EBK ADVANCED FINANCIAL ACCOUNTING
12th Edition
ISBN: 9781260165104
Author: Christensen
Publisher: YUZU
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Chapter 5, Problem 5.2.5E
To determine
Concept Introduction:
Equity Method of valuation of investment: In this method, the parent company value investment on the historical cost of the investment plus apportioned profit in the associate company less dividend paid by the associate company. Difference in the historical value and the amount paid for investment is debited to
To choose: The correct option.
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On January 1, 2010 Hand acquires 100% of Finger in a statutory merger. At acquisition date the following were the book values and fair values of fixed assets of these two companies:
Book Value. Fair Value
Hand 900,000 800,000
Finger 200,000 300,000
a. What is consolidated fixed assets under the acquisition method
b. What is consolidated fixed assets under the purchase method
c.What is consolidated fixed assets under the pooling of interests method
thank you
Compute for the Consolidated Total Asset.
Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying book value. At the date of acquisition, the fair value of the noncontrolling interest was equal to 25 percent of Saul’s book value. The balance sheets of the two companies for January 1, 20X1, are as follows:
On January 2, 20X1, Penny purchased an additional 2,500 shares of common stock directly from Saul for $150,000. Required:a. Prepare the consolidation entry needed to complete a consolidated balance sheet worksheet immediately following the issuance of additional shares to Penny.
b. Prepare a consolidated balance sheet worksheet immediately following the issuance of additional shares to Penny.
Chapter 5 Solutions
EBK ADVANCED FINANCIAL ACCOUNTING
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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Similar questions
- for required b have to prepare consolidation for entries G S A I D E TI G *arrow_forwardIn a qualifying reorganization, Cato Corporation exchanges $8,005,000 worth of stock and property valued at $3,202,000 ($1,601,000 basis) for all of Firestar Corporation's assets, which have a value of $11,207,000 and a $2,241,400 basis. Firestar distributes the property received from Cato. The exchange meets all Code requirements. If an amount is zero, enter "0". a. What is Cato's recognized gain/loss from the reorganization? Cato recognizes a gain of $ b. What is Firestar's recognized gain/loss from the reorganization? Firestar recognizes no gain or loss of $arrow_forward101.arrow_forward
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- For each of the following independent intra-group transaction scenarios, assume that the consolidation process is done on 31 December 2020. Required: (a) Prepare the necessary consolidation journal entries in each scenario. Preston Ltd owns 80% share capital of Sutherland Ltd. The tax rate is 30%. (narrations are not required). Scenario 3: On 1 July 2018, Preston Ltd sold an item of machinery to Sutherland Ltd for $900,000. Preston Ltd originally purchased the machinery for $1,600,000 on 1 January 2016. The original estimated useful life was 5 years but at the time of the sale the remaining useful life was estimated to be 4 years by Sutherland Ltd. The expected residual value of the machinery is estimated to be $nil by Sutherland Ltd. ANSWER HERE: Date Account Name Debit Creditarrow_forwardAfter the business combination on the basis of full-goodwill approach, what amount of stockholders' equity will be reported? a. P355,000 b. P397,000 c. P419,500 d. P495,000arrow_forwardMidStrata Corporation acquired 75% of the voting shares of Atoom Company on January 1, 20X1. The fair value ofthe non-controlling interest at acquisition was equal to its proportionate share of the fair value of the net assets ofAtoom. The full amount of the differential at acquisition was attributable to buildings and equipment, which had aremaining useful life of eight years. Financial statement data for the two companies and the consolidated entity atDecember 31, 20X6, are as follows:MIDSTRATA CORPORATION AND ATOOM COMPANYBalance Sheet DataDecember 31, 20X6Item MidStrata Corporation Atoom Company Consolidated EntityCash $ 67,000 $ 45,000 $ 112,000Account Receivable ? 55,000 145,000Inventory 125,000 90,000 211,000Buildings & Equipment 400,000 240,000 680,000Less: Accumulated Depreciation (180,000) (110,000) (?)Investment in Atoom Company ?Total Assets $ ? $320,000 $Accounts Payable $ 86,000 $ 20,000 $ 89,000Other Payables ? 8,000 ?Notes Payable 250,000 120,000 370,000Common Stock…arrow_forward
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