EBK ADVANCED FINANCIAL ACCOUNTING
12th Edition
ISBN: 9781260165104
Author: Christensen
Publisher: YUZU
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Chapter 9, Problem 9.14Q
To determine
Concept Introduction:
Intercompany transactions refer to the transactions between the companies which have subsidiary and parent relationship. These transactions are identified and adjusted at the time of the consolidation of the parent company and subsidiary company accounts.
To indicate:The effect of the subsidiary’s 15% stock dividend on the consolidated financial statement.
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03) Which of the following journal entry formats is appropriate under the equity method of accounting to
record the parent company's share of a subsidiary's dividend declaration?
Select one:
1
O b. ll
Oc. III
Od. IV
1.
Intercompany Dividends Receivables
Investment in Subsidiary Common Stock
Cash
Intercompany Dividend Revenue
Intercompany Dividends Receivable
intercompany Dividends Revenue
Investment on Subsidiary Common Stock
Intercompany Dividend Revenue
How should preferred stock of a subsidiary be shown in a consolidated balance sheet in each case?
a. If it is held 100 percent by the parent.
b. If it is held 50 percent by the parent and 50 percent by outside interests
c. If it is held 100 percent by outside interests.
In consolidated financial statements, it is expected that:
A. Retained earnings equals to the sum of controlling interest separate retained earnings and non-controlling interest separate retained earnings.
B. Ordinary share equals to the sum of parent’s ordinary share and subsidiary’s ordinary share.
C. Net income equals to the sum of the income distributed to the controlling interest and distributed to non-controlling interest.
D. Dividends declared equals the sum of the total parent company’s declared dividends and the total subsidiary’s declared dividends.
Chapter 9 Solutions
EBK ADVANCED FINANCIAL ACCOUNTING
Ch. 9 - Prob. 9.1QCh. 9 - Prob. 9.2QCh. 9 - Prob. 9.3QCh. 9 - Prob. 9.4QCh. 9 - Prob. 9.5QCh. 9 - Prob. 9.6QCh. 9 - Prob. 9.7QCh. 9 - Prob. 9.8QCh. 9 - Prob. 9.9QCh. 9 - Prob. 9.10Q
Ch. 9 - Prob. 9.11QCh. 9 - Prob. 9.12QCh. 9 - Prob. 9.13QCh. 9 - Prob. 9.14QCh. 9 - Prob. 9.15QCh. 9 - Prob. 9.16QCh. 9 - Prob. 9.1CCh. 9 - Prob. 9.2CCh. 9 - Prob. 9.3CCh. 9 - Prob. 9.4CCh. 9 - Prob. 9.5CCh. 9 - Prob. 9.1.1ECh. 9 - Prob. 9.1.2ECh. 9 - Prob. 9.1.3ECh. 9 - Prob. 9.1.4ECh. 9 - Prob. 9.2.1ECh. 9 - Prob. 9.2.2ECh. 9 - Prob. 9.2.3ECh. 9 - Prob. 9.2.4ECh. 9 - Prob. 9.2.5ECh. 9 - Prob. 9.3ECh. 9 - Prob. 9.4ECh. 9 - Prob. 9.5ECh. 9 - Prob. 9.6ECh. 9 - Prob. 9.7ECh. 9 - Prob. 9.8ECh. 9 - Prob. 9.9ECh. 9 - Prob. 9.10ECh. 9 - Prob. 9.11ECh. 9 - Subsidiary Stock Dividend Stake Company reported...Ch. 9 - Prob. 9.13ECh. 9 - Prob. 9.14ECh. 9 - Prob. 9.15ECh. 9 - Prob. 9.16ECh. 9 - Prob. 9.17.1PCh. 9 - Prob. 9.17.2PCh. 9 - Prob. 9.17.3PCh. 9 - Prob. 9.17.4PCh. 9 - Prob. 9.17.5PCh. 9 - Prob. 9.18PCh. 9 - Prob. 9.19PCh. 9 - Prob. 9.20PCh. 9 - Prob. 9.21PCh. 9 - Prob. 9.22PCh. 9 - Prob. 9.23PCh. 9 - Prob. 9.24PCh. 9 - Prob. 9.25PCh. 9 - Prob. 9.26PCh. 9 - Prob. 9.27P
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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
- Which one of the following is correct to calculate the percentage shareholding of the parent? 1. The number of shares issued by subsidiary are divided by share capital of the parent company? 2. The number of shares issued by a subsidiary are divided by the share capital of the subsidiary 3. The investment by a parent in a subsidiary are divided by the share capital of the subsidiary 4. The number of shares acquired by a parent in a subsidiary are divided by the number of shares issued by the subsidiaryarrow_forwardWhich of the following affects the total Shareholders’ Equity? Appropriation of retained earnings Declaration of a scrip dividend Declaration of share split Retirement of treasury sharesarrow_forwardThe amount attributable to every share outstanding in case a corporation is liquidated.A. book valueB. par valueC. stated valueD. Market valuearrow_forward
- What does book value per share measure? Current selling price of stock Amount shareholder would receive if assets sold for book value and the company was liquidated Net assets Total equityarrow_forwardWhat is the correct method for treating a vesting differential linked to the acquisition of shares? privileged rights of the subsidiary by the parent company? Select an answer: a. It must be allocated to identifiable net assets or goodwill. b. It must be distributed in proportion to the identifiable assets and liabilities of the subsidiary. c. It must be charged to consolidated retained earnings or credited to contributed surplus. d. It must be taken care of in the current year.arrow_forwardHow would the declaration of a 15% share dividend by a corporation affect the retained earnings and total shareholders’ equity, respectively? A. No effect; No effectB. No effect; DecreaseC. Decrease; No effectD. Decrease; Decreasearrow_forward
- Which of the following statements would best describe the numerator of the diluted earnings per share? Profit attributable to shareholders of the parent, adjusted for changes in profit or loss due to the actual conversion of anti- dilutive potential ordinary shares to ordinary shares. Profit attributable to shareholders of the parent, adjusted for changes in profit or loss due to the assumed conversion of anti-dilutive potential ordinary shares to ordinary shares. Profit attributable to shareholders of the parent, adjusted for changes in profit or loss due to the actual conversion of dilutive potential ordinary shares to ordinary shares. Profit attributable to shareholders of the parent. Profit attributable to shareholders of the parent, adjusted for changes in profit or loss due to the assumed conversion of dilutive potential ordinary shares to ordinary shares.arrow_forwardIndicate whether the following actions would (+) increase, (-) decrease, or (0) not affect Bernal Inc.'s total assets, liabilities and shareholders' equity: Shareholders' Assets Liabilities Equity Declaring a cash dividend 2. Paying the cash dividend declared in no. 1 1. 3. Declaring a share dividend Issuing share certificates for the 4. share dividend declared in no. 3 Authorizing and issuing share certificates in a share split 5.arrow_forwardWhich of the following changes the total shareholder's equity balance? Issuance of share certificates due to subscription receivable fully paid Declaration of cash dividends Issuance of share rights Declaration of large bonus issuearrow_forward
- When a subsidiary has preferred stock that is convertible into subsidiary common stock, the parent's equity in the subsidiary's diluted earnings is calculated by the number of Select one: a. subsidiary common shares held by the parent times the subsidiary's diluted EPS figure. b. parent shares into which the subsidiary's dilutive securities can be converted times the parent's basic EPS figure. c. parent shares into which the subsidiary's dilutive securities can be converted times the subsidiary's basic EPS figure. d.subsidiary shares into which the subsidiary's dilutive securities can be converted times the subsidiary's basic EPS figure.arrow_forwardHow much is the shareholder's equity?arrow_forwardThe following share dividends were declared and distributed by Wendy Corp.: Percentage of ordinary share outstanding at declaration date 10 Fair value Par value P15,000 40,000 P10,000 30,800 28 What aggregate amount should be debited to retained earnings for these share dividends?arrow_forward
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