ADV.FIN.ACCT. CONNECT+PROCTORIO PLUS
ADV.FIN.ACCT. CONNECT+PROCTORIO PLUS
12th Edition
ISBN: 9781266379017
Author: Christensen
Publisher: INTER MCG
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Chapter 9, Problem 9.26P
To determine

Sale of subsidiary sales by parent:when parent sales share of subsidiary, parent has to recognize a gain or loss on the difference between selling price and the change in the carrying amount of its investment. Form consolidation viewpoint, when subsidiary reacquires its share from parent, the transaction represents an internal transfer and does not give rise to a gain or loss.

Because the gain or loss will be eliminated in consolidation process, a better approach is for the parent to adjust additional paid-in capital rather than record gain or loss on the transaction.

The consolidation entry needed to complete consolidated balance sheet immediately following the issue of additional shares to L.

To determine

Sale of subsidiary sales by parent: when parent sales share of subsidiary, parent has to recognize a gain or loss on the difference between selling price and the change in the carrying amount of its investment. Form consolidation viewpoint, when subsidiary reacquires its share from parent, the transaction represents an internal transfer and does not give rise to a gain or loss.

Because the gain or loss will be eliminated in consolidation process, a better approach is for the parent to adjust additional paid-in capital rather than record gain or loss on the transaction.

The preparation of consolidated balance sheet worksheet.

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