Concept introduction The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company. To prepare: A journal entry by cost method for the investment in S company in the year 2008 .

Question

Want to see more full solutions like this?

Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 2, Problem 2.27BP

a.

To determine

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: A journal entry by cost method for the investment in S company in the year 2008 .

a.

Expert Solution

Answer to Problem 2.27BP

The journal entry so passed gives a debit of investment and credit the cash with the same amount.

Explanation of Solution

Particular	Debit	Credit
Cost method entry on books
Investment in S co.	300,000
Cash		300,000
The initial investment in S co. 2008 income

Cash	20,000
Investment in the S co.		20,000
Record P co. share in S co. dividend
Total	320,000	320,000

B.

To determine

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: the consolidated worksheet for the final values

B.

Expert Solution

Answer to Problem 2.27BP

The consolidated worksheet is prepared and discussed.

Explanation of Solution

Book value calculation
	Total book value	=	Common stock	+	Retained earnings
Initial book value	300,000		200,000		100,000

Income statement	P	S	Dr.	Cr.	consolidated
Sales	800,000	250,000			1,050,000
Less Cogs	(200,000)	(125,000)			(325,000)
Depreciation Exp	(50,000)	(10,000)			(60,000)
Sel. Exp	(225,000)	(40,000)			(265,000)
Income from S	20,000		20,000
Net income	345,000	75,000	20,000		400,000

Statement of Retain Earning	P	S	Dr.	Cr.	Consolidated
Opening balance	225,000	100,000	100,000		225000
Net income	345,000	75,000	20,000		400,000
Less dividend declared	(100,000)	(20,000)		20,000	(100,000)
End balance	470,000	155,000	120,000	20,000	525,000

Income statement	P co	S co	Eliminated DR	Eliminated CR	consolidated
Cash	130,000	80,000			210,000
Accounts received	165,000	65,000			230,000
Inventory	200,000	75,000			275,000
Investment in S co	300,000			300,000	0
Land	200,000	100,000			300,000
Building and equipment	700,000	200,000		10,000	890,000
Less accumulated depreciation	450,000	20,000	10,000		460,000
Total assets	1,245,000	500,000	10,000	310,000	1,445,000
Account payable	75,000	60,000			135,000
Bonds	200,000	85,000			285,000
Common stocks	500,000	200,000	200,000		500,000
Retained earnings	470,000	155,000	120,000	20,000	525,000
Total liabilities	1,245,000	500,000	320,0000	20,000	1,445,000

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Affordable Furniture makes sofas, loveseats, and recliners. The company allocates manufacturing overhead based on direct labor hours. Affordable estimated a total of $1.0 million of manufacturing overhead and 30,000 direct labor hours for the year. Job 310 consists of a batch of 8 recliners.

1. Record the proper journal entry for each transaction. 2. By the end of January, was manufacturing overhead overallocated or underallocated? By how much?

Rocky River Fast Lube does oil changes on vehicles in 15 minutes or less. The variable cost associated with each oil change is $12 (oil, filter, and 15 minutes of employee time). The fixed costs of running the shop are $8,000 each month (store manager salary, depreciation on shop and equipment, insurance, and property taxes). The shop has the capacity to perform 4,000 oil changes each month.

Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 2, Problem 2.27BP

a.

To determine

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: A journal entry by cost method for the investment in S company in the year 2008 .

a.

Expert Solution

Answer to Problem 2.27BP

The journal entry so passed gives a debit of investment and credit the cash with the same amount.

Explanation of Solution

Particular	Debit	Credit
Cost method entry on books
Investment in S co.	300,000
Cash		300,000
The initial investment in S co. 2008 income

Cash	20,000
Investment in the S co.		20,000
Record P co. share in S co. dividend
Total	320,000	320,000

B.

To determine

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: the consolidated worksheet for the final values

B.

Expert Solution

Answer to Problem 2.27BP

The consolidated worksheet is prepared and discussed.

Explanation of Solution

Book value calculation
	Total book value	=	Common stock	+	Retained earnings
Initial book value	300,000		200,000		100,000

Income statement	P	S	Dr.	Cr.	consolidated
Sales	800,000	250,000			1,050,000
Less Cogs	(200,000)	(125,000)			(325,000)
Depreciation Exp	(50,000)	(10,000)			(60,000)
Sel. Exp	(225,000)	(40,000)			(265,000)
Income from S	20,000		20,000
Net income	345,000	75,000	20,000		400,000

Statement of Retain Earning	P	S	Dr.	Cr.	Consolidated
Opening balance	225,000	100,000	100,000		225000
Net income	345,000	75,000	20,000		400,000
Less dividend declared	(100,000)	(20,000)		20,000	(100,000)
End balance	470,000	155,000	120,000	20,000	525,000

Income statement	P co	S co	Eliminated DR	Eliminated CR	consolidated
Cash	130,000	80,000			210,000
Accounts received	165,000	65,000			230,000
Inventory	200,000	75,000			275,000
Investment in S co	300,000			300,000	0
Land	200,000	100,000			300,000
Building and equipment	700,000	200,000		10,000	890,000
Less accumulated depreciation	450,000	20,000	10,000		460,000
Total assets	1,245,000	500,000	10,000	310,000	1,445,000
Account payable	75,000	60,000			135,000
Bonds	200,000	85,000			285,000
Common stocks	500,000	200,000	200,000		500,000
Retained earnings	470,000	155,000	120,000	20,000	525,000
Total liabilities	1,245,000	500,000	320,0000	20,000	1,445,000

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 2, Problem 2.27BP

a.

To determine

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: A journal entry by cost method for the investment in S company in the year 2008 .

a.

Expert Solution

Answer to Problem 2.27BP

The journal entry so passed gives a debit of investment and credit the cash with the same amount.

Explanation of Solution

Particular	Debit	Credit
Cost method entry on books
Investment in S co.	300,000
Cash		300,000
The initial investment in S co. 2008 income

Cash	20,000
Investment in the S co.		20,000
Record P co. share in S co. dividend
Total	320,000	320,000

B.

To determine

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: the consolidated worksheet for the final values

B.

Expert Solution

Answer to Problem 2.27BP

The consolidated worksheet is prepared and discussed.

Explanation of Solution

Book value calculation
	Total book value	=	Common stock	+	Retained earnings
Initial book value	300,000		200,000		100,000

Income statement	P	S	Dr.	Cr.	consolidated
Sales	800,000	250,000			1,050,000
Less Cogs	(200,000)	(125,000)			(325,000)
Depreciation Exp	(50,000)	(10,000)			(60,000)
Sel. Exp	(225,000)	(40,000)			(265,000)
Income from S	20,000		20,000
Net income	345,000	75,000	20,000		400,000

Statement of Retain Earning	P	S	Dr.	Cr.	Consolidated
Opening balance	225,000	100,000	100,000		225000
Net income	345,000	75,000	20,000		400,000
Less dividend declared	(100,000)	(20,000)		20,000	(100,000)
End balance	470,000	155,000	120,000	20,000	525,000

Income statement	P co	S co	Eliminated DR	Eliminated CR	consolidated
Cash	130,000	80,000			210,000
Accounts received	165,000	65,000			230,000
Inventory	200,000	75,000			275,000
Investment in S co	300,000			300,000	0
Land	200,000	100,000			300,000
Building and equipment	700,000	200,000		10,000	890,000
Less accumulated depreciation	450,000	20,000	10,000		460,000
Total assets	1,245,000	500,000	10,000	310,000	1,445,000
Account payable	75,000	60,000			135,000
Bonds	200,000	85,000			285,000
Common stocks	500,000	200,000	200,000		500,000
Retained earnings	470,000	155,000	120,000	20,000	525,000
Total liabilities	1,245,000	500,000	320,0000	20,000	1,445,000

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 2, Problem 2.27BP

a.

To determine

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: A journal entry by cost method for the investment in S company in the year 2008 .

a.

Expert Solution

Answer to Problem 2.27BP

The journal entry so passed gives a debit of investment and credit the cash with the same amount.

Explanation of Solution

Particular	Debit	Credit
Cost method entry on books
Investment in S co.	300,000
Cash		300,000
The initial investment in S co. 2008 income

Cash	20,000
Investment in the S co.		20,000
Record P co. share in S co. dividend
Total	320,000	320,000

B.

To determine

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: the consolidated worksheet for the final values

B.

Expert Solution

Answer to Problem 2.27BP

The consolidated worksheet is prepared and discussed.

Explanation of Solution

Book value calculation
	Total book value	=	Common stock	+	Retained earnings
Initial book value	300,000		200,000		100,000

Income statement	P	S	Dr.	Cr.	consolidated
Sales	800,000	250,000			1,050,000
Less Cogs	(200,000)	(125,000)			(325,000)
Depreciation Exp	(50,000)	(10,000)			(60,000)
Sel. Exp	(225,000)	(40,000)			(265,000)
Income from S	20,000		20,000
Net income	345,000	75,000	20,000		400,000

Statement of Retain Earning	P	S	Dr.	Cr.	Consolidated
Opening balance	225,000	100,000	100,000		225000
Net income	345,000	75,000	20,000		400,000
Less dividend declared	(100,000)	(20,000)		20,000	(100,000)
End balance	470,000	155,000	120,000	20,000	525,000

Income statement	P co	S co	Eliminated DR	Eliminated CR	consolidated
Cash	130,000	80,000			210,000
Accounts received	165,000	65,000			230,000
Inventory	200,000	75,000			275,000
Investment in S co	300,000			300,000	0
Land	200,000	100,000			300,000
Building and equipment	700,000	200,000		10,000	890,000
Less accumulated depreciation	450,000	20,000	10,000		460,000
Total assets	1,245,000	500,000	10,000	310,000	1,445,000
Account payable	75,000	60,000			135,000
Bonds	200,000	85,000			285,000
Common stocks	500,000	200,000	200,000		500,000
Retained earnings	470,000	155,000	120,000	20,000	525,000
Total liabilities	1,245,000	500,000	320,0000	20,000	1,445,000

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 2, Problem 2.27BP

a.

To determine

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: A journal entry by cost method for the investment in S company in the year 2008 .

a.

Expert Solution

Answer to Problem 2.27BP

The journal entry so passed gives a debit of investment and credit the cash with the same amount.

Explanation of Solution

Particular	Debit	Credit
Cost method entry on books
Investment in S co.	300,000
Cash		300,000
The initial investment in S co. 2008 income

Cash	20,000
Investment in the S co.		20,000
Record P co. share in S co. dividend
Total	320,000	320,000

B.

To determine

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: the consolidated worksheet for the final values

B.

Expert Solution

Answer to Problem 2.27BP

The consolidated worksheet is prepared and discussed.

Explanation of Solution

Book value calculation
	Total book value	=	Common stock	+	Retained earnings
Initial book value	300,000		200,000		100,000

Income statement	P	S	Dr.	Cr.	consolidated
Sales	800,000	250,000			1,050,000
Less Cogs	(200,000)	(125,000)			(325,000)
Depreciation Exp	(50,000)	(10,000)			(60,000)
Sel. Exp	(225,000)	(40,000)			(265,000)
Income from S	20,000		20,000
Net income	345,000	75,000	20,000		400,000

Statement of Retain Earning	P	S	Dr.	Cr.	Consolidated
Opening balance	225,000	100,000	100,000		225000
Net income	345,000	75,000	20,000		400,000
Less dividend declared	(100,000)	(20,000)		20,000	(100,000)
End balance	470,000	155,000	120,000	20,000	525,000

Income statement	P co	S co	Eliminated DR	Eliminated CR	consolidated
Cash	130,000	80,000			210,000
Accounts received	165,000	65,000			230,000
Inventory	200,000	75,000			275,000
Investment in S co	300,000			300,000	0
Land	200,000	100,000			300,000
Building and equipment	700,000	200,000		10,000	890,000
Less accumulated depreciation	450,000	20,000	10,000		460,000
Total assets	1,245,000	500,000	10,000	310,000	1,445,000
Account payable	75,000	60,000			135,000
Bonds	200,000	85,000			285,000
Common stocks	500,000	200,000	200,000		500,000
Retained earnings	470,000	155,000	120,000	20,000	525,000
Total liabilities	1,245,000	500,000	320,0000	20,000	1,445,000

Answer 6

Chapter 2, Problem 2.27BP

a.

To determine

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: A journal entry by cost method for the investment in S company in the year 2008 .

a.

Expert Solution

Answer to Problem 2.27BP

The journal entry so passed gives a debit of investment and credit the cash with the same amount.

Explanation of Solution

Particular	Debit	Credit
Cost method entry on books
Investment in S co.	300,000
Cash		300,000
The initial investment in S co. 2008 income

Cash	20,000
Investment in the S co.		20,000
Record P co. share in S co. dividend
Total	320,000	320,000

Answer 7

Chapter 2, Problem 2.27BP

a.

To determine

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: A journal entry by cost method for the investment in S company in the year 2008 .

Answer 8

a.

Expert Solution

Answer to Problem 2.27BP

The journal entry so passed gives a debit of investment and credit the cash with the same amount.

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Particular	Debit	Credit
Cost method entry on books
Investment in S co.	300,000
Cash		300,000
The initial investment in S co. 2008 income

Cash	20,000
Investment in the S co.		20,000
Record P co. share in S co. dividend
Total	320,000	320,000

Answer 13

B.

To determine

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: the consolidated worksheet for the final values

B.

