You are required to prepare the consolidated statement of financial position as at 31 December x7. Assume: i. Non-controlling interest is measured based on the net assets of the investee on the acquisition date. il. Non-controlling interest is measured based on its fair value.

You are required to prepare the consolidated statement of financial position as at 31 December x7. Assume: i. Non-controlling interest is measured based on the net assets of the investee on the acquisition date. il. Non-controlling interest is measured based on its fair value.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter6: Audit Evidence

Section: Chapter Questions

Problem 15CYBK

See similar textbooks

Related questions

Q: One company purchases the outstanding debt instruments of an affiliated company on the open market.…

Q: Describe the difference between the economic entity concept and the parent company concept…

A: The concept of economic entity explains that the finances of an entity should be kept separate or…

Q: Assume that the cost of acquisition includes a control premium of P30,000, the non-controlling…

A: Retained earnings refer to the earnings earned by the parent company and the part of the earnings of…

Q: Financial assets

A: In accordance with PFRS 9, an entity may reclassify Correct Answer:- b. Financial assets designated…

Q: What amount of non-controlling interest is to be presented in the consolidated statement of…

A: Non-controlling interest is also termed as minority interest which shall refer to those…

Q: Statement 1: In the financial settlement of a contingent consideration classified as financial…

A: The question is related to which Statement is correct.

Q: Kent Ltd owns all of the shares of Lodh Ltd. That is Lodh Ltd is a wholly own subsidiary of Kent…

A: Kent Ltd is a parent company And, Lodh Ltd is a wholly owned subsidiary of Kent Ltd.

Q: In consolidated balance sheet immediately after the acquisition, consolidated stockholders' equity…

A: The term “acquisitions” means when a company holds more than 50% of controlling interest in another…

Q: When the acquisition of a subsidiary occurs during a reporting period, the com O and subsidiary…

A: A corporation which belongs to another corporation which is usually referred to as parent…

Q: 7. What amount of non-controlling interest is to be presented in the consolidated statement of…

A: Retained Earnings:- Retained earnings are considered as the part of profit, that is not distributed…

Q: Statement I: During the measurement period, the acquirer shall prospectively adjust the provisional…

A: During the measurement period the acquirer shall retrospectively adjust the provisional amounts…

Q: The consolidated balance sheet for P and S Companies on the date of acquisition will include:

A: Purchase price = $350,000 Shares acquired = 80% Book value of assets = $424,000 Difference in…

Q: When there is a dividend payable by the subsidiary at acquisition date, under what conditions should…

A: Pre-acquisition entries: Pre-acquisition entries are required to keep 'investment in subsidiaries'…

Q: ABC Company acquired XYZ Company in an acquisition. What date should be used as the acquisition date…

A: Acqusition Acqusition which is describe as the purchase the control of over another companies shares…

Q: f non-controlling interest plus carrying value of previously held interest in the acquiree plus…

A: Business combination: Business combination refers to the process in which one business obtains…

Q: Assume that P acquires controlling interest in S and there is a Differential at the acquisition…

A: Step 1 Consolidated Financial Statements is Full Consolidation and all the shareholding attributes…

Q: Statement I: During the measurement period, the acquirer shall prospectively adjust the provisional…

A: Measurement period :- Measurement period is the period after the acquisition date during which the…

Q: Adjustments where the investor does and does not prepare consolidated financial statements On 1…

A: SOLUTION- COMPUTATION OF EXCESS OF ACQUISITION PRICE OVER THE FAIR VALUE OF NET ASSETS-…

Q: A business combination resulting to a goodwill is accounted using acquisition method. In the…

A: Acquisition accounting refers to the process of accounting through which the assets, liabilities,…

Q: REQUIRED bo 1. Prepare a schedule to assign the difference between the fair value of the investment…

A: Consolidated balance sheet defines the balance sheet prepared by the parent entity after the process…

Q: During a fiscal year, the balance of a parent company's Investment in Subsidiary ledger account for…

A: An equity measure is a method of accounting in which an investment is initially recognized at cost…

Q: How is the portion of consolidated earnings to be assigned to the non-controlling interest in…

Q: a. Determine the December 31, 2021, consolidated balance for each of the following accounts:…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: A) Calculate the goodwill at acquisition B) Calculate the Goodwill at acquisition with fair value of…

A: Basic Information : Tower PLC acquired 80% equity interest in Holborn PLC. Acquiring company : Tower…

Q: How is a goodwill in a business combination measured according to PFRS 3? Consideration transferred…

A: As per PFRS 3 Goodwill is an intangible asset representing the future value of economic benefits…

Q: Kent Ltd owns all of the shares of Lodh Ltd. That is Lodh Ltd is a wholly own subsidiary of Kent…

A: GIVEN Kent Ltd owns all of the shares of Lodh Ltd. That is Lodh Ltd is a wholly own subsidiary…

Q: To arrive at the U.S. GAAP-based net income fi gures shown in Exhibit 3, Royal Ahold fully…

A: Under US GAAP, A company should consolidate another company's accounts while reporting only when its…

Q: Required: a Compile a consolidated statement of profit or loss for P Ltd's group for the year ended…

A: Consolidated income statement is a statement which presents the income, expenses, revenues of the…

Q: Discuss the impact on consolidated financial statements of a midyear acquisition.

A: Consolidated financial statements are the financial statements of a group in which the assets,…

Q: Determine the following asset balances that would appear in the consolidated financial statements of…

Q: FE holds investments in a number of subsidiaries and associate entities and made one change to its…

A: Cash flow statements include: Cash flow from operating activities Cash flow from Investing…

Q: a) The amount of the adjustment to the non-controlling interest in consolidated net assets is equal…

A: Answer: Option (B). Unrealized intercompany gain at the beginning of the period is correct.

