Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 3, Problem 3B.3.1AP
To determine
Determination and distribution of excess income schedule
Through this price paid for subsidiary equity is compared with predetermine imbalance which is occurred in the consolidated worksheet because of elimination of in the investment account against the underlying subsidiary equity.
To calculate:
Prepare determination and distribution of excess schedule.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
On March 1, 2015, Penson Enterprises purchases an 80% interest in Express Corporation for $320,000 cash. Express Corporation has the following balance sheet on February 28, 2015: (attached)Penson Enterprises receives an independent appraisal on the fair values of Express Corporation’s assets and liabilities. The controller has reviewed the following figures and accepts them as reasonable:Accounts receivable . . . . . . . . . . $ 60,000Inventory . . . . . . . . . . . . . . . . . . . 100,000Land. . . . . . . . . . . . . . . . . . . . . . . 50,000Buildings . . . . . . . . . . . . . . . . . . . 200,000Equipment . . . . . . . . . . . . . . . . . . 162,000Current liabilities . . . . . . . . . . . . . 50,000Bonds payable . . . . . . . . . . . . . . 95,0001. Record the investment in Express Corporation.2. Prepare the value analysis schedule and the determination and distribution of excess schedule.3. Prepare the elimination entries that would be made on a consolidated worksheet prepared on the…
V3. JH Corporation acquires Sunny corporation for $100 cash on January 1, 2017. Sunny has $200 of NOLs from its pre-acquisition filings. The long-term tax-exempt rate for January 2017 is 4%. Determine how much of Sunny’s NOLs can be used in 2017.
aste Company owns an 80% controlling interest in the Bastion Company. Bastion regularly sells merchandise to Baste, which then sold to outside parties. The gross profit on all such sales is 40%. On January 1, 2019, Baste sold land and a building to Bastion. The value of the parcel is 20% to land and 80% to structures. The data are the following:Baste BastionInternally generated net income, 2019 P1,560,000 P750,000Internally generated net income, 2020 10,320,000 705,000Intercompany merchandise sales, 2019 300,000Intercompany merchandise sales, 2020 360,000Intercompany inventory, December 31, 2019 45,000Intercompany inventory, December 31, 2020 60,000Cost of real estate sold on January 1, 2019 1,800,000Sales price of real estate on January 1, 2019 2,400,000Depreciable life of building 20 yearsFor 2019, what is the consolidated comprehensive income attributable to controlling interest?a. 1,575,000b. 1,597,500c. 1,569,600d. 1,875,000
Chapter 3 Solutions
Advanced Accounting
Ch. 3 - Prob. 1UTICh. 3 - Prob. 2UTICh. 3 - Prob. 3UTICh. 3 - Prob. 4UTICh. 3 - Prob. 5UTICh. 3 - Prob. 6UTICh. 3 - Prob. 7UTICh. 3 - Prob. 1ECh. 3 - Prob. 2ECh. 3 - Prob. 3.1E
Ch. 3 - Prob. 3.2ECh. 3 - Prob. 3.3ECh. 3 - Prob. 3.4ECh. 3 - Prob. 3.5ECh. 3 - Equity method, second year, eliminations, income...Ch. 3 - Prob. 4.2ECh. 3 - Prob. 5.1ECh. 3 - Prob. 5.2ECh. 3 - Prob. 5.3ECh. 3 - Prob. 5.4ECh. 3 - Prob. 5.5ECh. 3 - Prob. 6.1ECh. 3 - Prob. 6.2ECh. 3 - Prob. 7.1ECh. 3 - Prob. 7.2ECh. 3 - Prob. 7.3ECh. 3 - Prob. 7.4ECh. 3 - Prob. 7.5ECh. 3 - Prob. 8.1ECh. 3 - Prob. 8.2ECh. 3 - Prob. 9ECh. 3 - Prob. 10.1ECh. 3 - Prob. 10.2ECh. 3 - Prob. 10.3ECh. 3 - Prob. 11ECh. 3 - Prob. 3B.1.1AECh. 3 - Prob. 3B.1.2AECh. 3 - Prob. 3B.1.3AECh. 3 - Prob. 3B.2.1AECh. 3 - Prob. 3B.2.2AECh. 3 - Prob. 3B.3AECh. 3 - Prob. 3.1.1PCh. 3 - Prob. 3.1.2PCh. 3 - Prob. 3.1.3PCh. 3 - Prob. 3.2.1PCh. 3 - Prob. 3.2.2PCh. 3 - Prob. 3.3.1PCh. 3 - Prob. 3.3.2PCh. 3 - Prob. 3.3.3PCh. 3 - Prob. 3.3.4PCh. 3 - Prob. 3.4.1PCh. 3 - Prob. 3.4.2PCh. 3 - Prob. 3.5.1PCh. 3 - Prob. 3.5.2PCh. 3 - Prob. 3.5.3PCh. 3 - Prob. 3.6.1PCh. 3 - Prob. 3.6.2PCh. 3 - Prob. 3.6.3PCh. 3 - Prob. 3.7.1PCh. 3 - Prob. 3.7.2PCh. 3 - Prob. 3.7.3PCh. 3 - Prob. 3.8.1PCh. 3 - Prob. 3.8.2PCh. 3 - Prob. 3.9.1PCh. 3 - Prob. 3.9.2PCh. 3 - Prob. 3.10.1PCh. 3 - Prob. 3.10.2PCh. 3 - Prob. 3.11.1PCh. 3 - Prob. 3.11.2PCh. 3 - Prob. 3.12.1PCh. 3 - Prob. 3.12.2PCh. 3 - Prob. 3.13.1PCh. 3 - Prob. 3.13.2PCh. 3 - Prob. 3.15.1PCh. 3 - Prob. 3.15.2PCh. 3 - Prob. 3.16.1PCh. 3 - Prob. 3.16.2PCh. 3 - Prob. 3.17.1PCh. 3 - Prob. 3.17.2PCh. 3 - Prob. 3.18.1PCh. 3 - Prob. 3.18.2PCh. 3 - Prob. 3A.1.1APCh. 3 - Prob. 3A.1.2APCh. 3 - Prob. 3A.2APCh. 3 - Prob. 3A.3APCh. 3 - Prob. 3B.1APCh. 3 - Prob. 3B.2APCh. 3 - Prob. 3B.3.1APCh. 3 - The trial balances of Campton Corporation and Dorn...Ch. 3 - The trial balances of Campton Corporation and Dorn...
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
- Ocean Ltd is the parent entity to the wholly owned subsidiaries of River Ltd, Creek Ltd, and Puddle Ltd. During the year ended 30 June 2022 the following transactions occurred within Ocean Ltd group. The perpetual inventory system has been adopted by all entities in the Ocean Ltd group and the tax rate is 30% for all accounting periods. On 01 July 2021 Ocean Ltd sold an item of equipment to Creek Ltd for $850,000 cash. The original cost of the equipment was $950,000. Ocean Ltd adopted an accounting policy whereby equipment was being depreciated on a straight line basis over its useful life of 8 years. The carrying amount of the equipment in Ocean Ltd financial statements at the date of sale was $520,000. Subsequent to the transfer, Creek Ltd depreciated the equipment on a straight line basis over its remaining useful life of 3 years. Required: Fill in the missing amount for the following accounts that will appear in the consolidated adjusting journal…arrow_forwardPlease do answer following question asap.arrow_forwardOn January 1, 2021, Knight Corporation purchases all the outstanding shares of Craig Company for $950,000. It has been decided that Craig Company will use push-down accounting principles to account for this transaction. The current balance sheet is stated at historical cost. The following balance sheet is prepared for Craig Company on January 1, 2021: (see attachment)Knight Corporation receives the following appraisals for Craig Company’s assets and liabilities: Cash . . . . . . . . . . . . . . . . . . . . . . $ 80,000 Accounts receivable . . . . . . . . . . 260,000 Prepaid expenses . . . . . . . . . . . . 20,000 Land. . . . . . . . . . . . . . . . . . . . . . . 250,000 Building (net) . . . . . . . . . . . . . . . . 700,000 Current liabilities . . . . . . . . . . . . . 90,000 Bonds payable . . . . . . . . . . . . . . 280,000 Deferred tax liability . . . . . . . . . . 40,000 1. Record the investment. 2. Prepare the value analysis schedule and the determination and distribution of…arrow_forward
- Company R owns a 30% interest in Company E, which it acquires at book value. Company E reports net income of $50,000 for 2015 (ignore taxes). There is an intercompany sale of equipment at a gain of $20,000 on January 1, 2015. The equipment has a 5-year life. What is Company R’s investment income for 2015, and what adjusting entry (if any) does Company R need to make as a result of the equipment sale, if: a. Company E made the sale? b. Company R made the sale?arrow_forwardReimers Company acquires Rollins Corporation on January 1, 2017. As part of the agreement, the parent states that an additional $100,000 payment to the former owners of Rollins will be made in 2018, if Rollins achieves certain income thresholds during the first two years following the acquisition. How should Reimers account for this contingency in its 2017 consolidated financial statements?arrow_forwardOn July 1, 2020, Blue George Company purchased 25% interest of Pink Conrad for P150,000. Blue George incurred transaction cost equal to 5% on the transaction price. On October 1, 2020, Pink Conrad declared dividends of P80,000. At the end of 2020, Pink Conrad reported net income of P200,000. On January 1, 2021, the fair values of Pink Conrad's net assets were as follows:Current Assets - P100,000;Equipment - P150,000;Patent – P120,000;Land - P50,000;Buildings - P300,000; andLiabilities - P80,000. On January 1, 2021, Blue George Company purchased 50% interest of the Pink Conrad Company by issuing 100,000 shares of its P1 par value stock when the fair value of the stock was P6.20. Pink Conrad paid for the legal fees of P10,000 and securities SEC registration of P20,000 which was reimbursed by Blue George. The Patent of Pink Conrad refers to the technology purchased by Pink Conrad from Blue George years ago. Blue George had an outstanding unearned revenue related to the Patent amounting to…arrow_forward
