menu
bartleby
search
close search
Hit Return to see all results
Subscribe
Sign in

Business
AccountingIntermediate Accounting: Reporting And Analysis3rd Edition

close solutoin list
Chapter 13, Problem 6C
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
Problem 1GI
Problem 2GI
Problem 3GI
Problem 4GI
Problem 5GI
Problem 6GI
Problem 7GI
Problem 8GI
Problem 9GI
Problem 10GI
Problem 11GI
Problem 12GI
Problem 13GI
Problem 14GI
Problem 15GI
Problem 16GI
Problem 17GI
Problem 18GI
Problem 19GI
Problem 20GI
Problem 21GI
Problem 22GI
Problem 23GI
Problem 24GI
Problem 25GI
Problem 26GI
Problem 27GI
Problem 28GI
Problem 29GI
Problem 30GI
Problem 31GI
Problem 32GI
Problem 33GI
Problem 34GI
Problem 1MC
Problem 2MC
Problem 3MC
Problem 4MC
Problem 5MC
Problem 6MC
Problem 7MC
Problem 8MC
Problem 9MC
Problem 10MC
Problem 1RE
Problem 2RE
Problem 3RE
Problem 4RE
Problem 5RE
Problem 6RE
Problem 7RE
Problem 8RE
Problem 9RE
Problem 10RE
Problem 11RE
Problem 12RE
Problem 13RE
Problem 14RE
Problem 15RE
Problem 16RE
Problem 1E
Problem 2E
Problem 3E
Problem 4E
Problem 5E
Problem 6E
Problem 7E
Problem 8E
Problem 9E
Problem 10E
Problem 11E
Problem 12E
Problem 13E
Problem 14E
Problem 15E
Problem 16E
Problem 17E
Problem 18E
Problem 19E
Problem 20E
Problem 21E
Problem 22E
Problem 23E
Problem 24E
Problem 25E
Problem 26E
Problem 27E
Problem 1P
Problem 2P
Problem 3P
Problem 4P
Problem 5P
Problem 6P
Problem 7P
Problem 8P
Problem 9P
Problem 10P
Problem 11P
Problem 12P
Problem 13P
Problem 14P
Problem 15P
Problem 16P
Problem 17P
Problem 18P
Problem 19P
Problem 20P
Problem 21P
Problem 22P
Problem 23P
Problem 24P
Problem 25P
Problem 26P
Problem 1C
Problem 2C
Problem 3C
Problem 4C
Problem 5C
Problem 6C
Problem 7C
Problem 8C
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
1 views

For the past 5 years, Herbert has maintained an investment properly accounted for and reported upon) in Broome amounting to a 10% interest in the voting common stock of Broome. The purchase price was $700,000 and the underlying net equity in Broome at the date of purchase was $620,000 . On January 2 of the current year, Herbert purchased an additional 15% of the voting common stock of Broome for $1,200,000; the underlying net equity of additional investment at January 2 was $1,000,000. Broome has been profitable and has paid dividends annually since Herbert’s initial acquisition.

Required:

Discuss how this increase in ownership affects the accounting for and reporting upon the investment in Broome. Include in your discussion adjustments, if any, to the amount shown prior to the increase in investment to bring the amount into conformity with GAAP. Also include how the company would report in current and subsequent periods.

To determine

Discuss the manner in which the increase in ownership affects the accounting and reporting the investment, include the adjustments if any and also the way in which the company would report that in the current and subsequent periods.

Explanation

The investment has increased from 10% to 25% in Company B’s common stock. Thus, Company H has attained the ability to exercise the significant influence over Company B. Hence, to report this significant change Company H must use the equity method.

The change in the reporting method from the fair value method to the equity method should be made retrospectively restating each period in which the investments were held as it is used from the beginning. While making the necessary changes, Company H should return to the original amount paid for the purchase of the initial investment and it must make the following adjustments:

  • The cumulative adjustment of cost to the fair value should be “reversed”.
  • The dividends received must be recorded as the reduction in the amount which is shown for the investment...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution
arrow_back
Chapter 13,
Problem 5C
Chapter 13,
Problem 7C
arrow_forward

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 13 Solutions

Show all chapter solutions add
Ch-13 P-1GICh-13 P-2GICh-13 P-3GICh-13 P-4GICh-13 P-5GICh-13 P-6GICh-13 P-7GICh-13 P-8GICh-13 P-9GICh-13 P-10GI
Ch-13 P-11GICh-13 P-12GICh-13 P-13GICh-13 P-14GICh-13 P-15GICh-13 P-16GICh-13 P-17GICh-13 P-18GICh-13 P-19GICh-13 P-20GICh-13 P-21GICh-13 P-22GICh-13 P-23GICh-13 P-24GICh-13 P-25GICh-13 P-26GICh-13 P-27GICh-13 P-28GICh-13 P-29GICh-13 P-30GICh-13 P-31GICh-13 P-32GICh-13 P-33GICh-13 P-34GICh-13 P-1MCCh-13 P-2MCCh-13 P-3MCCh-13 P-4MCCh-13 P-5MCCh-13 P-6MCCh-13 P-7MCCh-13 P-8MCCh-13 P-9MCCh-13 P-10MCCh-13 P-1RECh-13 P-2RECh-13 P-3RECh-13 P-4RECh-13 P-5RECh-13 P-6RECh-13 P-7RECh-13 P-8RECh-13 P-9RECh-13 P-10RECh-13 P-11RECh-13 P-12RECh-13 P-13RECh-13 P-14RECh-13 P-15RECh-13 P-16RECh-13 P-1ECh-13 P-2ECh-13 P-3ECh-13 P-4ECh-13 P-5ECh-13 P-6ECh-13 P-7ECh-13 P-8ECh-13 P-9ECh-13 P-10ECh-13 P-11ECh-13 P-12ECh-13 P-13ECh-13 P-14ECh-13 P-15ECh-13 P-16ECh-13 P-17ECh-13 P-18ECh-13 P-19ECh-13 P-20ECh-13 P-21ECh-13 P-22ECh-13 P-23ECh-13 P-24ECh-13 P-25ECh-13 P-26ECh-13 P-27ECh-13 P-1PCh-13 P-2PCh-13 P-3PCh-13 P-4PCh-13 P-5PCh-13 P-6PCh-13 P-7PCh-13 P-8PCh-13 P-9PCh-13 P-10PCh-13 P-11PCh-13 P-12PCh-13 P-13PCh-13 P-14PCh-13 P-15PCh-13 P-16PCh-13 P-17PCh-13 P-18PCh-13 P-19PCh-13 P-20PCh-13 P-21PCh-13 P-22PCh-13 P-23PCh-13 P-24PCh-13 P-25PCh-13 P-26PCh-13 P-1CCh-13 P-2CCh-13 P-3CCh-13 P-4CCh-13 P-5CCh-13 P-6CCh-13 P-7CCh-13 P-8C

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Communication Godwin Co. owns three delivery trucks. Details for each truck at the end of the most recent year ...

Accounting

Allocating selling and administrative expenses using activity-based costing Shrute Inc. manufactures office cop...

Financial And Managerial Accounting

Entries for uncollectible accounts, using direct write-off method Journalize the following transactions in the ...

Corporate Financial Accounting

Use the following information for Brief Exercises 4-27 and 4-28: Quillen Company manufactures a product in a fa...

Managerial Accounting: The Cornerstone of Business Decision-Making

At the end of 20-2, Martel Co. had 380,000 in Accounts Receivable and a debit balance of 6,000 in Allowance for...

College Accounting, Chapters 1-27

LEAN MANUFACTURING PRINCIPLES Write an essay outlining the key principles of lean manufacturing.

Accounting Information Systems

Parking lot staff budget Adventure Park is a large theme park. Staffing for the theme park involves many differ...

Financial & Managerial Accounting

How would e-commerce improve the revenue/collection cycle?

Financial Accounting

Explain the various types of pricing objectives.

Foundations of Business (MindTap Course List)

How might the absence of an organizations strategic plan for the information system affect the conduct of a pre...

Accounting Information Systems

Give an example of a favorable shock to aggregate supply. Use model of aggregate demand and aggregate supply to...

Principles of Macroeconomics (MindTap Course List)

How do managers at Barcelona control the company's financial performance?

Management, Loose-Leaf Version

Comprehensive/Spreadsheet Problem NONCONSTANT GROWTH AND CORPORATE VALUATION Rework problem 9-18, parts a, b, a...

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

According to the quantity theory of money, which variable in the quantity equation is most stable over long per...

Principles of Economics (MindTap Course List)

3 Request Refusal: Rising Phoenix Team Sinks Application (L.O.1-4) E-Mail Web Adobe Systems Incorporated is kno...

Essentials of Business Communication (MindTap Course List)

Explain the concept of ethical behavior

MKTG 12:STUDENT ED.-TEXT

Describe the four variables of the marketing mix.

Contemporary Marketing

(Specialization) Provide some examples of specialized markets or retail outlets. What makes the Web so conduciv...

ECON MACRO

Discuss the following statement: If a firm has only independent projects, a constant WACC, and projects with no...

Fundamentals of Financial Management (MindTap Course List)

You were planning to spend Saturday working at your part-time job, but a friend asks you to go skiing. What is ...

Essentials of Economics (MindTap Course List)

The following data show the number of rental cars in service for three rental car companies: Hertz, Avis, and D...

STATISTICS F/BUSINESS+ECONOMICS-TEXT

(Income Elasticity of Demand) Calculate the income elasticity of demand for each of the following goods: Quanti...

ECON MICRO

Chris works at a part-time job that pays $15 per hour. He wants a new shirt to wear next Friday night. He can b...

Economics:

The discovery of a large new reserve of crude oil will shift the ________ curve for gasoline, leading to a ____...

Brief Principles of Macroeconomics (MindTap Course List)

(Price Elasticity and Total Revenue) Fill in the blanks for each price-quantity combination listed in the follo...

ECON: MICRO4 (New, Engaging Titles from 4LTR Press)

An economy consists of three workers: Larry, Moe, and Curly. Each works 10 hours a day and can produce two serv...

Principles of Microeconomics (MindTap Course List)

Give an example of a slide and an example of a transposition. Explain how you might decide whether an error is ...

College Accounting (Book Only): A Career Approach

Periodic inventory by three methods; cost of merchandise sold The units of an item available for sale during th...

Financial & Managerial Accounting

M. Parish purchased supplies on credit. What is the impact on the accounting equation? a. Increase Supplies and...

College Accounting (Book Only): A Career Approach

A sale of merchandise on account for 36,000 is subject to an 8% sales tax. (a) Should the sales tax be recorded...

Financial Accounting

Activity-based costing Mainline Marine Company has total estimated factory overhead for the year of 2,090,000, ...

Accounting (Text Only)

What is a "replacement chain"? When and how should replacement chains be used in capital budgeting?

Fundamentals of Financial Management (MindTap Course List)

The FinancialTimes/Harris Poll is a monthly online poll of adults from six countries in Europe and the United S...

Statistics for Business & Economics, Revised (MindTap Course List)

PV AND A LAWSUIT SETTLEMENT It is now December 31,2013 (t = 0), and a jury just found in favor of a woman who s...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What would happen to the loanable funds demand curve if new potentially profitable technologies arise and busin...

Exploring Economics

All sales, for cash or on credit, can be recorded in the general journal.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

What are the two major functions of an information system?

Pkg Acc Infor Systems MS VISIO CD

Over the past 20 years, Mexico has had high inflation and Japan has had low inflation. What do you predict has ...

Principles of Macroeconomics (MindTap Course List)

Capital and revenue expenditures On February 14, Garcia Associates Co. paid 2,300 to repair the transmission on...

Corporate Financial Accounting

The monthly and hourly wage schedule for the employees of Quirk, Inc., follows. No employees are due overtime p...

PAYROLL ACCT.,2019 ED.(LL)-TEXT

Break-even sales and cost-volume-profit graph Last year, Ridgecrest Inc. had sales of $3,200,000. based on a un...

Survey of Accounting (Accounting I)

The PC Tech company assembles and then tests two models of computers, Basic and XP. For the coming month, the c...

Practical Management Science

All final goods and services that make up GDP can be expressed as a. GDP = C + I G + (X + M) b. GDP = C + I + ...

Economics For Today

The lower the dollar price of a peso, the higher is the quantity demanded of pesos and the lower is the quantit...

Economics (MindTap Course List)

Select the correct word in parentheses. Despite the dangers, employees change their computer passwords (infrequ...

Bcom

Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for pa...

Purchasing and Supply Chain Management

If firms in a perfectly competitive market want to produce more output, is the market in long-run equilibrium?

Microeconomics

During August, Skyler Company worked on three jobs. Data relating to these three jobs follow: Overhead is assig...

Cornerstones of Cost Management (Cornerstones Series)

How are new Keynesians, who believe that people hold rational expectations, different from new classical econom...

Macroeconomics

bartleby
© bartleby 2019