(a)
Introduction:
Eliminating entries needed to prepare consolidated financial statements for 20X8
(b)
Introduction: A consolidated worksheet is used to prepare the consolidated financial statements of the parent company and its subsidiary. It reflects the individual values of the parent and the subsidiary and then one consolidated figure for both the entities.
Consolidation
(c)
Introduction: A consolidated worksheet is used to prepare the consolidated financial statements of the parent company and its subsidiary. It reflects the individual values of the parent and the subsidiary and then one consolidated figure for both the entities.
Consolidation balance sheet in good form
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ADVANCED FINANCIAL ACCOUNTING-ACCESS
- Corvus Company has gained control over the operations of Glaive Corporation by acquiring 75% of its outstanding capital stock for P4,650,000. This amount includes a control premium of P225,000. Data from the balance sheets of the two entities included the following amounts as of the date of acquisition: Corvus Company Glaive Corporation Cash 1,012,500 800,000 Accounts Receivable, net 2,770,000 675,000 Inventory 1,600,000 1,200,000 Land 3,000,000 2,400,000 Building 6,750,000 3,400,000 Accumulated Depreciation - Building (1,687,500) (1,700,000) Equipment 800,000 250,000 Accumulated Depreciation…arrow_forwardCorvus Company has gained control over the operations of Glaive Corporation by acquiring 75% of its outstanding capital stock for P4,650,000. This amount includes a control premium of P225,000. Data from the balance sheets of the two entities included the following amounts as of the date of acquisition: Corvus Company Glaive Corporation Cash 1,012,500 800,000 Accounts Receivable, net 2,770,000 675,000 Inventory 1,600,000 1,200,000 Land 3,000,000 2,400,000 Building 6,750,000 3,400,000 Accumulated Depreciation - Building (1,687,500) (1,700,000) Equipment 800,000 250,000 Accumulated Depreciation…arrow_forwardOn January 1, 20x1, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P30 per share and par value of P20 per share. The financial statements of ABC Co. and XYZ, Inc. immediately after the acquisition are shown below: Jan. 1, 20x1ABC Co. XYZ, Inc.Cash 20,000 10,000Accounts receivable 60,000 24,000Inventory 80,000 46,000Investment in subsidiary 150,000 Equipment 400,000 100,000Accumulated depreciation (40,000) (20,000)Total assets 670,000 160,000Accounts payable 40,000 12,000Bonds payable 60,000 -Share capital 340,000 100,000Share premium 130,000 -Retained earnings 100,000 48,000Total liabilities and equity 670,000 160,000 On January 1, 20x1, the fair value of the assets and liabilities of XYZ, Inc. were determined by appraisal, as follows:XYZ, Inc. Carrying amounts Fair values Fair value incrementCash 10,000 10,000 -Accounts receivable 24,000 24,000 -Inventory 46,000 62,000 16,000Equipment 100,000 120,000 20,000Accumulated depreciation (20,000)…arrow_forward
- Peace Company issued common shares with a par value of $58,000 and a market value of $165,300 in exchange for 30 percent ownership of Symbol Corporation on January 1, 20X2. Symbol reported the following balances on that date: Assets Cash Accounts Receivable Inventory (FIFO basis) Land Buildings & Equipment Less: Accumulated Depreciation Patent Total Assets Liabilities & Equities Accounts Payable SYMBOL CORPORATION Balance Sheet January 1, 20X2 Bonds Payable Common Stock Additional Paid-In Capital Retained Earnings Total Liabilities & Equities Book Value Fair Value $ 57,000 $ 57,000 97,000 97,000 133,000 163,000 55,000 70,000 505,000 326,000 (245,000) Investment income (loss) Balance in the investment account $ 602,000 $ 22,000 172,000 148,000 12,000 248,000 $ 602,000 32,000 $ 745,000 $ 22,000 172,000 The estimated economic life of the patents held by Symbol is 10 years. The buildings and equipment are expected to last 12 more years on average. Symbol paid dividends of $18,000 during…arrow_forwardAarrow_forwardkk.2arrow_forward
