ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Question
Chapter 10, Problem 10.20P
a
To determine
Consolidated statement of cash flow: consolidated entities, as with individual companies, must present a statement of cash flow when they issue a complete set of financial statements. A consolidated statement of
preparation of worksheet to develop consolidated cash flows for 20X3 using indirect method.
b
To determine
Consolidated statement of cash flow: consolidated entities, as with individual companies, must present a statement of cash flow when they issue a complete set of financial statements. A consolidated statement of cash flows is similar to a statement of cash flows prepared for an individual corporate entity and is prepared in same manner. Consolidated statement of cash flow is prepared after consolidated financial statement. Consolidated cash flow statement is prepared form the information in the three consolidated statements, when an indirect approach is used consolidated net income must be adjusted for all items that affect consolidated net income and the cash of consolidated entity effectively.
Requirement 2
preparation of consolidated statement of cash flows for 20X4.
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Problems 7 and 8 are based on the following information.Comparative consolidated balance sheet data for Iverson, Inc., and its 80 percent–owned subsidiary Oakley Co. follow:Additional Information for Fiscal Year 2018• Iverson and Oakley’s consolidated net income was $45,000.• Oakley paid $5,000 in dividends during the year. Iverson paid $12,000 in dividends.• Oakley sold $11,000 worth of merchandise to Iverson during the year.• There were no purchases or sales of long-term assets during the year.In the 2018 consolidated statement of cash flows for Iverson Company:Net cash flows from financing activities werea. $(25,000)b. $(37,000)c. $(38,000)d. $(42,000)
Peanut Company acquired 80 percent of Snoopy Company's outstanding common stock for $260,000 on January 1, 20X8, when the
book value of Snoopy's net assets was equal to $325,000. Peanut uses the equity method to account for investments. The following
trial balance summarizes the financial position and operations for Peanut and Snoopy as of December 31, 20X9:
Cash
Accounts Receivable
Inventory
Investment in Snoopy Company
Land
Buildings and Equipment
Cost of Goods Sold
Depreciation Expense
Selling & Administrative Expense
Dividends Declared
Accumulated Depreciation
Accounts Payable
Bonds Payable
Common Stock
Retained Earnings
Sales
Income from Snoopy Company
Total
Peanut Company
Debit
$ 264,000
204,000
184,000
325,600
213,000
719,000
325,000
42,000
214,000
214,000
$ 2,704,600
Credit
$ 491,000
59,000
131,000
499,000
609,400
836,000
79,200
$ 2,704,600
Debit
Snoopy Company
$ 82,000
87,000
102,000
0
88,000
195,000
161,000
15,000
38,000
33,000
$ 801,000
Required:
a. Prepare any equity method…
Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $321,300 on January 1, 20X8, when the
book value of Snoopy's net assets was equal to $357,000. Peanut uses the equity method to account for investments. Trial balance
data for Peanut and Snoopy as of January 1, 20X8, follow:
Assets
Cash
Accounts Receivable
Inventory
Investment in Snoopy Company
Land
Buildings and Equipment
Accumulated Depreciation
Total Assets
Liabilities and Stockholders' Equity
Accounts Payable
Bonds Payable
Common Stock
Retained Earnings
Total Liabilities and Equity
Peanut Company Snoopy Company
$ 24,000
34,000
72,000
$ 71,000
66,000
117,000
321,300
231,000
719,000
(392,000)
$ 1,133,300
$ 66,000
195,000
481,000
391,300
$ 1,133,300
113,000
210,000
(8,000)
$ 445,000
$ 22,000
66,000
195,000
162,000
$ 445,000
Required:
a. Prepare the journal entry on Peanut's books for the acquisition of Snoopy on January 1, 20X8.
b. Prepare a consolidation worksheet on the acquisition date, January 1,…
Chapter 10 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 10 - Prob. 10.1QCh. 10 - Why are dividend payments to noncontrolling...Ch. 10 - Prob. 10.3QCh. 10 - Why are changes in inventory balances not shown in...Ch. 10 - Prob. 10.5QCh. 10 - How is an increase in inventory included in the...Ch. 10 - What portion of the sales of an acquired company...Ch. 10 - Prob. 10.8QCh. 10 - Prob. 10.9QCh. 10 - Prob. 10.10Q
Ch. 10 - Prob. 10.11QCh. 10 - Prob. 10.12QCh. 10 - Prob. 10.13QCh. 10 - Prob. 10.14QCh. 10 - How do interperiod income tax allocation...Ch. 10 - How does the use of interperiod tax allocation...Ch. 10 - Prob. 10.17QCh. 10 - Prob. 10.18QCh. 10 - Prob. 10.19QCh. 10 - When a subsidiary’s convertible bond is treated as...Ch. 10 - Prob. 10.21QCh. 10 - What effect does the presence of a noncontrolling...Ch. 10 - Prob. 10.3CCh. 10 - Consolidated Cash Flows Analysis The consolidated...Ch. 10 - Prob. 10.1ECh. 10 - Prob. 10.2ECh. 10 - Prob. 10.3ECh. 10 - Prob. 10.4ECh. 10 - Prob. 10.5ECh. 10 - Direct Method Cash Flow Statement Using the data...Ch. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - Prob. 10.9ECh. 10 - Prob. 10.10ECh. 10 - Prob. 10.11ECh. 10 - Prob. 10.12ECh. 10 - Prob. 10.13ECh. 10 - Prob. 10.14ECh. 10 - Effect of Convertible Bonds on Earnings per Share...Ch. 10 - Effect of Convertible Preferred Stock on Earnings...Ch. 10 - Prob. 10.17PCh. 10 - Prob. 10.18PCh. 10 - Preparing a Statement of Cash Flows—Direct Method...Ch. 10 - Prob. 10.20PCh. 10 - Prob. 10.21PCh. 10 - Prob. 10.22PCh. 10 - Prob. 10.23PCh. 10 - Prob. 10.24PCh. 10 - Prob. 10.25PCh. 10 - Prob. 10.26PCh. 10 - Prob. 10.27PCh. 10 - Prob. 10.28PCh. 10 - Prob. 10.29PCh. 10 - Prob. 10.30PCh. 10 - Prob. 10.31PCh. 10 - Prob. 10.32PCh. 10 - Prob. 10.33P
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