Concept explainers
Consolidation following acquisition: when a company purchases another company’s common stock, the subsidiary is viewed as being part of the consolidated entity only from the time stock acquired. When a subsidiary is acquired during a fiscal period rather than at the beginning or at the end, the results of the subsidiary’s operations are included in the consolidated statements only for the portion of the year that the parent owned the stock. The subsidiary’s revenues, expenses, gains and losses for the portion of the fiscal period prior to acquisition is excluded from the consolidated financial statements.
the
b.
Consolidation following acquisition: when a company purchases another company’s common stock, the subsidiary is viewed as being part of the consolidated entity only from the time stock acquired. When a subsidiary is acquired during a fiscal period rather than at the beginning or at the end, the results of the subsidiary’s operations are included in the consolidated statements only for the portion of the year that the parent owned the stock. The subsidiary’s revenues, expenses, gains and losses for the portion of the fiscal period prior to acquisition is excluded from the consolidated financial statements.
The consolidation entries for December 31, 20X2.
Want to see the full answer?
Check out a sample textbook solution
Chapter 10 Solutions
ADV.FIN.ACCT. CONNECT+PROCTORIO PLUS
- Moti Bakery produces various baked goods. Utility costs are allocated to the products based on the baking time required for each product. Total utility costs of $270,000 are budgeted in a period when 540,000 total minutes of baking time are anticipated. If a batch of bagels bakes for 25 minutes, what amount of utility cost will be allocated to the bagels?arrow_forwardSolve this assarrow_forward4 POINTSarrow_forward
- FlagStaff Ltd has a defined benefit pension plan for its employees. The company is considering introducing a defined benefit contribution plan, which will be available to all incoming staff. Although the defined benefit plan is now closed to new staff, the fund is active for all employees who have tenure with the company. In 2020, the following actuarial report was received for the defined benefit plan: 2020/$ Present value of the defined benefit obligation 31 December 2019 18 000 000 Past Service Cost 4 000 000 Net interest ? Current service cost 600 000 Benefits paid 2 000 000 Actuarial gain/loss on DBO ? Present value of the defined benefit obligation 31 December 2020 21 000 000 Fair value of plan assets at 31 December 2019 17 000 000 Return on plan assets ? Contributions paid to the plan during the year 1 500 000 Benefits paid by the plan during the year 2 000 000 Fair value of plan assets at 31 December 2020 27 500 000 Additional information All…arrow_forwardThe estimated amount of ending inventory would bearrow_forwardNo Wrong Answerarrow_forward
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning