Subsidiary’s purchase of shares from non-affiliate: some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available. Although the parent may not participate directly when subsidiary purchases treasury stock , the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements. Requirement 1 Computation of change in the book value of parent’s equity as a result of repurchase of shares by Q Manufacturing.

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Answer 1

Question

Chapter 9, Problem 9.15E

a. Calculate change in book value of parent equity as a result of repurchase

To determine

Subsidiary’s purchase of shares from non-affiliate:some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 1

Computation of change in the book value of parent’s equity as a result of repurchase of shares by Q Manufacturing.

b. Journal entry to recognize the change in equity book value

To determine

Subsidiary’s purchase of shares from non-affiliate: some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 2

The entry to be recorded by B advertising to recognize the change in book value of the shares held.

c. Consolidation entries

To determine

Subsidiary’s purchase of shares from non-affiliate: some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 3

The preparation of consolidation entries immediately following the purchase of shares by Q

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Answer 2

Question

Chapter 9, Problem 9.15E

a. Calculate change in book value of parent equity as a result of repurchase

To determine

Subsidiary’s purchase of shares from non-affiliate:some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 1

Computation of change in the book value of parent’s equity as a result of repurchase of shares by Q Manufacturing.

b. Journal entry to recognize the change in equity book value

To determine

Subsidiary’s purchase of shares from non-affiliate: some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 2

The entry to be recorded by B advertising to recognize the change in book value of the shares held.

c. Consolidation entries

To determine

Subsidiary’s purchase of shares from non-affiliate: some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 3

The preparation of consolidation entries immediately following the purchase of shares by Q

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Answer 3

Question

Chapter 9, Problem 9.15E

a. Calculate change in book value of parent equity as a result of repurchase

To determine

Subsidiary’s purchase of shares from non-affiliate:some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 1

Computation of change in the book value of parent’s equity as a result of repurchase of shares by Q Manufacturing.

b. Journal entry to recognize the change in equity book value

To determine

Subsidiary’s purchase of shares from non-affiliate: some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 2

The entry to be recorded by B advertising to recognize the change in book value of the shares held.

c. Consolidation entries

To determine

Subsidiary’s purchase of shares from non-affiliate: some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 3

The preparation of consolidation entries immediately following the purchase of shares by Q

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Answer 4

Question

Chapter 9, Problem 9.15E

a. Calculate change in book value of parent equity as a result of repurchase

To determine

Subsidiary’s purchase of shares from non-affiliate:some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 1

Computation of change in the book value of parent’s equity as a result of repurchase of shares by Q Manufacturing.

b. Journal entry to recognize the change in equity book value

To determine

Subsidiary’s purchase of shares from non-affiliate: some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 2

The entry to be recorded by B advertising to recognize the change in book value of the shares held.

c. Consolidation entries

To determine

Subsidiary’s purchase of shares from non-affiliate: some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 3

The preparation of consolidation entries immediately following the purchase of shares by Q

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Answer 5

Chapter 9, Problem 9.15E

a. Calculate change in book value of parent equity as a result of repurchase

To determine

Subsidiary’s purchase of shares from non-affiliate:some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 1

Computation of change in the book value of parent’s equity as a result of repurchase of shares by Q Manufacturing.

b. Journal entry to recognize the change in equity book value

To determine

Subsidiary’s purchase of shares from non-affiliate: some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 2

The entry to be recorded by B advertising to recognize the change in book value of the shares held.

c. Consolidation entries

To determine

Subsidiary’s purchase of shares from non-affiliate: some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 3

The preparation of consolidation entries immediately following the purchase of shares by Q

Answer 6

Chapter 9, Problem 9.15E

a. Calculate change in book value of parent equity as a result of repurchase

To determine

Subsidiary’s purchase of shares from non-affiliate:some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 1

Computation of change in the book value of parent’s equity as a result of repurchase of shares by Q Manufacturing.

Answer 7

Chapter 9, Problem 9.15E

a. Calculate change in book value of parent equity as a result of repurchase

To determine

Subsidiary’s purchase of shares from non-affiliate:some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 1

Computation of change in the book value of parent’s equity as a result of repurchase of shares by Q Manufacturing.

Answer 8

b. Journal entry to recognize the change in equity book value

To determine

Subsidiary’s purchase of shares from non-affiliate: some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 2

The entry to be recorded by B advertising to recognize the change in book value of the shares held.

Answer 9

b. Journal entry to recognize the change in equity book value

To determine

Subsidiary’s purchase of shares from non-affiliate: some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 2

The entry to be recorded by B advertising to recognize the change in book value of the shares held.

Answer 10

c. Consolidation entries

To determine

Subsidiary’s purchase of shares from non-affiliate: some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 3

The preparation of consolidation entries immediately following the purchase of shares by Q

Answer 11

c. Consolidation entries

To determine

Subsidiary’s purchase of shares from non-affiliate: some time subsidiary purchases treasury shares form non-controlling shareholders. The parent company may prefer not to be concerned with outside shareholders and may direct the subsidiary to reacquire any non-controlling shares that become available.

Although the parent may not participate directly when subsidiary purchases treasury stock, the parent’s equity in the net assets of the subsidiary may change as a result of the transaction. The change must be recognized in preparing the consolidated statements.

Requirement 3

The preparation of consolidation entries immediately following the purchase of shares by Q

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 9 - Prob. 9.1Q Ch. 9 - Prob. 9.2Q Ch. 9 - Prob. 9.3Q Ch. 9 - Prob. 9.4Q Ch. 9 - Prob. 9.5Q Ch. 9 - Prob. 9.6Q Ch. 9 - Prob. 9.7Q Ch. 9 - Prob. 9.8Q Ch. 9 - Prob. 9.9Q Ch. 9 - Prob. 9.10Q

Solution Summary: The author calculates the change in the book value of parent equity as a result of repurchase of shares by Q Manufacturing.

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