Q: In a business combination - stock acquisition, difference between current fair values and book…

A: Solution Concept Goodwill In a business combination - stock acquisition, difference…

Q: S1: Current fair value of the investment adjusted for dividends received describes the amount at…

A: S1: Current fair value of the investment adjusted for dividends receiveddescribes the amount at…

Q: Prepare and compute for the CONSOLIDATED EQUITY at the date of acquisition.

A: PROMDI CO. acquired the net assets of CARDO CO and SYANO CO PROMDI CO issues CARDO CO = 30000…

Q: between the fair value of the investment in Set and the book value of the interest to identifiable…

A: schedule to allocate the difference between the fair value of an investment inset and the book…

Q: Identify appropriate placements for the components of the non controlling interest in consolidated…

A: Acquisition: The acquisition refers to the business combination when one entity or organization…

Q: How is the Non-Controlling Interest displayed in a consolidated balance sheet? a. As a separate…

A: Introduction:- Non-controlling interest occurred in business combination. The parent acquires less…

Q: During the current year X Ltd has acquired the following investments in the shares issued by Y Ltd…

A: Introduction: IFRS (International Financial Reporting Standards) A group of accounting rules called…

Q: An entity acquired control of another entity by purchasing shares in steps. Which of the following…

A: Acquisition can be defined as a corporate transaction where one company purchases a portion or all…

Q: How is the amount assigned to the non-controlling interest normally determined when a consolidated…

Q: How is non-controlling interest in the subsidiary’s net assets presented in the consolidated…

A: Non-Controlling Interest:- It is also known as "minority interest", these are the owner of less than…

Q: At acquisition date, the net assets of the acquired subsidiary are included in the consolidated…

A: The IAS 10 deals with the consolidation of financial statements. The process of consolidating the…

Q: tatement I: Gain on bargain purchase is included in the consolidated balance of shareholders’ equity…

A: The answer is stated below:

Q: Requirements: WHAT IS THE AMOUNT OF: A. Goodwill to be reported on the consolidated balance sheet…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Treasury shares are recorded at * acquisition cost fair value at balance sheet date…

A: Treasury shares are recorded at the price of purchase.

Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

You are required to prepare the consolidated statement of financial position as at 31 December x7. Assume:
i. Non-controlling interest is measured based on the net assets of the investee on the acquisition date.
il. Non-controlling interest is measured based on its fair value.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step by step

Solved in 6 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions

An entity acquired a 30% interest in another entity in Year I. In Year 2, it acquired another 50% equity interest in the same entity. Which of the following statements is valid?a. The entity's per-existing 30% equity interest should be remeasured at fair value at the acquisition date.b. The entity's net assets should be remeasured at fair value at acquisition date.
An entity acquired control of another entity by purchasing shares in steps. Which of the following statements regarding this type of acquisition is true? A. The previously held shares should be remeasured at fair value on the acquisition date and the gain recognized in earnings of the period B. The previously held shares should be remeasured at fair value on the acquisition date and any gain on previously held shares should be included in other comprehensive income for the period C. The acquisition cost includes only the newly issued shares measured at fair value on the date if acquisition D. The cost of acquisition equals the amount paid for the previously held shares plus the fair value of shares issued at date of acquisition.
REQUIRED 1. Prepare a schedule to assign the difference between the fair value of the investment in Set and the book value of the interest to identifiable and unidentifiable net assets. 2. Prepare a consolidated balance sheet for Par Corporation and Subsidiary at January 1, 2011.
What amount of non-controlling interest is to be presented in the consolidated statement of financial position on December 31, 2x19? Note: Just use the information that are provided.
An entity acquired a 30% interest in another entity in Year I. In Year 2, it acquired another 50% equity interest in the same entity. Which of the following statements is valid?I. The entity's per-existing 30% equity interest should be remeasured at fair value at the acquisition date.Il. The entity's net assets should be remeasured at fair value at acquisition date. a. II only b. Neither I nor II c. Both I and II d. I only
An entity acquired a 30% interest in another entity in Year I. In Year 2, it acquired another 50% equity interest in the same entity. Which of the following statements is valid?I. The entity's per-existing 30% equity interest should be remeasured at fair value at the acquisition date.Il. The entity's net assets should be remeasured at fair value at acquisition date. Neither I nor II I only II only Both I and II
Statement I: The equity securities issued as part of the consideration transferred shall be measured at the fair value of the shares at the date of acquisition.Statement II: The goodwill in the books of the acquiree shall be measured at its fair value at the date of acquisition. a. True, False b. False, True c. True, True d. False, False
Prepare and compute for the CONSOLIDATED EQUITY at the date of acquisition.
Which of the following statements regarding the acquisition method of accounting for business combinations is/are correct? (i) It is applied only when the acquirer purchases 100% of the share capital of the acquiree (ii) It requires calculating goodwill (iii) It is applied at every balance sheet date subsequent to the date of acquisition
What amount will be shown on the July 1, 20X1, consolidated balance sheet for the following: Total equity Now assume this transaction had been completed prior to the elimination of poolings of interest, and that the pooling method had been used to record the acquisition. Redo requirements 1 and 2: Total assets Total liabilities Total equity
In a business combination - stock acquisition, difference between current fair values and book values of subsidiary’s identifiable assets and liabilities on acquisition date is:
Statement I: During the measurement period, the acquirer shall prospectively adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of acquisition date.Statement II: Controlling interest is the equity in a subsidiary not attributable, directly or indirectly, to a parent. a. True, True b. False, False c. False, True d. True, False