ADVANCED FINANCIAL ACCOUNTING IA
ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
Question
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Chapter 10, Problem 10.1Q
To determine

Consolidated statement of cash flow:All the consolidated entities, must present statement of cash flow when they issue a complete set of financial statements. A consolidated statement of cash flow is similar to statement of cash flow presented by an individual entity and is prepared in similar manner.

It is prepared after the preparation of income statement, retained earnings statement and balance sheet. The consolidated cash flow statement is prepared from the information in the consolidated financial statements.

Why a simple fourth part consolidation worksheet is not prepared for consolidation cash flow statement.

Expert Solution & Answer
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Answer to Problem 10.1Q

Fourth part consolidation worksheet cannot be used because beginning and ending consolidated balance sheet totals are needed to determine cash flow for the period.

Explanation of Solution

The balance sheet, income statement and statement of changes in retained earnings are an integrated set and generally needed to be completed as a unit. Once completed these statements can then be sued to prepare the consolidated cash flow statement. Because both the beginning and ending consolidated balance sheet totals are needed to determine the cash flow for a period, the cash flow statement cannot be easily incorporated into the existing three part consolidated worksheet.

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Students have asked these similar questions
General Accounting question
Wilson Corporation acquires Greatbatch Company for $80 million cash in a merger. The balance sheets of both companies at the date of acquisition are as follows: Balance Sheet (in millions) Wilson Greatbatch Current assets $96 $8 Property and equipment 800 144 Intangibles 32 4.8 Total assets $928 $156.8 Current liabilities $40 $3.2 Long-term debt 640 104 Capital stock 80 19.2 Retained earnings 192 24 Accumulated other comprehensive income (loss) (24) 6.4 Total liabilities and equity $928 $156.8 Greatbatch's property and equipment is overvalued by $48 million, its reported intangibles are undervalued by $32 million, and it has unreported intangibles, in the form of customer databases and marketing agreements, valued at $11.2 million. Required Prepare Wilson's balance sheet immediately following the merger. Use a negative sign with your answer for AOCI if the balance is a loss.
Not use ai solution given correct answer

Chapter 10 Solutions

ADVANCED FINANCIAL ACCOUNTING IA

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