Expert Solution

Answer to Problem 2.27BP

The consolidated worksheet is prepared and discussed.

Explanation of Solution

Book value calculation
	Total book value	=	Common stock	+	Retained earnings
Initial book value	300,000		200,000		100,000

Income statement	P	S	Dr.	Cr.	consolidated
Sales	800,000	250,000			1,050,000
Less Cogs	(200,000)	(125,000)			(325,000)
Depreciation Exp	(50,000)	(10,000)			(60,000)
Sel. Exp	(225,000)	(40,000)			(265,000)
Income from S	20,000		20,000
Net income	345,000	75,000	20,000		400,000

Statement of Retain Earning	P	S	Dr.	Cr.	Consolidated
Opening balance	225,000	100,000	100,000		225000
Net income	345,000	75,000	20,000		400,000
Less dividend declared	(100,000)	(20,000)		20,000	(100,000)
End balance	470,000	155,000	120,000	20,000	525,000

Income statement	P co	S co	Eliminated DR	Eliminated CR	consolidated
Cash	130,000	80,000			210,000
Accounts received	165,000	65,000			230,000
Inventory	200,000	75,000			275,000
Investment in S co	300,000			300,000	0
Land	200,000	100,000			300,000
Building and equipment	700,000	200,000		10,000	890,000
Less accumulated depreciation	450,000	20,000	10,000		460,000
Total assets	1,245,000	500,000	10,000	310,000	1,445,000
Account payable	75,000	60,000			135,000
Bonds	200,000	85,000			285,000
Common stocks	500,000	200,000	200,000		500,000
Retained earnings	470,000	155,000	120,000	20,000	525,000
Total liabilities	1,245,000	500,000	320,0000	20,000	1,445,000

Answer 14

B.

To determine

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: the consolidated worksheet for the final values

Answer 15

B.

Expert Solution

Answer to Problem 2.27BP

The consolidated worksheet is prepared and discussed.

Answer 16

B.

Expert Solution

Answer 17

B.

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Book value calculation
	Total book value	=	Common stock	+	Retained earnings
Initial book value	300,000		200,000		100,000

Income statement	P	S	Dr.	Cr.	consolidated
Sales	800,000	250,000			1,050,000
Less Cogs	(200,000)	(125,000)			(325,000)
Depreciation Exp	(50,000)	(10,000)			(60,000)
Sel. Exp	(225,000)	(40,000)			(265,000)
Income from S	20,000		20,000
Net income	345,000	75,000	20,000		400,000

Statement of Retain Earning	P	S	Dr.	Cr.	Consolidated
Opening balance	225,000	100,000	100,000		225000
Net income	345,000	75,000	20,000		400,000
Less dividend declared	(100,000)	(20,000)		20,000	(100,000)
End balance	470,000	155,000	120,000	20,000	525,000

Income statement	P co	S co	Eliminated DR	Eliminated CR	consolidated
Cash	130,000	80,000			210,000
Accounts received	165,000	65,000			230,000
Inventory	200,000	75,000			275,000
Investment in S co	300,000			300,000	0
Land	200,000	100,000			300,000
Building and equipment	700,000	200,000		10,000	890,000
Less accumulated depreciation	450,000	20,000	10,000		460,000
Total assets	1,245,000	500,000	10,000	310,000	1,445,000
Account payable	75,000	60,000			135,000
Bonds	200,000	85,000			285,000
Common stocks	500,000	200,000	200,000		500,000
Retained earnings	470,000	155,000	120,000	20,000	525,000
Total liabilities	1,245,000	500,000	320,0000	20,000	1,445,000

Answer 20

Ch. 2 - What types of investments in common stock normally...Ch. 2 - Prob. 2.2Q Ch. 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. 2.6Q Ch. 2 - Prob. 2.7Q Ch. 2 - Prob. 2.8Q Ch. 2 - Prob. 2.9Q Ch. 2 - Prob. 2.10Q

Concept explainers

Answer to Problem 2.27BP

Explanation of Solution

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: the consolidated worksheet for the final values

Answer to Problem 2.27BP

Explanation of Solution

Want to see more full solutions like this?

Chapter 2 Solutions

Concept explainers

Answer to Problem 2.27BP

Explanation of Solution

Concept introduction The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company. To prepare: the consolidated worksheet for the final values

Answer to Problem 2.27BP

Explanation of Solution

Want to see more full solutions like this?

Chapter 2 Solutions

Concept introduction

The consolidated balance sheet and the worksheets are the computed tools that are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

To prepare: the consolidated worksheet for the final values