a. Determine the December 31, 2021, consolidated balance for each of the following accounts: Depreciation Expense Dividends Declared Buildings Goodwill Common Stock Revenues Equipment b. How does the parent's choice of an accounting method for its investment affect the balances computed in requirement (a)? c. Which method of accounting for this subsidiary is the parent actually using for internal reporting purposes? d. Determine parent's investment income for 2021 under partial equity method and equity method. e. What would be Foxx's balance for retained earnings as of January 1, 2021, if each of the following methods had been in use? Initial value method. • Partial equity method. · Equity method.
a. Determine the December 31, 2021, consolidated balance for each of the following accounts: Depreciation Expense Dividends Declared Buildings Goodwill Common Stock Revenues Equipment b. How does the parent's choice of an accounting method for its investment affect the balances computed in requirement (a)? c. Which method of accounting for this subsidiary is the parent actually using for internal reporting purposes? d. Determine parent's investment income for 2021 under partial equity method and equity method. e. What would be Foxx's balance for retained earnings as of January 1, 2021, if each of the following methods had been in use? Initial value method. • Partial equity method. · Equity method.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 11P
Related questions
Question
Transcribed Image Text:a. Determine the December 31, 2021, consolidated balance for each of the following accounts:
Depreciation Expense
Dividends Declared
Buildings
Goodwill
Common Stock
Revenues
Equipment
b. How does the parent's choice of an accounting method for its investment affect the balances computed in requirement (a)?
c. Which method of accounting for this subsidiary is the parent actually using for internal reporting purposes?
d. Determine parent's investment income for 2021 under partial equity method and equity method.
e. What would be Foxx's balance for retained earnings as of January 1, 2021, if each of the following methods had been in use?
• Initial value method.
• Partial equity method.
Equity method.
Transcribed Image Text:Foxx Corporation acquired all of Greenburg Company's outstanding stock on January 1, 2019. for $586,000 cash. Greenburg's
accounting records showed net assets on that date of $440,000, although equipment with a 10-year remaining life was undervalued
on the records by $56,500. Any recognized goodwill is considered to have an indefinite life.
Greenburg reports net income in 2019 of $105,000 and $137,500 in 2020. The subsidiary declared dividends of $20,000 in each of
these two years.
Account balances for the year ending December 31, 2021, follow. Credit balances are indicated by parentheses.
Revenues
Cost of goods sold
Depreciation expense
Investment income
Foxx
$(1,164, 000)
145, 500
358, e00
(20,000)
$ (680, 500)
Greenburg
$ (620, 000)
155, e00
440, 000
Net income
(25, 000)
Retained earnings, 1/1/21
Net income
$(1,160, 000)
(689, 500)
120, e00
$ (342, 500)
(25, 000)
20,000
$ (347, 500)
Dividends declared
Retained earnings, 12/31/21
$(1,720,500)
Current assets
373, e00
586, 000
1,882, e00
964, 000
626, 000
$ 3,631, 000
$(1,810, 500)
(900, e00)
(1,720, 500)
$(3,631, 000)
194, e0e
Investment in subsidiary
Equipment (net)
Buildings (net)
Land
676, e00
594, e00
140, e00
$ 1,684, 000
$ (956, 500)
(300, e00)
(347,500)
$(1,684, 000)
Total assets
Liabilities
Common stock
Retained earnings
Total liabilities and equity
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
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
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning