Advanced Accounting - Standalone book
12th Edition
ISBN: 9780077632588
Author: Hoyle
Publisher: MCG
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Chapter 7, Problem 20P
Clarke has a controlling interest in Rogers’s outstanding stock. At the current year-end, the following information has been accumulated for these two companies:
| Separate Operating Income | Dividends Paid | |
| Clarke | $500,000 (includes a $90,000 net gross profit in intra-entity ending inventory) |
$90,000 |
| Rogers | 240,000 | 80,000 |
Clarke uses the initial value method to account for the investment in Rogers. The separate operating income figures just presented include neither dividend nor other investment income. The effective tax rate for both companies is 40 percent.
- a. Assume that Clarke owns 100 percent of Rogers's voting stock and is filing a consolidated tax return. What income tax amount does this affiliated group pay for the current period?
- b. Assume that Clarke owns 92 percent of Rogers’s voting stock and is filing a consolidated tax return. What amount of income taxes does this affiliated group pay for the current period?
- c. Assume that Clarke owns 80 percent of Rogers’s voting stock, but the companies elect to file separate tax returns. What is the total amount of income taxes that these two companies pay for the current period?
- d. Assume that Clarke owns 70 percent of Rogers’s voting stock, requiring separate tax returns. What is the total amount of income tax expense to be recognized in the consolidated income statement for the current period?
- e. Assume that Clarke owns 70 percent of Rogers’s voting stock so that separate tax returns are required. What amount of income taxes does Clarke have to pay for the current year?
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Problem No. 3
The business assets of Glea Yares and Eunice Alico appear below:
Yares
Alico
Cash
P
10,000
P
25,000
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245,000
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260,000
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Notes Payable
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200,000
Yare, Capital
diw 750,000
P 245,000
345,000
adi to omen
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Total
P1,128,000
1,234,000
P1,824,000
On March 5, 2025, Yares and Alico agreed to form a partnership contributing their assets and equities subject to the
following adjustments:
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a. Accounts receivable of P15,000 in Yares' books and P30,000 in Alico's are uncollectible.
b. Inventories of P5,500 and P6,500 are worthless in Yares' and Alico's respective books.
Required:
1. In the books of Yares, prepare the necessary journal entries:
a. To record the adjustments to Yares' assets
b. To close the books of Yares of viande no 251qgque oroa snemu ni
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accounting, providing relevant examples.
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accounting theory and practice. Discuss how the qualitative characteristics outlined in the
Conceptual Framework enhance financial reporting and contribute to decision-usefulness. Provide
examples to support your analysis.
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Chapter 7 Solutions
Advanced Accounting - Standalone book
Ch. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - Prob. 3QCh. 7 - How does the presence of an indirect ownership...Ch. 7 - Prob. 5QCh. 7 - In accounting for mutual ownerships, what is the...Ch. 7 - Prob. 7QCh. 7 - Prob. 8QCh. 7 - Prob. 9QCh. 7 - Prob. 10Q
Ch. 7 - Prob. 11QCh. 7 - Jones acquires Wilson, in part because the new...Ch. 7 - Prob. 13QCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Which of the following is correct for two...Ch. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Prob. 9PCh. 7 - Prob. 10PCh. 7 - Prob. 11PCh. 7 - Prob. 12PCh. 7 - Prob. 13PCh. 7 - Prob. 14PCh. 7 - Prob. 15PCh. 7 - Prob. 16PCh. 7 - Prob. 17PCh. 7 - Prob. 18PCh. 7 - Prob. 19PCh. 7 - Clarke has a controlling interest in Rogerss...Ch. 7 - Prob. 21PCh. 7 - Prob. 22PCh. 7 - Prob. 23PCh. 7 - Prob. 24PCh. 7 - Prob. 25PCh. 7 - Prob. 26PCh. 7 - Prob. 27PCh. 7 - Prob. 28PCh. 7 - Prob. 29PCh. 7 - Prob. 1DYSCh. 7 - Access The Coca-Cola Company’s 2012 financial...
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