ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Question
Chapter 3, Problem 3.26P
a.
To determine
Introduction: Journal entries is a systematic method of recording transactions as and when they occur. It is a summary of transactions divided into the debit and credit items that are recorded chronologically. It is an act of keeping and recoding all the transactions occurring in the business.
The
a.
Expert Solution
Explanation of Solution
Recording the initial investment in S’ books.
| Particular | Amount | Amount |
| Investment in S Dr. | ||
| Cash Cr. |
b.
To determine
Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the
The consolidate worksheet of the final values by the P’s book.
b.
Expert Solution
Explanation of Solution
Consolidated worksheet:
| Book value | |||||||
| NC | + | P | = | Common stock | = | Retained earnings | |
| Original book value |
| P’s | S’s | Elimination DR | Elimination CR | consolidated | |
| Cash | |||||
| Amount received | |||||
| Inventory | |||||
| Investment in S | 270,000 | ||||
| Land | 225,000 | 100,000 | 325,000 | ||
| Building and equipment | 700,000 | 200,000 | 10000 | 890,000 | |
| Accumulated depreciation | (400,000) | (10,000) | 10000 | (400,000) | |
| Total assets | |||||
| Account payable | |||||
| Bonds | |||||
| Common stock | 500000 | 500000 | 200000 | 200000 | 500000 |
| Retain earning | 225000 | 100000 | 100000 | 225000 | |
| NCI in NA of S | |||||
| Total liabilities |
c.
To determine
Concept Introduction:
Consolidated financial statements are financial statement maintained by entity with multiple subsidiary and division.
To Prepare:
The Consolidated balance sheet immediately following the acquisition.
c.
Expert Solution
Explanation of Solution
The Consolidated balance sheet immediately following the acquisition is as follows:
| P and S | ||
| Consolidated Balance sheet | ||
| Particulars | Amount | Amount |
| Cash | ||
| Inventory | ||
| Land | ||
| Building and Equipment | ||
| Less: | ||
| Total assets | ||
| Accounts Payable | ||
| Bonds Payable | ||
| Common Stock | ||
| Retained earnings | ||
| Non-controlling interest | ||
| Total liabilities and stock holders’ equity | ||
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Required information
On January 1, 20X2, Power Company acquired 80 percent of Strong Company's outstanding stock for cash. The fair value
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date of acquisition. Selected balance sheet data at December 31, 20X2 are as follows:
Total Assets
Liabilities
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Total Liabilities & Stockholders' Equity
Multiple Choice
O
$35,200
Based on the preceding information, what amount should be reported as noncontrolling interest in net assets in Power Company's December 31, 20X2, consolidated balance sheet?
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PARAGRAPH CORPORATION AND SUBSIDIARY
Consolidated Balance Sheet
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$ 20,000…
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$1,000 for professional fees to facilitate the transaction. The following information has been assembled just prior to the acquisition
date:
Show Transcribed Text
Goodwill
Plant assets (net)
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Shareholders' equity
Long-term debt
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Show Transcribed Text
(i) the acquisition method
(ii) the new-entity method
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$
80,000
50.000
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$ 75,000
25,000
30.000
3
$130,000
ü
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3
Fair Value
$ 38,000
90,000
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Carrying Amount
$
20.000
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Chapter 3 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 3 - What is the basic idea underlying the preparation...Ch. 3 - How might consolidated statements help an investor...Ch. 3 - Prob. 3.3QCh. 3 - Prob. 3.4QCh. 3 - Prob. 3.5QCh. 3 - Prob. 3.6QCh. 3 - Prob. 3.7QCh. 3 - Prob. 3.8QCh. 3 - Prob. 3.9QCh. 3 - Prob. 3.10Q
Ch. 3 - Prob. 3.11QCh. 3 - Prob. 3.12QCh. 3 - What is meant by indirect control? Give an...Ch. 3 - Prob. 3.14QCh. 3 - Prob. 3.15QCh. 3 - Prob. 3.16QCh. 3 - Prob. 3.17QCh. 3 - Prob. 3.18QCh. 3 - Prob. 3.1CCh. 3 - Prob. 3.2CCh. 3 - Prob. 3.1.1ECh. 3 - Prob. 3.1.2ECh. 3 - Prob. 3.1.3ECh. 3 - Prob. 3.1.4ECh. 3 - Multiple-Choice Question on Variable Interest...Ch. 3 - Multiple-Choice Question on Variable Interest...Ch. 3 - Prob. 3.2.3ECh. 3 - Prob. 3.2.4ECh. 3 - Prob. 3.3.1ECh. 3 - Prob. 3.3.2ECh. 3 - Prob. 3.3.3ECh. 3 - Prob. 3.4.1ECh. 3 - Prob. 3.4.2ECh. 3 - Prob. 3.4.3ECh. 3 - Prob. 3.4.4ECh. 3 - Balance Sheet Consolidation On January 1, 20X3,...Ch. 3 - Prob. 3.6ECh. 3 - Prob. 3.7ECh. 3 - Prob. 3.8ECh. 3 - Prob. 3.9ECh. 3 - Reporting for a Variable Interest Entity Gamble...Ch. 3 - Prob. 3.11ECh. 3 - Prob. 3.12ECh. 3 - Prob. 3.13ECh. 3 - Prob. 3.14ECh. 3 - Prob. 3.15ECh. 3 - Prob. 3.16ECh. 3 - Prob. 3.17ECh. 3 - Prob. 3.18ECh. 3 - Prob. 3.19.1PCh. 3 - Prob. 3.19.2PCh. 3 - Prob. 3.20PCh. 3 - Prob. 3.21PCh. 3 - Prob. 3.22PCh. 3 - Prob. 3.23PCh. 3 - Prob. 3.24PCh. 3 - Prob. 3.25PCh. 3 - Prob. 3.26PCh. 3 - Prob. 3.27PCh. 3 - Prob. 3.28PCh. 3 - Prob. 3.29PCh. 3 - Consolidated Worksheet at End of the First Year of...Ch. 3 - Prob. 3.31P
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