ADVANCED FIN. ACCT. LL W/ACCESS>CUSTOM<
ADVANCED FIN. ACCT. LL W/ACCESS>CUSTOM<
12th Edition
ISBN: 9781265074623
Author: Christensen
Publisher: MCG CUSTOM
bartleby

Concept explainers

Question
Book Icon
Chapter 9, Problem 9.4C

a

To determine

Introduction: When a parent sells subsidiary shares, a gain or loss normally occurs and is recorded on the seller’s books, which needed to be recognized in consolidated net income. Under ASE 810, changes in a parent’s ownership interest in a subsidiary while the parent retains control require an adjustment to the amount assigned to the non-controlling interest to reflect its change in ownership in the subsidiary. Any difference in fair value of the controlling interest results in an adjustment to the stockholders’ equity attributable to the controlling interest, through an adjustment to additional paid-in capital.

The effect of sales of MT shares to BM Company on consolidated statements of HM, if BM is an unrelated company.

b

To determine

Introduction: When a parent sells subsidiary shares, a gain or loss normally occurs and is recorded on the seller’s books, which needed to be recognized in consolidated net income. Under ASE 810, changes in a parent’s ownership interest in a subsidiary while the parent retains control require an adjustment to the amount assigned to the non-controlling interest to reflect its change in ownership in the subsidiary. Any difference in fair value of the controlling interest results in an adjustment to the stockholders’ equity attributable to the controlling interest, through an adjustment to additional paid-in capital.

The effect of sales of MT shares to BM Company on consolidated statements of HM, if HM holds 60 percent of BM’s voting shares.

Blurred answer
Students have asked these similar questions
Answer
Kevin Rogers and Kelly Simmons started Book Haven as a corporation, each contributing $55,000 in cash to start the business and receiving 5,000 shares of stock. At the end of the first year of operations on December 31, 2023, the following financial details were recorded: cash on hand and in the bank was $50,300, amounts due from customers for book sales totaled $32,400, and equipment was valued at $54,000. The company owed $10,000 to publishers for books purchased, and there was a one-year note payable to the bank for $6,100. No dividends were declared or paid during the year. Using the retained earnings equation with an opening balance of $0, calculate the net income for the year ending December 31, 2023.
Provide Answer
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning