EBK ADVANCED FINANCIAL ACCOUNTING
11th Edition
ISBN: 8220102796096
Author: Christensen
Publisher: YUZU
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Question
Chapter 2, Problem 2.28BP
a.
To determine
Concept introduction
The consolidated
To prepare: a
a.
Expert Solution
Answer to Problem 2.28BP
The journal entry so passed gives a debit of investment and credit the cash with the same amount.
Explanation of Solution
| Costmethod entry on books | Debit | Credit |
| Cash | ||
| Dividend income | ||
| Record P co. share of the snoopy co. income |
b.
To determine
Concept introduction
The consolidated balance sheet and the worksheets are the computed tools that are used to calculated the retained earnings and the dividend produced by the subsidiaries towards its parent company.
To prepare: the consolidate worksheet for the final values
b.
Expert Solution
Answer to Problem 2.28BP
The consolidate worksheet is prepared and discussed.
Explanation of Solution
| Book value calculation | |||||
| Total book value | = | Common stock | + | Retained earnings | |
| Original book value |
| Income statement | P | S | Dr. | Cr. | consolidated |
| Sales |
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| Less Cogs |
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| Depreciation Exp |
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| Sel. Exp |
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| Dividend Income |
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| Net income |
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| Statement of Retain Earning | P | S | Dr. | Cr. | Consolidated |
| Opening balance |
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| Net income |
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| Less dividend declared |
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| End balance |
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| Income statement | Peanut co | Snoopy co | Eliminated DR | Eliminated CR | consolidated |
| Cash | |||||
| Accounts received | |||||
| Inventory | |||||
| Investment in snoopy co | |||||
| Land | |||||
| Building and equipment | |||||
| Less accumulated depreciation | |||||
| Total assets | |||||
| Account payable | |||||
| Bonds | |||||
| Common stocks | |||||
| Retained earnings | |||||
| Total liabilities |
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Students have asked these similar questions
on January 1, 20x1 entitiy A acquires 30% interest in Entity B for 600,000. Entity B reports profit of 200,000 and declares dividends of 50,000 in 20x1. How much is the carrying amount of the investment in associate on Dec31, 20x1
assuming the beginning of the year (20X3) balance
in the Investment in A account is $716,000 complete the consolidated worksheet below.
To ald in this, Information from Problem 4 is repeated below.
Monroe Company purchased 80% of Adams Company on January 1, 20X1.
The purchase price paid was $600,000. On that day, the book value of Adams
was $500,000. Excess of cost over book value is due to goodwill.
Included in Adams's income are intercompany sales to Monroe of $40,000 with a cost to Adams of $25,000.
30% of this inventory is on hand in the Monroe inventory at December 31, 20X3. In addition, inventory
sold at a profit of $5,000 was in the inventory of Monroe at December 31, 20X2.
Below are the balances of accounts of Monroe and Adams at December 31, 20x3.
Consolidation Entries
Consolidated Bal.
Monroe
Adams
Dr.
Cr.
Sales
$50,000 $250,000
CGS & Expenses
$30,000 $150,000
Income from S.
Income
$100,000
NCI
Controlling Interest
Retained Earnings Jan 1, 10
$700,000 $190,000
Dividends…
4
Peanut Company acquired 80 percent of Snoopy Company's outstanding common stock for $300,000 on January 1, 20X8, when the
book value of Snoopy's net assets was equal to $375,000. Peanut uses the eguity method to account for Investments. The following
trial balance summarizes the financial position and operations for Peanut and Snoopy as of December 31, 20X9:
Peanut Company
Snoopy Company
Credit
Debit
Credit
Debit
$ 272,000
$ 77,000
82, 000
Cash
Accounts Receivable
200, eee
Inventory
193,e00
319,800
216,e00
706,000
118,000
Investment in Snoopy Company
Land
81,000
Buildings and Equipment
199, 000
155,000
13,000
54, 250
34,000
Cost of Goods Sold
375,000
Depreciation Expense
Selling & Administrative Expense
Dividends Declared
47,000
221,000
224,e00
$ 487,000
$ 39,e00
Accumulated Depreciation
Accounts Payable
Bonds Payable
55,000
39,e00
137,000
79,250
Common Stock
Retained Earnings
491,000
682,400
187,e00
158,eee
319, e00
Sales
844,000
Income from Snoopy Company
77,400
Total
$2,773,800…
Chapter 2 Solutions
EBK ADVANCED FINANCIAL ACCOUNTING
Ch. 2 - What types of investments in common stock normally...Ch. 2 - Prob. 2.2AQCh. 2 - When is equity method reporting considered...Ch. 2 - Prob. 2.4QCh. 2 - Prob. 2.5QCh. 2 - Prob. 2.6QCh. 2 - Prob. 2.7QCh. 2 - Prob. 2.8QCh. 2 - How does carrying securities at fair value...Ch. 2 - How does the fully adjusted equity method differ...
Ch. 2 - Prob. 2.11QCh. 2 - What is the modified equity method? When might a...Ch. 2 - Prob. 2.13AQCh. 2 - Prob. 2.14QCh. 2 - Prob. 2.15QCh. 2 - Prob. 2.16QCh. 2 - Prob. 2.17QCh. 2 - How are a subsidiary’s dividend declarations...Ch. 2 - Prob. 2.19QCh. 2 - Give a definition of consolidated retained...Ch. 2 - Prob. 2.21QCh. 2 - Prob. 2.22QCh. 2 - Choice of Accounting Method Slanted Building...Ch. 2 - Prob. 2.2CCh. 2 - Prob. 2.3ACCh. 2 - Prob. 2.4CCh. 2 - Prob. 2.5CCh. 2 - Prob. 2.6CCh. 2 - Prob. 2.1.1ECh. 2 - Multiple-Choice Questions on Accounting for Equity...Ch. 2 - Prob. 2.1.3ECh. 2 - Prob. 2.1.4ECh. 2 - Prob. 2.1.5ECh. 2 - Prob. 2.1.6ECh. 2 - Multiple-Choice Questions on Intercorporate...Ch. 2 - Prob. 2.2.2ECh. 2 - Prob. 2.3.1ECh. 2 - Prob. 2.3.2ECh. 2 - Prob. 2.3.3ECh. 2 - Prob. 2.3.4ECh. 2 - Cost versus Equity Reporting Winston Corporation...Ch. 2 - Prob. 2.5ECh. 2 - Prob. 2.6ECh. 2 - Prob. 2.7ECh. 2 - Income Reporting Grandview Company purchased 40...Ch. 2 - Prob. 2.9ECh. 2 - Carrying an Investment at Fair Value versus Equity...Ch. 2 - Investee with Preferred Stock Outstanding Reden...Ch. 2 - Prob. 2.12AECh. 2 - Prob. 2.13AECh. 2 - Prob. 2.14ECh. 2 - Prob. 2.15ECh. 2 - Prob. 2.16ECh. 2 - Prob. 2.17ECh. 2 - Changes ¡n the Number of Shares Held Idle...Ch. 2 - Prob. 2.19PCh. 2 - Carried at Fair Value Journal Entries Marlow...Ch. 2 - Prob. 2.21APCh. 2 - Equity-Method Income Statement Wealthy...Ch. 2 - Consolidated Worksheet at End of the First Year of...Ch. 2 - Consolidated Worksheet at End of the Second Year...Ch. 2 - Prob. 2.25PCh. 2 - Prob. 2.26PCh. 2 - Prob. 2.27BPCh. 2 - Prob. 2.28BP
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