Accounting: What the Numbers Mean
Accounting: What the Numbers Mean
12th Edition
ISBN: 9781308841380
Author: David H. Marshall, Wayne W. McManus, Daniel F. Viele
Publisher: McGraw Hill
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Chapter 9, Problem 9.20P
To determine

Concept Introduction:

Operating income: Operating income or operating profit refers to the income earned by the company from its primary business activities before the payment of taxes and interests.

Requirement 1a:

To calculate:

The operating income for Spenser Co. for the year ended December 31, 2016.

To determine

Concept Introduction:

Net income: The net profit or income earned by the company after meeting all its expenses and allowable deductions refers to the net income. It is the difference between the total revenue and total expenses during the same accounting period.

Requirement 1b:

To calculate:

The net income of Spenser Co. for the year end December 31, 2016.

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Consolidation after Several Years  On January 1, 2016, Adams Corporation acquired all of the stock of Baker Company. The fair value of Adams’ shares used in the exchange was $37,500,000. At the time of acquisition, the book value of Baker’s shareholders’ equity was $5,000,000, and the book value of Baker’s building (25-year life) exceeded its fair value by $1,000,000. From the date of acquisition to December 31, 2021, Baker had cumulative net income of $1,300,000. For 2022, Baker reported net income of $300,000. Adams uses the complete equity method to account for its investment in Baker. There is no goodwill impairment loss for the period 2016 through 2021, but there is impairment loss of $100,000 in 2022. Baker declared no dividends during the period 2016–2022.  Required  Prepare the working paper eliminating entries necessary to consolidate the financial statements of Adams and Baker at December 31, 2022. Enter numerical answers using all zeros (do not abbreviate in thousands or in…
Give me the answer in a clear organized table please. Thank you!
Give me the answer in a clear organized table please. Thank you!
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