Consolidation of Statements: In today’s world of business acquisition of smaller companies is common and such acquisitions helps in the growth of the parent company. Once a company acquires another company the net assets of the other company is recorded in the books of the parent company. Consolidation of financial statements of both the parent company and subsidiary company is important for the stockholders of the parent company. A parent company may choose any of the two basic methods for consolidation and they are the equity method or cost method. The accounting methods used by a parent company for consolidation is purely based on their convenience. Amortization: Amortization is same as depreciation , but it is used for intangible assets like patents, franchise, goodwill , trademark etc. The cost of intangible assets is allocated to expense over its useful life and this process is called amortization. To explain : What is the non-controlling share of consolidated income and does it reflect fair value adjustments at purchase date and how it was displayed in the past and how it should be displayed now?

Question

Rivertown Media has reported a total asset turnover of 2.8 times and an ROA of 15% and ROE of 22%. What is the firm's net profit margin?

Answer 1

Question

Chapter 3, Problem 3UTI

To determine

Consolidation of Statements:

In today’s world of business acquisition of smaller companies is common and such acquisitions helps in the growth of the parent company. Once a company acquires another company the net assets of the other company is recorded in the books of the parent company. Consolidation of financial statements of both the parent company and subsidiary company is important for the stockholders of the parent company. A parent company may choose any of the two basic methods for consolidation and they are the equity method or cost method. The accounting methods used by a parent company for consolidation is purely based on their convenience.

Amortization:

Amortization is same as depreciation, but it is used for intangible assets like patents, franchise, goodwill, trademark etc. The cost of intangible assets is allocated to expense over its useful life and this process is called amortization.

To explain: What is the non-controlling share of consolidated income and does it reflect fair value adjustments at purchase date and how it was displayed in the past and how it should be displayed now?

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Answer 2

Question

Chapter 3, Problem 3UTI

To determine

Consolidation of Statements:

In today’s world of business acquisition of smaller companies is common and such acquisitions helps in the growth of the parent company. Once a company acquires another company the net assets of the other company is recorded in the books of the parent company. Consolidation of financial statements of both the parent company and subsidiary company is important for the stockholders of the parent company. A parent company may choose any of the two basic methods for consolidation and they are the equity method or cost method. The accounting methods used by a parent company for consolidation is purely based on their convenience.

Amortization:

Amortization is same as depreciation, but it is used for intangible assets like patents, franchise, goodwill, trademark etc. The cost of intangible assets is allocated to expense over its useful life and this process is called amortization.

To explain: What is the non-controlling share of consolidated income and does it reflect fair value adjustments at purchase date and how it was displayed in the past and how it should be displayed now?

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Answer 3

Question

Chapter 3, Problem 3UTI

To determine

Consolidation of Statements:

In today’s world of business acquisition of smaller companies is common and such acquisitions helps in the growth of the parent company. Once a company acquires another company the net assets of the other company is recorded in the books of the parent company. Consolidation of financial statements of both the parent company and subsidiary company is important for the stockholders of the parent company. A parent company may choose any of the two basic methods for consolidation and they are the equity method or cost method. The accounting methods used by a parent company for consolidation is purely based on their convenience.

Amortization:

Amortization is same as depreciation, but it is used for intangible assets like patents, franchise, goodwill, trademark etc. The cost of intangible assets is allocated to expense over its useful life and this process is called amortization.

To explain: What is the non-controlling share of consolidated income and does it reflect fair value adjustments at purchase date and how it was displayed in the past and how it should be displayed now?

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Answer 4

Question

Chapter 3, Problem 3UTI

To determine

Consolidation of Statements:

In today’s world of business acquisition of smaller companies is common and such acquisitions helps in the growth of the parent company. Once a company acquires another company the net assets of the other company is recorded in the books of the parent company. Consolidation of financial statements of both the parent company and subsidiary company is important for the stockholders of the parent company. A parent company may choose any of the two basic methods for consolidation and they are the equity method or cost method. The accounting methods used by a parent company for consolidation is purely based on their convenience.

Amortization:

Amortization is same as depreciation, but it is used for intangible assets like patents, franchise, goodwill, trademark etc. The cost of intangible assets is allocated to expense over its useful life and this process is called amortization.

To explain: What is the non-controlling share of consolidated income and does it reflect fair value adjustments at purchase date and how it was displayed in the past and how it should be displayed now?

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Answer 5

Chapter 3, Problem 3UTI

To determine

Consolidation of Statements:

In today’s world of business acquisition of smaller companies is common and such acquisitions helps in the growth of the parent company. Once a company acquires another company the net assets of the other company is recorded in the books of the parent company. Consolidation of financial statements of both the parent company and subsidiary company is important for the stockholders of the parent company. A parent company may choose any of the two basic methods for consolidation and they are the equity method or cost method. The accounting methods used by a parent company for consolidation is purely based on their convenience.

Amortization:

Amortization is same as depreciation, but it is used for intangible assets like patents, franchise, goodwill, trademark etc. The cost of intangible assets is allocated to expense over its useful life and this process is called amortization.

To explain: What is the non-controlling share of consolidated income and does it reflect fair value adjustments at purchase date and how it was displayed in the past and how it should be displayed now?

Answer 6

Chapter 3, Problem 3UTI

To determine

Consolidation of Statements:

In today’s world of business acquisition of smaller companies is common and such acquisitions helps in the growth of the parent company. Once a company acquires another company the net assets of the other company is recorded in the books of the parent company. Consolidation of financial statements of both the parent company and subsidiary company is important for the stockholders of the parent company. A parent company may choose any of the two basic methods for consolidation and they are the equity method or cost method. The accounting methods used by a parent company for consolidation is purely based on their convenience.

Amortization:

Amortization is same as depreciation, but it is used for intangible assets like patents, franchise, goodwill, trademark etc. The cost of intangible assets is allocated to expense over its useful life and this process is called amortization.

To explain: What is the non-controlling share of consolidated income and does it reflect fair value adjustments at purchase date and how it was displayed in the past and how it should be displayed now?

Answer 7

Chapter 3, Problem 3UTI

To determine

Consolidation of Statements:

In today’s world of business acquisition of smaller companies is common and such acquisitions helps in the growth of the parent company. Once a company acquires another company the net assets of the other company is recorded in the books of the parent company. Consolidation of financial statements of both the parent company and subsidiary company is important for the stockholders of the parent company. A parent company may choose any of the two basic methods for consolidation and they are the equity method or cost method. The accounting methods used by a parent company for consolidation is purely based on their convenience.

Amortization:

Amortization is same as depreciation, but it is used for intangible assets like patents, franchise, goodwill, trademark etc. The cost of intangible assets is allocated to expense over its useful life and this process is called amortization.

To explain: What is the non-controlling share of consolidated income and does it reflect fair value adjustments at purchase date and how it was displayed in the past and how it should be displayed now?

Answer 8

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Answer 19

Ch. 3 - Prob. 1UTI Ch. 3 - Prob. 2UTI Ch. 3 - Prob. 3UTI Ch. 3 - Prob. 4UTI Ch. 3 - Prob. 5UTI Ch. 3 - Prob. 6UTI Ch. 3 - Prob. 7UTI Ch. 3 - Prob. 1E Ch. 3 - Prob. 2E Ch. 3 - Prob. 3.1E

Solution Summary: The author explains that the non-controlling share of consolidated income is the subsidiary company's internal net income and it reflects fair value adjustments at purchase date.

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