ADV.FIN.ACCT. CONNECT+PROCTORIO PLUS
12th Edition
ISBN: 9781266379017
Author: Christensen
Publisher: INTER MCG
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Chapter 5, Problem 5.19P
a
To determine
Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, the parent must also write off portion of differential of excess acquisition price. Further all the intercompany transactions must be eliminated before preparation of consolidated financial statements.
The amount of investment in S reported by P.
b
To determine
Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, the parent must also write off portion of differential of excess acquisition price. Further all the intercompany transactions must be eliminated before preparation of consolidated financial statements.
The
c
To determine
Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, the parent must also write off portion of differential of excess acquisition price. Further all the intercompany transactions must be eliminated before preparation of consolidated financial statements.
The non-controlling interest reported in consolidated
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Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $216,000. At that date, the fair
value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common
stock for $97,000. Summarized balance sheets for Split on the dates indicated are as follows:
Assets
Cash
Accounts Receivable
Inventory
Buildings & Equipment (net)
Total Assets
Liabilities & Equities
Accounts Payable
Bonds Payable
Common Stock
Retained Earnings
Total Liabilities & Equities
20X7
$ 49,000
51,000
72,000
370,000
$542,000
December 31
20X8
Balance in investment account
$ 79,000
91,000
102,000
350,000
$622,000
20X9
$ 99,000
121,000
162,000
330,000
$712,000
$ 77,000 $127,000 $167,000
105,000
105,000
105,000
155,000
155,000
155,000
205,000
235,000
285,000
$542,000
$622,000
$712,000
Split paid dividends of $22,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and…
Johannes Inc. acquired 80 percent of Corner Brook Ltd. common shares on January 1, Year 4, for $744,000. At that date, the fair value
of the non-controlling Interest was $186,000. Corner Brook's balance sheet contained the following amounts at the time of the
combination:
Cash
Accounts Receivable
Inventory
Construction Work in Progress
Other Assets (net)
Total Assets
66,000
140,000
40,000
Accounts Payable
$ 106,000
Bonds Payable
610,000
950,000
Common Shares ($10 par value)
Retained Earnings
400,000
530,000
450,000
$1,646,000
$ 1,646,000 Total Liabilities & Equities
During each of the next three years, Corner Brook reported net income of $120,000 and paid dividends of $60,000. On January 1, Year
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Professor 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…
Chapter 5 Solutions
ADV.FIN.ACCT. CONNECT+PROCTORIO PLUS
Ch. 5 - Where is the balance assigned to the...Ch. 5 - Why must a noncontrolling interest be reported in...Ch. 5 - Prob. 5.3QCh. 5 - Prob. 5.4QCh. 5 - Prob. 5.5QCh. 5 - Prob. 5.6QCh. 5 - Prob. 5.7QCh. 5 - Prob. 5.8QCh. 5 - Prob. 5.9QCh. 5 - Prob. 5.10Q
Ch. 5 - Under what Circumstances would a parent company...Ch. 5 - Prob. 5.12QCh. 5 - Prob. 5.13QCh. 5 - Prob. 5.14AQCh. 5 - Prob. 5.15AQCh. 5 - Consolidation Worksheet Preparation The newest...Ch. 5 - Prob. 5.2CCh. 5 - Prob. 5.3CCh. 5 - Prob. 5.4CCh. 5 - Prob. 5.5CCh. 5 - Prob. 5.1.1ECh. 5 - Prob. 5.1.2ECh. 5 - Prob. 5.1.3ECh. 5 - Prob. 5.1.4ECh. 5 - Prob. 5.2.1ECh. 5 - Prob. 5.2.2ECh. 5 - Prob. 5.2.3ECh. 5 - Prob. 5.2.4ECh. 5 - Prob. 5.2.5ECh. 5 - Prob. 5.3ECh. 5 - Prob. 5.4ECh. 5 - Balance Sheet Worksheet Problem Company owns 90...Ch. 5 - Prob. 5.6ECh. 5 - Prob. 5.7ECh. 5 - Prob. 5.8.1ECh. 5 - Prob. 5.8.2ECh. 5 - Prob. 5.8.3ECh. 5 - Prob. 5.8.4ECh. 5 - Prob. 5.8.5ECh. 5 - Prob. 5.8.6ECh. 5 - Prob. 5.8.7ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10ECh. 5 - Prob. 5.11ECh. 5 - Prob. 5.12ECh. 5 - Prob. 5.13ECh. 5 - Prob. 5.14ECh. 5 - Prob. 5.15ECh. 5 - Prob. 5.16ECh. 5 - Prob. 5.17AECh. 5 - Prob. 5.18AECh. 5 - Prob. 5.19PCh. 5 - Prob. 5.20PCh. 5 - Prob. 5.21.1PCh. 5 - Multiple-Choice Questions on Applying the Equity...Ch. 5 - Prob. 5.21.3PCh. 5 - Prob. 5.21.4PCh. 5 - Prob. 5.22PCh. 5 - Computation of Account Balances Pencil Company...Ch. 5 - Prob. 5.24PCh. 5 - Equity Entries with Differential On January 1,...Ch. 5 - Equity Entries with Differential Plug Corporation...Ch. 5 - Prob. 5.27PCh. 5 - Prob. 5.28PCh. 5 - Prob. 5.29P
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