- On July 1, 2020, Blue George Company purchased 25% interest of Pink Conrad for P150,000. Blue George incurred transaction cost equal to 5% on the transaction price. On October 1, 2020, Pink Conrad declared dividends of P80,000. At the end of 2020, Pink Conrad reported net income of P200,000. On January 1, 2021, the fair values of Pink Conrad's net assets were as follows:Current Assets - P100,000;Equipment - P150,000;Patent – P120,000;Land - P50,000;Buildings - P300,000; andLiabilities - P80,000. On January 1, 2021, Blue George Company purchased 50% interest of the Pink Conrad Company by issuing 100,000 shares of its P1 par value stock when the fair value of the stock was P6.20. Pink Conrad paid for the legal fees of P10,000 and securities SEC registration of P20,000 which was reimbursed by Blue George. The Patent of Pink Conrad refers to the technology purchased by Pink Conrad from Blue George years ago. Blue George had an outstanding unearned revenue related to the Patent amounting to…arrow_forwardNew Inc. acquires 100% of the stock of Old Co. on January 4, 2020, for $4,100 cash. As of that date, Old has the following trial balance: Debit CreditCash$500Accounts receivable600Inventory900Buildings (net) (5-year life)1,600Equipment (net ) (2-year life) 1,000Land900Accounts payable$400Long-term liabilities (due 12/31/22)1, 900Common stock 1,000Additional paid-in capital700 Retained earnings1,500 Total $5,500$5,500 Net income and dividends reported by Old for 2020 and 2021 follow: 20202021 Net income$120$140 Dividends4050 The fair value of Old Co.'s net assets that differ from their book values are listed below: Fair ValueBuildings$1,200 Equipment1, 350 Land 1,300 Long-term liabilities1,750 Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life. Compute the amount of Old Co.'s long-term liabilities that would be reported in a December 31, 2020, consolidated balance sheet. correct answer is 1800 since I already got…arrow_forwardOn January 1, 2022, De Lorean Company acquired 10,000 ordinary shares of Marty Company for P10 per share. The ownership stake in Marty Company is 10%. De Lorean Company purchased Marty Company’s shares solely for trading and treats the same as FVPL investments. For the acquisition, De Lorean Company paid brokerage fees amounting to P10,000. At what amount should De Lorean Company value its investment at the time of purchase?arrow_forward
- please explain itarrow_forwardOn January 1, 2020, Merlo Company acquired 80% of the stocks of Fritzie Company for P2,000,000. On this date, Fritzie Company had P1,000,000 of Capital Stock and P800,000 of Retained Earnings. On this date, the carrying values of the identifiable assets and liabilities of Fritzie Company are equal to their fair values.During the year, Merlo Company ships merchandise to Fritzie Company merchandise amounting to P800,000, which includes 25% gross profit rate. At the end of the year, records show the following: Merlo Company Fritzie CompanyInventories, Jan 1. P350,000 P120,000Inventories, Dec. 31 400,000 200,000Sales 5,500,000 2,500,000Cost of Sales 3,200,000 1,600,000Operating expenses 650,000 300,000Dividends paid 500,000 350,000The ending…arrow_forwardOn January 2, 20X1, Padre Corporation (PC) purchases 80% of the common stock of Son Company (SC) for P300,000. SC’s has P200,000 and P50,000 book value of common stock and retained earnings. The book values of SC identifiable net assets approximate their related fair values. On May 20X1, PC sold merchandise costing P19,600 to SC for P24,500. Out of which, only P5,000 remains unsold by SC at the end of 20X1. PC and Saul use the same mark-up based on cost.In 20X2, PC sold another merchandise to SC for P30,000. Of the said merchandise, P8,000 remains in the ending inventory of 20X2. PC has P50,000 and P80,000 comprehensive income from its operations on 20X1 and 20X2, respectively. On the other hand, SC has P20,000 and P50,000 comprehensive income from its operations for 20X1 and 20X2.Required:• Prepare the necessary entries to be made by both companies for 20X1 and 20X2.• Allocate the consolidated comprehensive income to the controlling and non-controlling interest for 20X1 and 20X2.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you