The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve earnings and clients who may request to manipulate financial statements. To Identify: The accounting issues that surround the record of income in future if Jacobson buys 15% of Biltrite’s outstanding shares.

Question

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Answer 1

Question

Chapter 2, Problem 1UTI

(a)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve earnings and clients who may request to manipulate financial statements.

To Identify: The accounting issues that surround the record of income in future if Jacobson buys 15% of Biltrite’s outstanding shares.

(a)

Expert Solution

Answer to Problem 1UTI

Jacobson can take this opportunity.

Explanation of Solution

Jacobson has a passive type of ownership. In forthcoming periods, Jacobson will record dividend income for only 15% of Biltrite’s declared dividends only. It will also require Jacobson to adjust the investment as per the market value at the end of each period.

(b)

To determine

Concept Introduction: The ethical dilemmas that accountants may face sometimes include difference of opinion, confidentiality in payroll, illegal activities and pressure from the management to improve earnings and clients who may request to manipulate the financial statements.

To Identify: The accounting issues that surround the record of income in future period if Jacobson buys 40% of Biltrite’s outstanding shares.

(b)

Expert Solution

Answer to Problem 1UTI

Jacobson can take this opportunity.

Explanation of Solution

Jacobson will have the influential part of ownership. In the future period, 40% of Biltrite’s net income will be taken as the investment income. On the other hand, the dividends declared by Biltrite Company will impact the investment account but not the investment income account.

(c)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve the earnings and the clients who may sometimes request to manipulate the financial statements.

To Identify: The accounting issues that surround the record of income in future period if Jacobson buys 100% of Biltrite’s outstanding shares.

(c)

Expert Solution

Answer to Problem 1UTI

The dividends declared by the Biltrite will not impact the income of Jacobson.

Explanation of Solution

Jacobson will have the ownership. In the future period, 100% of the Biltrite’s net income will be taken as the investment income. Biltrite Company’s nominal balances of accounts may be added to the nominal account of Jacobson.

(d)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve the earnings and the clients who may sometimes request to manipulate the financial statements.

To Identify: The accounting issues that surrounds the record of income in future period if Jacobson buys 80% of Biltrite’s outstanding shares.

(d)

Expert Solution

Answer to Problem 1UTI

The dividends declared by the Biltrite will not impact the income of Jacobson.

Explanation of Solution

Jacobson will have the ownership. In future, 100% of Biltrite’s net income will be taken as investment income. The Biltrite’s nominal balance of accounts may be added to the nominal account of Jacobson. There will be consolidated net income followed by the distribution of non-controlling interest equal to 20% of Biltrite’s income. This is because Biltrite’s nominal balance accounts were added to the Jacobson nominal account.

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Answer 2

Question

Chapter 2, Problem 1UTI

(a)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve earnings and clients who may request to manipulate financial statements.

To Identify: The accounting issues that surround the record of income in future if Jacobson buys 15% of Biltrite’s outstanding shares.

(a)

Expert Solution

Answer to Problem 1UTI

Jacobson can take this opportunity.

Explanation of Solution

Jacobson has a passive type of ownership. In forthcoming periods, Jacobson will record dividend income for only 15% of Biltrite’s declared dividends only. It will also require Jacobson to adjust the investment as per the market value at the end of each period.

(b)

To determine

Concept Introduction: The ethical dilemmas that accountants may face sometimes include difference of opinion, confidentiality in payroll, illegal activities and pressure from the management to improve earnings and clients who may request to manipulate the financial statements.

To Identify: The accounting issues that surround the record of income in future period if Jacobson buys 40% of Biltrite’s outstanding shares.

(b)

Expert Solution

Answer to Problem 1UTI

Jacobson can take this opportunity.

Explanation of Solution

Jacobson will have the influential part of ownership. In the future period, 40% of Biltrite’s net income will be taken as the investment income. On the other hand, the dividends declared by Biltrite Company will impact the investment account but not the investment income account.

(c)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve the earnings and the clients who may sometimes request to manipulate the financial statements.

To Identify: The accounting issues that surround the record of income in future period if Jacobson buys 100% of Biltrite’s outstanding shares.

(c)

Expert Solution

Answer to Problem 1UTI

The dividends declared by the Biltrite will not impact the income of Jacobson.

Explanation of Solution

Jacobson will have the ownership. In the future period, 100% of the Biltrite’s net income will be taken as the investment income. Biltrite Company’s nominal balances of accounts may be added to the nominal account of Jacobson.

(d)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve the earnings and the clients who may sometimes request to manipulate the financial statements.

To Identify: The accounting issues that surrounds the record of income in future period if Jacobson buys 80% of Biltrite’s outstanding shares.

(d)

Expert Solution

Answer to Problem 1UTI

The dividends declared by the Biltrite will not impact the income of Jacobson.

Explanation of Solution

Jacobson will have the ownership. In future, 100% of Biltrite’s net income will be taken as investment income. The Biltrite’s nominal balance of accounts may be added to the nominal account of Jacobson. There will be consolidated net income followed by the distribution of non-controlling interest equal to 20% of Biltrite’s income. This is because Biltrite’s nominal balance accounts were added to the Jacobson nominal account.

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Answer 3

Question

Chapter 2, Problem 1UTI

(a)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve earnings and clients who may request to manipulate financial statements.

To Identify: The accounting issues that surround the record of income in future if Jacobson buys 15% of Biltrite’s outstanding shares.

(a)

Expert Solution

Answer to Problem 1UTI

Jacobson can take this opportunity.

Explanation of Solution

Jacobson has a passive type of ownership. In forthcoming periods, Jacobson will record dividend income for only 15% of Biltrite’s declared dividends only. It will also require Jacobson to adjust the investment as per the market value at the end of each period.

(b)

To determine

Concept Introduction: The ethical dilemmas that accountants may face sometimes include difference of opinion, confidentiality in payroll, illegal activities and pressure from the management to improve earnings and clients who may request to manipulate the financial statements.

To Identify: The accounting issues that surround the record of income in future period if Jacobson buys 40% of Biltrite’s outstanding shares.

(b)

Expert Solution

Answer to Problem 1UTI

Jacobson can take this opportunity.

Explanation of Solution

Jacobson will have the influential part of ownership. In the future period, 40% of Biltrite’s net income will be taken as the investment income. On the other hand, the dividends declared by Biltrite Company will impact the investment account but not the investment income account.

(c)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve the earnings and the clients who may sometimes request to manipulate the financial statements.

To Identify: The accounting issues that surround the record of income in future period if Jacobson buys 100% of Biltrite’s outstanding shares.

(c)

Expert Solution

Answer to Problem 1UTI

The dividends declared by the Biltrite will not impact the income of Jacobson.

Explanation of Solution

Jacobson will have the ownership. In the future period, 100% of the Biltrite’s net income will be taken as the investment income. Biltrite Company’s nominal balances of accounts may be added to the nominal account of Jacobson.

(d)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve the earnings and the clients who may sometimes request to manipulate the financial statements.

To Identify: The accounting issues that surrounds the record of income in future period if Jacobson buys 80% of Biltrite’s outstanding shares.

(d)

Expert Solution

Answer to Problem 1UTI

The dividends declared by the Biltrite will not impact the income of Jacobson.

Explanation of Solution

Jacobson will have the ownership. In future, 100% of Biltrite’s net income will be taken as investment income. The Biltrite’s nominal balance of accounts may be added to the nominal account of Jacobson. There will be consolidated net income followed by the distribution of non-controlling interest equal to 20% of Biltrite’s income. This is because Biltrite’s nominal balance accounts were added to the Jacobson nominal account.

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Answer 4

Question

Chapter 2, Problem 1UTI

(a)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve earnings and clients who may request to manipulate financial statements.

To Identify: The accounting issues that surround the record of income in future if Jacobson buys 15% of Biltrite’s outstanding shares.

(a)

Expert Solution

Answer to Problem 1UTI

Jacobson can take this opportunity.

Explanation of Solution

Jacobson has a passive type of ownership. In forthcoming periods, Jacobson will record dividend income for only 15% of Biltrite’s declared dividends only. It will also require Jacobson to adjust the investment as per the market value at the end of each period.

(b)

To determine

Concept Introduction: The ethical dilemmas that accountants may face sometimes include difference of opinion, confidentiality in payroll, illegal activities and pressure from the management to improve earnings and clients who may request to manipulate the financial statements.

To Identify: The accounting issues that surround the record of income in future period if Jacobson buys 40% of Biltrite’s outstanding shares.

(b)

Expert Solution

Answer to Problem 1UTI

Jacobson can take this opportunity.

Explanation of Solution

Jacobson will have the influential part of ownership. In the future period, 40% of Biltrite’s net income will be taken as the investment income. On the other hand, the dividends declared by Biltrite Company will impact the investment account but not the investment income account.

(c)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve the earnings and the clients who may sometimes request to manipulate the financial statements.

To Identify: The accounting issues that surround the record of income in future period if Jacobson buys 100% of Biltrite’s outstanding shares.

(c)

Expert Solution

Answer to Problem 1UTI

The dividends declared by the Biltrite will not impact the income of Jacobson.

Explanation of Solution

Jacobson will have the ownership. In the future period, 100% of the Biltrite’s net income will be taken as the investment income. Biltrite Company’s nominal balances of accounts may be added to the nominal account of Jacobson.

