ADVANCED FINANCIAL ACCOUNTING-ACCESS
12th Edition
ISBN: 9781260518740
Author: Christensen
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 2, Problem 2.15Q
To determine
Concept introduction: The business combination is a process where two entities merge to take the benefit of synergies for a common goal.
To explain: The reason to record the beginning of retained earnings balance for each company in the three-part consolidation worksheet rather than just the ending balance.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
In a consolidated statements workpaper, which items are carried forward from one section to another?
Select one:
a. The total of the income section to the retained earnings section and then the total of the retained earnings section to the balance sheet section.
b. The eliminations must balance for each section in order to carry them forward.
c. Parents retained earnings, but not Subsidiary
d. Each section on the workpaper is separate, so no numbers are carried forward
Consolidation accountinga. eliminates all liabilities.b. reports the receivables and payables of the parent company only.c. combines the accounts of the parent company and its subsidiary companies.d. all of the above
K Consolidation accounting ***
O A. reports the receivables and payables of the parent company only.
OB. eliminates all liabilities.
C. combines the accounts of the parent company and those of its subsidiary companies.
D. all of the above.
Chapter 2 Solutions
ADVANCED FINANCIAL ACCOUNTING-ACCESS
Ch. 2 - What types of investments in common stock normally...Ch. 2 - Prob. 2.2QCh. 2 - Describe an investor’s treatment of an investment...Ch. 2 - How is the receipt of a dividend recorded under...Ch. 2 - How does carrying securities at fair value...Ch. 2 - Prob. 2.6QCh. 2 - Prob. 2.7QCh. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - How are a subsidiary’s dividend declarations...Ch. 2 - Prob. 2.12QCh. 2 - Give a definition of consolidated retained...Ch. 2 - Prob. 2.14QCh. 2 - Prob. 2.15QCh. 2 - Prob. 2.16AQCh. 2 - When is equity method reporting considered...Ch. 2 - How does the fully adjusted equity method differ...Ch. 2 - What is the modified equity method? When might a...Ch. 2 - Choice of Accounting Method Slanted Building...Ch. 2 - Prob. 2.2CCh. 2 - Prob. 2.3CCh. 2 - Prob. 2.4CCh. 2 - Prob. 2.5CCh. 2 - Prob. 2.6CCh. 2 - Prob. 2.1.1ECh. 2 - Multiple-Choice Questions on Accounting for Equity...Ch. 2 - Prob. 2.1.3ECh. 2 - Prob. 2.1.4ECh. 2 - Multiple-Choice Questions on Intercorporate...Ch. 2 - Prob. 2.2.2ECh. 2 - Prob. 2.3.1ECh. 2 - Prob. 2.3.2ECh. 2 - Prob. 2.3.3ECh. 2 - Prob. 2.4ECh. 2 - Acquisition Price Phillips Company bought 40...Ch. 2 - Prob. 2.6ECh. 2 - Prob. 2.7ECh. 2 - Carrying an investment at Fair Value versus Equity...Ch. 2 - Carrying an Investment at Fair Value versus Equity...Ch. 2 - Prob. 2.10ECh. 2 - Prob. 2.11ECh. 2 - Prob. 2.12ECh. 2 - Prob. 2.13ECh. 2 - Income Reporting Grandview Company purchased 40...Ch. 2 - Investee with Preferred Stock Outstanding Reden...Ch. 2 - Prob. 2.16AECh. 2 - Prob. 2.17AECh. 2 - Changes ¡n the Number of Shares Held Idle...Ch. 2 - Investments Carried at Fair Value and Equity...Ch. 2 - Carried at Fair Value Journal Entries Marlow...Ch. 2 - Consolidated Worksheet at End of the First Year of...Ch. 2 - Consolidated Worksheet at End of the Second Year...Ch. 2 - Prob. 2.23PCh. 2 - Prob. 2.24PCh. 2 - Prob. 2.25APCh. 2 - Equity-Method income Statement Wealthy...Ch. 2 - Prob. 2.27BPCh. 2 - Prob. 2.28BP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- How is the amount assigned to the non-controlling interest normally determined when a consolidated balance sheet is prepared immediately after a business combination?arrow_forwardWhen we are preparing consolidated financial statements, will the financial statements of the parent entity, or the subsidiary companies, as at the beginning of the financial period reflect prior consolidation adjustments? Why?arrow_forwardWhich consolidation method should be used in preparing consolidated financial statements in accordance with IFRS? A. Proportionate consolidation method.B. Either identifiable net assets or fair value enterprise method.C. New entity method.D. Parent company method.arrow_forward
- Why must the eliminating entries be entered in the consolidation worksheet each time consolidated statements are prepared?How is the beginning-of-period non-controlling interest balance determined?How is the end-of-period non-controlling interest balance determined? Provide an example.arrow_forwardIf a company prepares a consolidated income statement, IFRS requires that net income be reported O for the subsidiary companies only. for both the parent company and the subsidiary companies. O as a single amount only. O for the parent company only.arrow_forwardConsolidation financial statements are prepared when a parent-subsidiary relationship exists in recognition of the accounting principle concept of: a. Reliability b. Entity c. Materiality d. Going Concernarrow_forward
- Explain why consolidated entities defer intra-entity gross profit in ending inventory and the consolidation procedures required subsequently to recognize profits.arrow_forwardList the types of intercompany revenue and expenses that are eliminated in the preparation of a consolidated income statement and indicate the effect that each elimination has on the amount of net income attribute to non-controlling interestarrow_forwardFollowing the completion of a business combination in the form of a statutory consolidation, what is the balance in the new corporation’s Retained earnings account? A. The sum of the acquirer and acquiree retained earnings account balances. B. The acquirer retained earnings account balance C. Zero D. The acquiree retained earnings account balancearrow_forward
- Which of the following is not a change in reporting entity? 26 Multiple Choice 01-59-33 Reporting using comparative financial statements for the first time. Presenting consolidated financial statements for the first time. Changing the companies that comprise a consolidated group. All are changes in reporting entity. 身arrow_forwardWhen an entity discontinued an operation and disposed of the discontinued operation the transaction should be reported in the income statement as: A. a prior period erro B. other income and expense item C. a single amount after income from continuing operations and before net income D. a bulk sale of assets included in income from continuing operationsarrow_forwardThe identifiable assets acquired and liabilities assumed in a business combination are generally measured at: a. Acquisition-date fair values b. Previous carrying amounts c. Fair value less cost to sell d. Costarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning