Concept explainers
(a)
Introduction:
Consolidation entries needed to prepare a consolidated
(b)
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 recording all the transactions occurring in the business.
Consolidation entries needed to prepare a consolidated balance sheet
Want to see the full answer?
Check out a sample textbook solutionChapter 4 Solutions
ADVANCED FIN. ACCT. LL W/ACCESS>CUSTOM<
- Putt Corporation acquired 80 percent of Slice Company's voting common stock on January 1, 20X4, for $138,000. At that date, the fair value of the noncontrolling interest was $34,500. Slice's balance sheet at the date of acquisition contained the following balances: Cash Accounts Receivable Land Building and Equipment Less: Accumulated Depreciation Total Assets SLICE COMPANY Balance Sheet January 1, 20X4 $ 20,000 35,000 90,000 300,000 (85,000) $360,000 Accounts Payable Notes Payable Common Stock Additional Paid-in Capital Retained Earnings Total Liabilities and Stockholders' Equity $ 35,000 180,000 100,000 75,000 (30,000) $360,000 At the date of acquisition, the reported book values of Slice's assets and liabilities approximated fair value. Required: Prepare the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business combination. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first…arrow_forwardParent Company acquired 90% of Son Incorporate on January 31, 20X2 in exchange for cash. The book value of Son's individual assets and liabilities approximated their acquisition- date fair values. On the date of acquisition, Son reported the following: Cash Inventory Plant Assets (net) Property Total Assets $ 350,000 100,000 Current Liabilities $ 120,000 320,000 Common Stock 500,000 $ 1,270,000 Retained Earnings Total Liabilities and Equity 100,000 1,050,000 $ 1,270,000 During the year Son Incorporate reported $310,000 in net income and declared $15,000 in dividends. Parent Company reported $520,000 in net income and declared $25,000 in dividends. Parent accounts for their investment using the equity method. Required: 1) What journal entry will Parent make on the date of acquisition to record the Investment in Son Incorporate? 2) If Parent were to prepare a consolidated balance sheet on the acquisition date (January 31, 20X2), what is the basic consolidation entry Parent would use in…arrow_forwardProfessor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31, 20X4, for $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation Investment in Scholar Corporation Total Assets Accounts Payable Mortgage Payable Common Stock Retained Earnings Total Liabilities & Stockholders' Equity Assets Cash Professor Scholar Corporation Corporation $50,300 Accounts receivable Inventory Land Buildings and equipment Less: Accumulated depreciation Investment in Scholar Corporation Total Assets Liabilities & Equity Accounts payable Mortgage payable Common stock Retained earnings NCI in Net assets of Scholar Corporation Total Liabilities & Equity 90,000 130,000 60,000 410,000 (150,000) 102,200 $ 692,500 $152,500 250,000…arrow_forward
- Sagararrow_forwardProfessor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31, 20X4, fr $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies Included the following amounts as of the date of acquisition: Item Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation. Investment in Scholar Corporation Total Assets Accounts Payable Mortgage Payable Common Stock Retained Earnings Total Liabilities & Stockholders' Equity Professor Corporation $ 50,300 90,000 Scholar Corporation $21,000 44,000 130,000 75,000 60,000 30,000 410,000 250,000 (150,000) (80,000) 102,200 $ 692,500 $340,000 $ 152,500 $ 35,000 250,000 180,000 80,000 40,000 210,000 85,000 $ 692,500 $340,000 At the date of the business combination, the book values of Scholar's assets and liabilities approximated fair value except for Inventory, which had a fair value of $81,000, and…arrow_forwardPlease do not give image formatarrow_forward
- Determine the Consolidated Retained Earnings, December 31, 20x4.arrow_forwardWhen Jolt Co. acquired 75% of the common stock of Yelts Corp., Yelts owned land with a book value of $70,000 and a fair value of $100,000. What amount should have been reported for the land in a consolidated balance sheet at the acquisition date? A. $ 52,500. B. $ 70,000. C. $ 75,000. D. $ 92,500. E. $100,000.arrow_forwardDetermine the Consolidated/Group Net Income for 20x4.arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education