ADVANCED ACCOUNTING
ADVANCED ACCOUNTING
13th Edition
ISBN: 9781260773033
Author: Hoyle
Publisher: MCG
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Chapter 2, Problem 10Q
To determine

Explain the manner in which Company S record the issuance of the shares.

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Clark Corporation purchased 200 shares of its own $1 par value common stock for $20 per share. What journal entry should be made to record this transaction?
Sloane, Inc., issues 25,000 shares of its own common stock in exchange for all of the outstanding shares of Benjamin Company. Benjamin will remain a separately incorporated operation. How does Sloane record the issuance of these shares?
On January 1, Year 4, Pane Corp. exchanged 150,000 shares of its $20 par value common stock for all of Sky Corp.s common stock. At that date, the fair value of Panes common stock issued was equal to the fair value of the identifiable assets acquired and liabilities assumed. Both corporations continued to operate as separate businesses, maintaining accounting records with years ending December 31. In its separate statements, Pane accounts for the investment using the equity method. Information from separate company operations follows:PaneSkyRetained earnings -- 12/31/Yr 3$3, 200, 000$925,000 Dividends paid -- 3/25/Yr 4750, 000200, 000lf consolidated net income was $800,000, what amount of retained earnings should Pane report in its December 31, Year 4, consolidated balance sheet? A. $3,250,000B. $3,050,000C. $4, 125, 000D. $4, 925,000

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ADVANCED ACCOUNTING

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