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. Depreciation : Fixed assets play a major in the contribution of revenue to the company and they are significant for the efficient and continuous operation of the day to the day business. Depreciation is the process in which the cost of the fixed assets other than land is allocated to expense over the useful life of the asset. To determine the impact that inventory and equipment acquired in the acquisition on would have on consolidated net income in 2015 and 2016.

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Please provide the accurate answer to this financial accounting problem using valid techniques.

Answer 1

Question

Chapter 3, Problem 5UTI

To determine

Concept Introduction:

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.

Depreciation:

Fixed assets play a major in the contribution of revenue to the company and they are significant for the efficient and continuous operation of the day to the day business. Depreciation is the process in which the cost of the fixed assets other than land is allocated to expense over the useful life of the asset.

To determine the impact that inventory and equipment acquired in the acquisition on would have on consolidated net income in 2015 and 2016.

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Answer 2

Question

Chapter 3, Problem 5UTI

To determine

Concept Introduction:

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.

Depreciation:

Fixed assets play a major in the contribution of revenue to the company and they are significant for the efficient and continuous operation of the day to the day business. Depreciation is the process in which the cost of the fixed assets other than land is allocated to expense over the useful life of the asset.

To determine the impact that inventory and equipment acquired in the acquisition on would have on consolidated net income in 2015 and 2016.

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Answer 3

Question

Chapter 3, Problem 5UTI

To determine

Concept Introduction:

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.

Depreciation:

Fixed assets play a major in the contribution of revenue to the company and they are significant for the efficient and continuous operation of the day to the day business. Depreciation is the process in which the cost of the fixed assets other than land is allocated to expense over the useful life of the asset.

To determine the impact that inventory and equipment acquired in the acquisition on would have on consolidated net income in 2015 and 2016.

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Answer 4

Question

Chapter 3, Problem 5UTI

To determine

Concept Introduction:

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.

Depreciation:

Fixed assets play a major in the contribution of revenue to the company and they are significant for the efficient and continuous operation of the day to the day business. Depreciation is the process in which the cost of the fixed assets other than land is allocated to expense over the useful life of the asset.

To determine the impact that inventory and equipment acquired in the acquisition on would have on consolidated net income in 2015 and 2016.

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Answer 5

Chapter 3, Problem 5UTI

To determine

Concept Introduction:

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.

Depreciation:

Fixed assets play a major in the contribution of revenue to the company and they are significant for the efficient and continuous operation of the day to the day business. Depreciation is the process in which the cost of the fixed assets other than land is allocated to expense over the useful life of the asset.

To determine the impact that inventory and equipment acquired in the acquisition on would have on consolidated net income in 2015 and 2016.

Answer 6

Chapter 3, Problem 5UTI

To determine

Concept Introduction:

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.

Depreciation:

Fixed assets play a major in the contribution of revenue to the company and they are significant for the efficient and continuous operation of the day to the day business. Depreciation is the process in which the cost of the fixed assets other than land is allocated to expense over the useful life of the asset.

To determine the impact that inventory and equipment acquired in the acquisition on would have on consolidated net income in 2015 and 2016.

Answer 7

Chapter 3, Problem 5UTI

To determine

Concept Introduction:

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.

Depreciation:

Fixed assets play a major in the contribution of revenue to the company and they are significant for the efficient and continuous operation of the day to the day business. Depreciation is the process in which the cost of the fixed assets other than land is allocated to expense over the useful life of the asset.

To determine the impact that inventory and equipment acquired in the acquisition on would have on consolidated net income in 2015 and 2016.

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 acquisition of smaller companies helps in the growth of the parent company. The equity method or cost method is used to consolidate financial statements.

Chapter 3 Solutions