Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation. Amount to be reported by P in its income statement as income from its investments in S if P used equity-method of accounting.

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Answer 1

Question

Chapter 3, Problem 3.15E

a.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be reported by P in its income statement as income from its investments in S if P used equity-method of accounting.

b.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be assigned to non-controlling interest in the consolidated income statement for 20X4.

c.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be reported by P as net consolidated income for 20X4.

d.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: The reason for Pto not report the consolidated net income of $79,000 ($59,000+$20,000) .

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Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's assets, Liabilities, and Equity?

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Answer 2

Question

Chapter 3, Problem 3.15E

a.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be reported by P in its income statement as income from its investments in S if P used equity-method of accounting.

b.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be assigned to non-controlling interest in the consolidated income statement for 20X4.

c.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be reported by P as net consolidated income for 20X4.

d.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: The reason for Pto not report the consolidated net income of $79,000 ($59,000+$20,000) .

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Answer 3

Question

Chapter 3, Problem 3.15E

a.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be reported by P in its income statement as income from its investments in S if P used equity-method of accounting.

b.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be assigned to non-controlling interest in the consolidated income statement for 20X4.

c.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be reported by P as net consolidated income for 20X4.

d.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: The reason for Pto not report the consolidated net income of $79,000 ($59,000+$20,000) .

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Answer 4

Question

Chapter 3, Problem 3.15E

a.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be reported by P in its income statement as income from its investments in S if P used equity-method of accounting.

b.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be assigned to non-controlling interest in the consolidated income statement for 20X4.

c.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be reported by P as net consolidated income for 20X4.

d.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: The reason for Pto not report the consolidated net income of $79,000 ($59,000+$20,000) .

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Answer 5

Chapter 3, Problem 3.15E

a.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be reported by P in its income statement as income from its investments in S if P used equity-method of accounting.

b.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be assigned to non-controlling interest in the consolidated income statement for 20X4.

c.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be reported by P as net consolidated income for 20X4.

d.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: The reason for Pto not report the consolidated net income of $79,000 ($59,000+$20,000) .

Answer 6

Chapter 3, Problem 3.15E

a.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be reported by P in its income statement as income from its investments in S if P used equity-method of accounting.

Answer 7

Chapter 3, Problem 3.15E

a.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be reported by P in its income statement as income from its investments in S if P used equity-method of accounting.

Answer 8

b.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be assigned to non-controlling interest in the consolidated income statement for 20X4.

Answer 9

b.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be assigned to non-controlling interest in the consolidated income statement for 20X4.

Answer 10

c.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be reported by P as net consolidated income for 20X4.

Answer 11

c.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

Amount to be reported by P as net consolidated income for 20X4.

Answer 12

d.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: The reason for Pto not report the consolidated net income of $79,000 ($59,000+$20,000) .

Answer 13

d.

To determine

Concept Introduction:

Consolidation: Consolidation is the process of accounting where books of parent company is reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.

To Explain: The reason for Pto not report the consolidated net income of $79,000 ($59,000+$20,000) .

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 3 - What is the basic idea underlying the preparation...Ch. 3 - How might consolidated statements help an investor...Ch. 3 - Prob. 3.3Q Ch. 3 - Prob. 3.4Q Ch. 3 - Prob. 3.5Q Ch. 3 - Prob. 3.6Q Ch. 3 - Prob. 3.7Q Ch. 3 - Prob. 3.8Q Ch. 3 - Prob. 3.9Q Ch. 3 - Prob. 3.10Q

Solution Summary: The author explains that P should not report the consolidated net income of 79,000 (59,000+20,000) as Pdoes not use equity-method of accounting.

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Chapter 3 Solutions