh. 10 - Direct Method Cash Flow Statement Using the data...Ch. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - Prob. 10.9ECh. 10 - Prob. 10.10ECh. 10 - Prob. 10.11ECh. 10 - Prob. 10.12ECh. 10 - Prob. 10.13ECh. 10 - Prob. 10.14ECh. 10 - Effect of Convertible Bonds on Earnings per Share...Ch. 10 - Effect of Convertible Preferred Stock on Earnings...Ch. 10 - Prob. 10.17PCh. 10 - Prob. 10.18PCh. 10 - Preparing a Statement of Cash Flows—Direct Method...Ch. 10 - Prob. 10.20PCh. 10 - Prob. 10.21PCh. 10 - Prob. 10.22PCh. 10 - Prob. 10.23PCh. 10 - Prob. 10.24PCh. 10 - Prob. 10.25PCh. 10 - Prob. 10.26PCh. 10 - Prob. 10.27PCh. 10 - Prob. 10.28PCh. 10 - Prob. 10.29PCh. 10 - Prob. 10.30PCh. 10 - Prob. 10.31PCh. 10 - Prob. 10.32PCh. 10 - Prob. 10.33P
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