Sale of shares subsidiary’s to non-affiliate:when subsidiary sells shares to a party outside the economic entity, it increases total
The amount assigned to non-controlling interest and controlling interest is also affected by two factors 1. The number of shares sold to non-affiliates and 2. The price at which the shares are sold to non-affiliates.
Computation of change in the book value of shares held by P as a result of S issuance of additional shares.
Sale of shares subsidiary’s to non-affiliate: when subsidiary sells shares to a party outside the economic entity, it increases total stockholders’ equity of the consolidated entity by the amount received by the subsidiary from sale. The sale increases the subsidiary’s total shares outstanding and reduces the percentage ownership held by the parent company.
The amount assigned to non-controlling interest and controlling interest is also affected by two factors 1. The number of shares sold to non-affiliates and 2. The price at which the shares are sold to non-affiliates.
The entry to be recorded by P advertising to recognize the change in book value of the shares held.
a. Consolidation entries
Sale of shares subsidiary’s to non-affiliate: when subsidiary sells shares to a party outside the economic entity, it increases total stockholders’ equity of the consolidated entity by the amount received by the subsidiary from sale. The sale increases the subsidiary’s total shares outstanding and reduces the percentage ownership held by the parent company.
The amount assigned to non-controlling interest and controlling interest is also affected by two factors 1. The number of shares sold to non-affiliates and 2. The price at which the shares are sold to non-affiliates.
The preparation of consolidation entries immediately following the issuance of additional shares
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Chapter 9 Solutions
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Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning