Concept explainers
aconsolidated net income
Multilevel ownership and control:if a company establish multiple corporate levels through which they carryout diversified operations, i.e. a company may have a number of subsidiaries one of which is a retailer. When consolidated statements are prepared, they include companies in which the parent has only indirect investment along with direct ownership. The complexity of consolidation process increases as additional ownership levels are included. The amount of income and net assets assigned to controlling and non-controlling interest, and unrealized
Requirement 1
The consolidated net income reported by G for 20X6.
bIncome assigned to non-controlling interest in the year 20X6.
Multilevel ownership and control:if a company establish multiple corporate levels through which they carryout diversified operations, i.e. a company may have a number of subsidiaries one of which is a retailer. When consolidated statements are prepared, they include companies in which the parent has only indirect investment along with direct ownership. The complexity of consolidation process increases as additional ownership levels are included. The amount of income and net assets assigned to controlling and non-controlling interest, and unrealized profit and losses to be eliminated, must be determined at each level of ownership.
Requirement 2
The amount of income assigned to non-controlling interest in 20X6.
cincome assigned to controlling interest
Multilevel ownership and control:if a company establish multiple corporate levels through which they carryout diversified operations, i.e. a company may have a number of subsidiaries one of which is a retailer. When consolidated statements are prepared, they include companies in which the parent has only indirect investment along with direct ownership. The complexity of consolidation process increases as additional ownership levels are included. The amount of income and net assets assigned to controlling and non-controlling interest, and unrealized profit and losses to be eliminated, must be determined at each level of ownership.
Requirement 3
The income assigned to controlling interest for 20X6.
damount of dividends reported in consolidated retained earnings
Multilevel ownership and control:if a company establish multiple corporate levels through which they carryout diversified operations, i.e. a company may have a number of subsidiaries one of which is a retailer. When consolidated statements are prepared, they include companies in which the parent has only indirect investment along with direct ownership. The complexity of consolidation process increases as additional ownership levels are included. The amount of income and net assets assigned to controlling and non-controlling interest, and unrealized profit and losses to be eliminated, must be determined at each level of ownership.
Requirement 4
The amount to be reported as dividends declared by G in consolidated
Want to see the full answer?
Check out a sample textbook solution
Chapter 9 Solutions
LOOSE-LEAF Advanced Financial Accounting with Connect
- Vishuarrow_forwardPoppy Corporation owns 60 percent of Seed Company's common shares. Balance sheet data for the companies on December 31, 20X2, are as follows: Assets Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Investment in Seed Company Stock Total Assets Liabilities and Owners' Equity Accounts Payable Bonds Payable Common Stock ($10 par value) Retained Earnings Total Liabilities and Owners' Equity Poppy Corporation Basic earnings per share Diluted earnings per share $ 94,000 $ 35,000 83,000 57,000 117,000 100,000 92,000 (77,000) $ 487,000 690,000 (225,000) 135,000 $ 894,000 Seed Company $ 62,000 $ 119,000 250,000 200,000 300,000 100,000 225,000 125,000 $ 894,000 $ 487,000 The bonds of Poppy Corporation and Seed Company pay annual interest of 8 percent and 10 percent, respectively. Poppy's bonds are not convertible. Seed's bonds can be converted into 10,000 shares of its company stock any time after January 1, 20X1. An income tax rate of 40 percent is…arrow_forwardNonearrow_forward
