Advanced Accounting - Standalone book
12th Edition
ISBN: 9780077862220
Author: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 6, Problem 3DYS
The FASB ASC Subtopic “Variable Interest Entities” affects thousands of business enterprises that now, as primary beneficiaries, consolidate entities that qualify as controlled VIEs. Retrieve the annual reports of one or more of the following companies (or any others you may find) that consolidate VIEs:
- The Walt Disney Company.
- General Electric.
- Allegheny Energy.
Required
Write a brief report that describes
- 1. The reasons for consolidation of the company’s VIE(s).
- 2. The effect of the consolidation of the VIE(s) on the company’s financial statements.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Give me correct answer with explanation.j
please explain your answer
Make all elimination journal entries to facilitate the consolidation.
Chapter 6 Solutions
Advanced Accounting - Standalone book
Ch. 6 - Prob. 1QCh. 6 - Prob. 2QCh. 6 - When is a firm required to consolidate the...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - How do noncontrolling interest balances affect the...Ch. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Prob. 17QCh. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Prob. 7PCh. 6 - Bens man Corporation is computing EPS. One of its...Ch. 6 - Prob. 9PCh. 6 - Prob. 10PCh. 6 - Prob. 11PCh. 6 - Prob. 12PCh. 6 - Prob. 13PCh. 6 - Prob. 14PCh. 6 - Prob. 15PCh. 6 - On January 1, Coldwater Company has a net book...Ch. 6 - Prob. 17PCh. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 20PCh. 6 - Prob. 21PCh. 6 - Prob. 22PCh. 6 - Prob. 23PCh. 6 - Prob. 24PCh. 6 - Prob. 25PCh. 6 - Prob. 26PCh. 6 - Prob. 27PCh. 6 - Prob. 28PCh. 6 - Prob. 29PCh. 6 - Prob. 30PCh. 6 - Prob. 31PCh. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - Prob. 35PCh. 6 - Prob. 36PCh. 6 - Prob. 37PCh. 6 - Prob. 38PCh. 6 - Prob. 39PCh. 6 - Prob. 40PCh. 6 - Prob. 41PCh. 6 - Prob. 42PCh. 6 - Prob. 43PCh. 6 - Prob. 44PCh. 6 - Prob. 45PCh. 6 - Prob. 46PCh. 6 - Prob. 47PCh. 6 - Prob. 48PCh. 6 - Prob. 1DYSCh. 6 - Prob. 2DYSCh. 6 - The FASB ASC Subtopic Variable Interest Entities...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The problem below is an example of a question of the CPA ‘‘Other Objective Format’’ type as it was applied to the consolidations area. A mark-sensing answer sheet was used on the exam. You may just supply the answer, which should be accompanied by calculations where appropriate. Presented below are selected amounts from the separate unconsolidated financial statements of Pero Corporation and its 90%-owned subsidiary Sean Company at December 31, 2016. Additional information follows:Additional information is as follows:1. On January 2, 2016, Pero purchased 90% of Sean’s 100,000 outstanding common stock for cash of $175,000. On that date, Sean’s stockholders’ equity equaled $150,000, and the fair values of Sean’s assets and liabilities equaled their carrying amounts. Any remaining excess is considered to be goodwill.2. On September 4, 2016, Sean paid cash dividends of $30,000.3. On December 31, 2016, Pero recorded its equity in Sean’s earnings.1. Items (a) through (c) below represent…arrow_forwardN3. Accountarrow_forwardPLEASE SOLVE PART Earrow_forward
- b. Prepare all consolidation entries needed to prepare consolidated statements for 20X5. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.a. Prepare all journal entries that Pizza recorded during 20×5 related to its investment in Slice. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction listPizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $151,000. On that date, the fair value of the noncontrolling interest was $37,750, and Slice reported retained earnings of $46,000 and had $95,000 of common stock outstanding Pizza has used the equity method in accounting for its investment in Slice. Trial balance data for the two companies on December 31, 20X5, are as follows: Item Pizza Corporation Slice Products Company Debit Credit Debit Credit Cash and Receivables $ 86,000 $ 67,000 Inventory 277,000…arrow_forwardN3. Preparing the [I] consolidation entries for sale of land Assume that during 2015 a wholly owned subsidiary sells land that originally cost $540,000 to its parent for a sale price of $600,000. The parent holds the land until it sells the land to an unaffiliated company on December 31, 2019. The parent uses the equity method of pre-consolidation bookkeeping.arrow_forward1 On January 1, 2021, Access IT Company exchanged $880,000 for 40 percent of the outstanding voting stock of Net Connect. Especially attractive to Access IT was a research project underway at Net Connect that would enhance both the speed and quantity of client-accessible data. Although not recorded in Net Connect's financial records, the fair value of the research project was considered to be $1,840,000. 01:58:38 In contractual agreements with the sole owner of the remaining 60 percent of Net Connect, Access IT was granted (1) various decision- making rights over Net Connect's operating decisions and (2) special service purchase provisions at below-market rates. As a result of these contractual agreements, Access IT established itself as the primary beneficiary of Net Connect. Immediately after the purchase, Access IT and Net Connect presented the following balance sheets: (Note: Parentheses indicate credit balances.) Cash Investment in Net Connect Capitalized software Computer…arrow_forward
- 1. what is the basis for consolidation?2. is goodwill being remeasured to fair value at each reporting period? if false, what is the correct answer?3.a. Before consolidation, entity A's retained is how much? 3.b.he consolidated earning is how much?this is the scenario for #3a and b:entity A acquired 90% interest in ENtity B on January 1, 20x1 when entity B's net assets had a fair value of 100. On December 31, 20x2, Entity B's net assets increased to 200 after adjustments for acquisition date fair values, net of depreciation.arrow_forwardGive at least 3 examples of businesses who had undergone merger or consolidation. It can be international or local. a. Discuss the nature of the consolidation. b. What do you think are the reasons or objectives for the mergarrow_forward1) Shrimp Boat Company decides to consolidate its operations with Trawlers, Inc., to form Unique Fishers Corporation (UFC). Trawlers had rights in certain property. After the consolidation, UFC acquires the rights: A.automatically. B.only after completing certain additional statutory procedures. C.only if Trawlers' former shareholders expressly approve. D.only if the acquisition is a specified result of the consolidation. 2) Jake is the maker of a $2,000 promissory note payable to Kim. Kim indorses the note to Lou who, in turn, indorses it to Mona, who then indorses it to Nat, the present holder. Nat properly presents the note to Jake for payment, but Jake dishonors it. With timely notice to the proper parties, Nat may collect payment on the note from Kim, Lou, or Mona. Kim or Lou only. Mona only. no one.arrow_forward
- In an asset acquisition: a. A consolidation must be prepared whenever financial statements are issued. b. The acquiring company deals only with existing shareholders, not the company itself. c. The assets and liabilities are recorded by the acquiring company at their book values. d. Statements for the single combined entity are produced automatically and no consolidation process is needed.arrow_forwardWhen we are preparing consolidated financial statements, will we have to eliminate the parent entity's investment in the subsidiaries each year as part of our consolidation entries, or will we have to do the elimination only in the first year following acquisition, but only thereafter? Why?arrow_forwardOutlook Inc. merges with Pinnacle Inc. Only Pinnacle remains. Refer to Fact Pattern 31-1. Outlook held rights in certain real property. With regard to these assets, in the merger Pinnacle assumes a. all of Outlook’s assets. b. an amount of assets equal to the ratio of the firms’ pre-merger market values. c. none of Outlook’s assets. d. only those assets acquired after the merger was proposed.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Current assets and current liabilities; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Jw4TaiP42P4;License: Standard youtube license