(d)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve the earnings and the clients who may sometimes request to manipulate the financial statements.

To Identify: The accounting issues that surrounds the record of income in future period if Jacobson buys 80% of Biltrite’s outstanding shares.

(d)

Expert Solution

Answer to Problem 1UTI

The dividends declared by the Biltrite will not impact the income of Jacobson.

Explanation of Solution

Jacobson will have the ownership. In future, 100% of Biltrite’s net income will be taken as investment income. The Biltrite’s nominal balance of accounts may be added to the nominal account of Jacobson. There will be consolidated net income followed by the distribution of non-controlling interest equal to 20% of Biltrite’s income. This is because Biltrite’s nominal balance accounts were added to the Jacobson nominal account.

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Answer 5

Chapter 2, Problem 1UTI

(a)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve earnings and clients who may request to manipulate financial statements.

To Identify: The accounting issues that surround the record of income in future if Jacobson buys 15% of Biltrite’s outstanding shares.

(a)

Expert Solution

Answer to Problem 1UTI

Jacobson can take this opportunity.

Explanation of Solution

Jacobson has a passive type of ownership. In forthcoming periods, Jacobson will record dividend income for only 15% of Biltrite’s declared dividends only. It will also require Jacobson to adjust the investment as per the market value at the end of each period.

(b)

To determine

Concept Introduction: The ethical dilemmas that accountants may face sometimes include difference of opinion, confidentiality in payroll, illegal activities and pressure from the management to improve earnings and clients who may request to manipulate the financial statements.

To Identify: The accounting issues that surround the record of income in future period if Jacobson buys 40% of Biltrite’s outstanding shares.

(b)

Expert Solution

Answer to Problem 1UTI

Jacobson can take this opportunity.

Explanation of Solution

Jacobson will have the influential part of ownership. In the future period, 40% of Biltrite’s net income will be taken as the investment income. On the other hand, the dividends declared by Biltrite Company will impact the investment account but not the investment income account.

(c)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve the earnings and the clients who may sometimes request to manipulate the financial statements.

To Identify: The accounting issues that surround the record of income in future period if Jacobson buys 100% of Biltrite’s outstanding shares.

(c)

Expert Solution

Answer to Problem 1UTI

The dividends declared by the Biltrite will not impact the income of Jacobson.

Explanation of Solution

Jacobson will have the ownership. In the future period, 100% of the Biltrite’s net income will be taken as the investment income. Biltrite Company’s nominal balances of accounts may be added to the nominal account of Jacobson.

(d)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve the earnings and the clients who may sometimes request to manipulate the financial statements.

To Identify: The accounting issues that surrounds the record of income in future period if Jacobson buys 80% of Biltrite’s outstanding shares.

(d)

Expert Solution

Answer to Problem 1UTI

The dividends declared by the Biltrite will not impact the income of Jacobson.

Explanation of Solution

Jacobson will have the ownership. In future, 100% of Biltrite’s net income will be taken as investment income. The Biltrite’s nominal balance of accounts may be added to the nominal account of Jacobson. There will be consolidated net income followed by the distribution of non-controlling interest equal to 20% of Biltrite’s income. This is because Biltrite’s nominal balance accounts were added to the Jacobson nominal account.

Answer 6

Chapter 2, Problem 1UTI

(a)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve earnings and clients who may request to manipulate financial statements.

To Identify: The accounting issues that surround the record of income in future if Jacobson buys 15% of Biltrite’s outstanding shares.

(a)

Expert Solution

Answer to Problem 1UTI

Jacobson can take this opportunity.

Explanation of Solution

Jacobson has a passive type of ownership. In forthcoming periods, Jacobson will record dividend income for only 15% of Biltrite’s declared dividends only. It will also require Jacobson to adjust the investment as per the market value at the end of each period.

Answer 7

Chapter 2, Problem 1UTI

(a)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve earnings and clients who may request to manipulate financial statements.

To Identify: The accounting issues that surround the record of income in future if Jacobson buys 15% of Biltrite’s outstanding shares.

Answer 8

(a)

Expert Solution

Answer to Problem 1UTI

Jacobson can take this opportunity.

Answer 9

(a)

Expert Solution

Answer 10

(a)

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Jacobson has a passive type of ownership. In forthcoming periods, Jacobson will record dividend income for only 15% of Biltrite’s declared dividends only. It will also require Jacobson to adjust the investment as per the market value at the end of each period.

Answer 13

(b)

To determine

Concept Introduction: The ethical dilemmas that accountants may face sometimes include difference of opinion, confidentiality in payroll, illegal activities and pressure from the management to improve earnings and clients who may request to manipulate the financial statements.

To Identify: The accounting issues that surround the record of income in future period if Jacobson buys 40% of Biltrite’s outstanding shares.

(b)

Expert Solution

Answer to Problem 1UTI

Jacobson can take this opportunity.

Explanation of Solution

Jacobson will have the influential part of ownership. In the future period, 40% of Biltrite’s net income will be taken as the investment income. On the other hand, the dividends declared by Biltrite Company will impact the investment account but not the investment income account.

Answer 14

(b)

To determine

Concept Introduction: The ethical dilemmas that accountants may face sometimes include difference of opinion, confidentiality in payroll, illegal activities and pressure from the management to improve earnings and clients who may request to manipulate the financial statements.

To Identify: The accounting issues that surround the record of income in future period if Jacobson buys 40% of Biltrite’s outstanding shares.

Answer 15

(b)

Expert Solution

Answer to Problem 1UTI

Jacobson can take this opportunity.

Answer 16

(b)

Expert Solution

Answer 17

(b)

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Jacobson will have the influential part of ownership. In the future period, 40% of Biltrite’s net income will be taken as the investment income. On the other hand, the dividends declared by Biltrite Company will impact the investment account but not the investment income account.

Answer 20

(c)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve the earnings and the clients who may sometimes request to manipulate the financial statements.

To Identify: The accounting issues that surround the record of income in future period if Jacobson buys 100% of Biltrite’s outstanding shares.

(c)

Expert Solution

Answer to Problem 1UTI

The dividends declared by the Biltrite will not impact the income of Jacobson.

Explanation of Solution

Jacobson will have the ownership. In the future period, 100% of the Biltrite’s net income will be taken as the investment income. Biltrite Company’s nominal balances of accounts may be added to the nominal account of Jacobson.

Answer 21

(c)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve the earnings and the clients who may sometimes request to manipulate the financial statements.

To Identify: The accounting issues that surround the record of income in future period if Jacobson buys 100% of Biltrite’s outstanding shares.

Answer 22

(c)

Expert Solution

Answer to Problem 1UTI

The dividends declared by the Biltrite will not impact the income of Jacobson.

Answer 23

(c)

Expert Solution

Answer 24

(c)

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

Jacobson will have the ownership. In the future period, 100% of the Biltrite’s net income will be taken as the investment income. Biltrite Company’s nominal balances of accounts may be added to the nominal account of Jacobson.

Answer 27

(d)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve the earnings and the clients who may sometimes request to manipulate the financial statements.

To Identify: The accounting issues that surrounds the record of income in future period if Jacobson buys 80% of Biltrite’s outstanding shares.

(d)

Expert Solution

Answer to Problem 1UTI

The dividends declared by the Biltrite will not impact the income of Jacobson.

Explanation of Solution

Jacobson will have the ownership. In future, 100% of Biltrite’s net income will be taken as investment income. The Biltrite’s nominal balance of accounts may be added to the nominal account of Jacobson. There will be consolidated net income followed by the distribution of non-controlling interest equal to 20% of Biltrite’s income. This is because Biltrite’s nominal balance accounts were added to the Jacobson nominal account.

Answer 28

(d)

To determine

Concept Introduction: The ethical dilemmas that the accountants may face sometimes include difference of opinions, confidentiality in payroll, illegal activities and pressure from the management to improve the earnings and the clients who may sometimes request to manipulate the financial statements.

To Identify: The accounting issues that surrounds the record of income in future period if Jacobson buys 80% of Biltrite’s outstanding shares.

Answer 29

(d)

Expert Solution

Answer to Problem 1UTI

The dividends declared by the Biltrite will not impact the income of Jacobson.

Answer 30

(d)

Expert Solution

Answer 31

(d)

Expert Solution

Answer 32

Expert Solution

Answer 33

Explanation of Solution

Jacobson will have the ownership. In future, 100% of Biltrite’s net income will be taken as investment income. The Biltrite’s nominal balance of accounts may be added to the nominal account of Jacobson. There will be consolidated net income followed by the distribution of non-controlling interest equal to 20% of Biltrite’s income. This is because Biltrite’s nominal balance accounts were added to the Jacobson nominal account.

Answer 34

Ch. 2 - Prob. 1UTI Ch. 2 - Prob. 2UTI Ch. 2 - Prob. 3UTI Ch. 2 - Prob. 4UTI Ch. 2 - Prob. 5UTI Ch. 2 - Prob. 6UTI Ch. 2 - Santos Corporation is considering investing in...Ch. 2 - Prob. 2.1E Ch. 2 - Prob. 2.2E Ch. 2 - Prob. 3.1E

Concept explainers

Answer to Problem 1UTI

Explanation of Solution

Answer to Problem 1UTI

Explanation of Solution

Answer to Problem 1UTI

Explanation of Solution

Answer to Problem 1UTI

Explanation of Solution

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Chapter 2 Solutions