- Poppy Corporation owns 60 percent of Seed Company’s common shares. Balance sheet data for the companies on December 31, 20X2, are as follows: PoppyCorporation SeedCompany Assets Cash $ 86,000 $ 31,000 Accounts Receivable 83,000 53,000 Inventory 114,000 91,000 Buildings and Equipment 680,000 350,000 Less: Accumulated Depreciation (210,000 ) (80,000 ) Investment in Seed Company Stock 138,000 Total Assets $ 891,000 $ 445,000 Liabilities and Owners’ Equity Accounts Payable $ 121,000 $ 15,000 Bonds Payable 250,000 200,000 Common Stock ($10 par value) 300,000 100,000 Retained Earnings 220,000 130,000 Total Liabilities and Owners’ Equity $ 891,000 $ 445,000 The bonds of Poppy Corporation and Seed Company pay annual interest of 8 percent and 10…arrow_forwardPagle Corporation holds 80 percent of Standard Company's common shares. The companies report the following balance sheet data for December 31, 20X1: Assets Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Investment in Standard Company Stock Total Assets Liabilities and Owners' Equity Accounts Payable Taxes Payable Preferred Stock ($10 par value) Common Stock: $10 par value $5 par value Retained Earnings Total Liabilities and Owners' Equity Pagle Corporation $ 53,000 85,000 126,000 700,000 (295,000) 160,000 $ 829,000 Basic earnings per share Diluted earnings per share $ 120,000 79,000 200,000 100,000 330,000 $ 829,000 Required: Compute basic and diluted EPS for the consolidated entity for 20X1. Note: Round your answers to 2 decimal places. Standard Company $ 43,000 65,000 76,000 330,000 (130,000) $ 384,000 $ 84,000 100,000 An 8 percent annual dividend is paid on the Pagle preferred stock and a 12 percent dividend is paid on the Standard…arrow_forwardCompute the Dividend Income for the year.arrow_forward
- Plug Corporation holds 80 percent of Socket Company's common stock. The following balance sheet data are presented for December 31, 20X7: Assets Cash Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Investment in Socket Company Total Assets Liabilities and Equities Accounts Payable Bonds Payable Preferred Stock ($100 par value) Common Stock ($10 par value) Retained Earnings Total Liabilities and Equities Plug Corporation $ 100,000 150,000 300,000 100,000 2,250,000 Basic earnings per share Diluted earnings per share (850,000) 600,000 $2,650,000 $ 200,000 800,000 1,000,000 650,000 $2,650,000 $ Socket Company 90,000 220,000 300,000 290,000 900,000 (250,000) $1,550,000 $ 100,000 500,000 200,000 400,000 350,000 $1,550,000 Socket reported net income of $115,000 in 20X7 and paid dividends of $60,000. Its bonds have an annual interest rate of 8 percent and are convertible into 30,000 common shares. Its preferred shares pay an 11 percent annual dividend…arrow_forwardCalculate share of profit of the members of the parent entity and of minority interests if Alpha Ltd acquired 80% of the shares in X Ltd and 70% of the shares in Y Ltd. The profits recovered by each of the companies of the current year are as follows Net Profit for the current year(m) Alpha Ltd 100 X Ltd 40 Y Ltd -10 A.Profit for members of parent entity is $125m and profit for minority interest is $15m. B. Profit for members of parent entity is $100m and profit for minority interest interest is $30m. C. Profit for members of parent entity is $125m and profit for minority interest is $25m. D. Profit for members of parent entity is $130m and profit for minority interest is $0. E. None of the options provided. 2.The individual discount model is considered amongst analysts as most appropriate for share valuation under which of the following situations: A.When valuing shares from the perspective of a small shareholder and…arrow_forwardardner Corp. owns 80% of the voting common stock of Lockhart Co. Lockhart owns 70% of Canning Co. Gardner and Lockhart both use the initial value method to account for their investments. The following information is available from the financial statements and records of the three companies: GardnerCorp. LockhartCo. CanningCo. Separate company net income before investment income $900,000 $650,000 $150,000 Dividend income from investment in subsidiary 250,000 120,000 Deferral of intra-entity gains 110,000 80,000 20,000 Amortization expense related to excess fair value over book value of investment 40,000 25,000 Separate company net income includes intra-entity gains before the consolidating deferral but does not include dividend income from investment in subsidiary. The accrual-based net income of Gardner Corp. is calculated to bearrow_forward
- Required: Compute basic and diluted EPS for the consolidated entity for 20X7. (Round your intermediate calculations and final answers to two decimal places.) Basic earnings per share Diluted earnings per share.arrow_forwardConsidering the intercompany transactions, compute for the non-controlling interest in net income.arrow_forwardNonearrow_forward
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education