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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Please provide the solution to this general accounting question using proper accounting principles.

Trevino Manufacturing Company produces custom jackets. Each jacket (unit) requires 3.5 yards of material. Selected data from Trevino's master budget for next quarter are shown below: Each unit requires 2.4 hours of direct labor, and the average hourly cost of Trevino's direct labor is $14.50. What is the cost of Trevino Manufacturing Company's direct labor in November if they produce 8,200 jackets?

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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