- Torres Investments acquired $233,600 of Murphy Corp., 6% bonds at their face amount on October 1, Year 1. The bonds pay interest on October 1 and April 1. On April 1, Year 2, Torres sold $111,200 of Murphy Corp. bonds at 105. Journalize the entries to record the following (refer to the Chart of Accounts for exact wording of account titles): a. The initial acquisition of the Murphy Corp. bonds on October 1, Year 1. b. The adjusting entry for three months of accrued interest earned on the Murphy Corp. bonds on December 31, Year 1. c. The receipt of semiannual interest on April 1, Year 2. d. The sale of $111,200 of Murphy Corp. bonds on April 1, Year 2, at 105.arrow_forwardPhone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $97,300. At that date, the fair value of the noncontrolling interest was $41,700. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Phone Corporation Smart Corporation Cash $ 58,300 $ 22,000 Accounts Receivable 109,000 49,000 Inventory 144,000 79,000 Land 73,000 36,000 Buildings & Equipment 426,000 266,000 Less: Accumulated Depreciation (166,000) (75,000) Investment in Smart Corporation 97,300 Total Assets $ 741,600 $ 377,000 Accounts Payable $ 142,500 $ 26,000 Mortgage Payable 331,100 233,000 Common Stock 68,000 39,000 Retained Earnings 200,000 79,000 Total Liabilities & Stockholders’ Equity $ 741,600 $ 377,000 At the date of the business combination, the book values of Smart’s assets and liabilities approximated fair value except for inventory, which had a fair value of…arrow_forwardPhone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $97,300. At that date, the fair value of the noncontrolling interest was $41,700. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Phone Corporation Smart Corporation Cash $ 58,300 $ 22,000 Accounts Receivable 109,000 49,000 Inventory 144,000 79,000 Land 73,000 36,000 Buildings & Equipment 426,000 266,000 Less: Accumulated Depreciation (166,000) (75,000) Investment in Smart Corporation 97,300 Total Assets $ 741,600 $ 377,000 Accounts Payable $ 142,500 $ 26,000 Mortgage Payable 331,100 233,000 Common Stock 68,000 39,000 Retained Earnings 200,000 79,000 Total Liabilities & Stockholders’ Equity $ 741,600 $ 377,000 At the date of the business combination, the book values of Smart’s assets and liabilities approximated fair value except for inventory, which had a fair value of…arrow_forward
- last two questionsarrow_forwardPhone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $98,000. At that date, the fair value of the noncontrolling interest was $42,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Phone Corporation Smart Corporation Cash $ 52,300 $ 39,000 Accounts Receivable 99,000 59,000 Inventory 136,000 92,000 Land 66,000 49,000 Buildings & Equipment 417,000 268,000 Less: Accumulated Depreciation (151,000) (73,000) Investment in Smart Corporation 98,000 Total Assets $ 717,300 $ 434,000 Accounts Payable $ 141,500 $ 27,000 Mortgage Payable 300,800 288,000 Common Stock 72,000 40,000 Retained Earnings 203,000 79,000 Total Liabilities & Stockholders’ Equity $ 717,300 $ 434,000 At the date of the business combination, the book values of Smart’s assets and liabilities approximated fair value except for inventory, which had a fair value of…arrow_forwardPhone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $98,000. At that date, the fair value of the noncontrolling interest was $42,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Phone Corporation Smart Corporation Cash $ 52,300 $ 39,000 Accounts Receivable 99,000 59,000 Inventory 136,000 92,000 Land 66,000 49,000 Buildings & Equipment 417,000 268,000 Less: Accumulated Depreciation (151,000) (73,000) Investment in Smart Corporation 98,000 Total Assets $ 717,300 $ 434,000 Accounts Payable $ 141,500 $ 27,000 Mortgage Payable 300,800 288,000 Common Stock 72,000 40,000 Retained Earnings 203,000 79,000 Total Liabilities & Stockholders’ Equity $ 717,300 $ 434,000 At the date of the business combination, the book values of Smart’s assets and liabilities approximated fair value except for inventory, which had a fair value of…arrow_forward