ADVANCED FIN. ACCT.(LL)-W/CONNECT
12th Edition
ISBN: 9781264582129
Author: Christensen
Publisher: MCG CUSTOM
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Question
Chapter 2, Problem 2.27BP
a.
To determine
Concept introduction
The consolidated
To prepare: A
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. | ||
| Cash | ||
| The initial investment in S co. income | ||
| Cash | ||
| Investment in the S co. | ||
| Record P co. share in S co. dividend | ||
| Total |
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 |
| Income statement | P | S | Dr. | Cr. | consolidated |
| Sales | |||||
| Less Cogs | |||||
| Depreciation Exp | |||||
| Sel. Exp | |||||
| Income from S | |||||
| Net income |
| Statement of Retain Earning | P | S | Dr. | Cr. | Consolidated |
| Opening balance | |||||
| Net income | |||||
| Less dividend declared | |||||
| End balance |
| Income statement | P co | S co | Eliminated DR | Eliminated CR | consolidated |
| Cash | |||||
| Accounts received | |||||
| Inventory | |||||
| Investment in S co | |||||
| Land | |||||
| Building and equipment | |||||
| Less accumulated depreciation | |||||
| Total assets | |||||
| Account payable | |||||
| Bonds | |||||
| Common stocks | |||||
| Retained earnings | |||||
| Total liabilities |
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Chapter 2 Solutions
ADVANCED FIN. ACCT.(LL)-W/CONNECT
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
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