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: a journal entry by cost method for the investment in snoopy company in the year 2009 .

Question

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Answer 1

Question

Chapter 2, Problem 2.28BP

a.

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: a journal entry by cost method for the investment in snoopy company in the year 2009 .

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	30,000
Dividend income		30,000
Record P co. 100% share of the snoopy co. 2009 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	300,000		200,000		100,000

Income statement	P	S	Dr.	Cr.	consolidated
Sales	850,000	300,000			1,150,000
Less Cogs	(270,000)	(150,000)			(420,000)
Depreciation Exp	(50,000)	(10,000)			(60,000)
Sel. Exp	(230,000)	(60,000)			(290,000)
Dividend Income	30,000		30,000
Net income	330,000	80,000	30,000		380,000

Statement of Retain Earning	P	S	Dr.	Cr.	Consolidated
Opening balance	470,000	155,000	100,000		525,000
Net income	330,000	80,000	30,000		380,000
Less dividend declared	(225,000)	(30,000)		30,000	(225,000)
End balance	575,000	205,000	130,000	30,000	680,000

Income statement	Peanut co	Snoopy co	Eliminated DR	Eliminated CR	consolidated
Cash	230,000	75,000			305,000
Accounts received	190,000	80,000			270,000
Inventory	180,000	100,000			280,000
Investment in snoopy co	300,000			300,000	0
Land	200,000	100,000			300,000
Building and equipment	700,000	200,000		10,000	890,000
Less accumulated depreciation	500,000	30,000	10,000		520,000
Total assets	1300,000	525,000	10,000	310,000	1,525,000
Account payable	75,000	35,000			110,000
Bonds	150,000	85,000			235,000
Common stocks	500,000	200,000	200,000		500,000
Retained earnings	575,000	205,000	130,000	30,000	680,000
Total liabilities	1300,000	625,000	330,000	30,000	1,525,000

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Students have asked these similar questions

P Inc. purchased 81% of the voting shares of S Inc for $696,143 cash on January 1, year 2. P recorded Investment in S at cost. The Balance Sheet of P Inc. & S Inc. for year 5 showed the following balances P Inc. S Inc. Investment $696,143 $90,653 What is the amount for Investment on Consolidated Balance Sheet of P Inc. for year5?

Prime Company acquired 75%of the common stock of Second Company January 1, year one, for $450,000The consideration given was proportional to Second's fair value.On that date, Second had the following trial balance:account debit creditAdditional paid in capital $100,000Building (12-year life) $250,000Common stock 170,000Current assets 170,000Equipment (6-yr life) 160,000Land 110,000Liabilities (due in 4 years) 300,000Retained earnings 1/year 1 120,000Totals $690,000 $690,000During year one, Second reported net income of $60,000During year one, Sonny paid dividends of $30,000During year two, Second reported net income of $80,000During year two, Sonny paid dividends of $40,000On January 1, year one, fair values were:Land $146,000Building $262,000Equipment $184,000There was no impairment of any goodwill arising from the acquisition.Please indicate clearly which method you choose for Prime to use toaccount for its acquisition of Second Company.Problem 4. Use the data for the Prime Company…

Upper Company holds 60 percent of Lower Company’s voting shares. During the preparation of consolidated financial statements for 20x4, the following eliminating entry was made: Retained earnings, January 1 10,000 Land 10,000 Which of the following statements is correct? A. Upper Company purchased land from Lower Company during 20x4. B. Upper Company purchase land from Lower Company before January 1, 20x4. C. Lower Company purchased land from Upper Company during 20x4. D. Lower Company purchased land from Upper Company before January 1, 20x4.

Answer 2

Question

Chapter 2, Problem 2.28BP

a.

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: a journal entry by cost method for the investment in snoopy company in the year 2009 .

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	30,000
Dividend income		30,000
Record P co. 100% share of the snoopy co. 2009 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	300,000		200,000		100,000

Income statement	P	S	Dr.	Cr.	consolidated
Sales	850,000	300,000			1,150,000
Less Cogs	(270,000)	(150,000)			(420,000)
Depreciation Exp	(50,000)	(10,000)			(60,000)
Sel. Exp	(230,000)	(60,000)			(290,000)
Dividend Income	30,000		30,000
Net income	330,000	80,000	30,000		380,000

Statement of Retain Earning	P	S	Dr.	Cr.	Consolidated
Opening balance	470,000	155,000	100,000		525,000
Net income	330,000	80,000	30,000		380,000
Less dividend declared	(225,000)	(30,000)		30,000	(225,000)
End balance	575,000	205,000	130,000	30,000	680,000

Income statement	Peanut co	Snoopy co	Eliminated DR	Eliminated CR	consolidated
Cash	230,000	75,000			305,000
Accounts received	190,000	80,000			270,000
Inventory	180,000	100,000			280,000
Investment in snoopy co	300,000			300,000	0
Land	200,000	100,000			300,000
Building and equipment	700,000	200,000		10,000	890,000
Less accumulated depreciation	500,000	30,000	10,000		520,000
Total assets	1300,000	525,000	10,000	310,000	1,525,000
Account payable	75,000	35,000			110,000
Bonds	150,000	85,000			235,000
Common stocks	500,000	200,000	200,000		500,000
Retained earnings	575,000	205,000	130,000	30,000	680,000
Total liabilities	1300,000	625,000	330,000	30,000	1,525,000

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Answer 3

Question

Chapter 2, Problem 2.28BP

a.

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: a journal entry by cost method for the investment in snoopy company in the year 2009 .

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	30,000
Dividend income		30,000
Record P co. 100% share of the snoopy co. 2009 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	300,000		200,000		100,000

Income statement	P	S	Dr.	Cr.	consolidated
Sales	850,000	300,000			1,150,000
Less Cogs	(270,000)	(150,000)			(420,000)
Depreciation Exp	(50,000)	(10,000)			(60,000)
Sel. Exp	(230,000)	(60,000)			(290,000)
Dividend Income	30,000		30,000
Net income	330,000	80,000	30,000		380,000

Statement of Retain Earning	P	S	Dr.	Cr.	Consolidated
Opening balance	470,000	155,000	100,000		525,000
Net income	330,000	80,000	30,000		380,000
Less dividend declared	(225,000)	(30,000)		30,000	(225,000)
End balance	575,000	205,000	130,000	30,000	680,000

Income statement	Peanut co	Snoopy co	Eliminated DR	Eliminated CR	consolidated
Cash	230,000	75,000			305,000
Accounts received	190,000	80,000			270,000
Inventory	180,000	100,000			280,000
Investment in snoopy co	300,000			300,000	0
Land	200,000	100,000			300,000
Building and equipment	700,000	200,000		10,000	890,000
Less accumulated depreciation	500,000	30,000	10,000		520,000
Total assets	1300,000	525,000	10,000	310,000	1,525,000
Account payable	75,000	35,000			110,000
Bonds	150,000	85,000			235,000
Common stocks	500,000	200,000	200,000		500,000
Retained earnings	575,000	205,000	130,000	30,000	680,000
Total liabilities	1300,000	625,000	330,000	30,000	1,525,000

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Answer 4

Question

Chapter 2, Problem 2.28BP

a.

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: a journal entry by cost method for the investment in snoopy company in the year 2009 .

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	30,000
Dividend income		30,000
Record P co. 100% share of the snoopy co. 2009 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	300,000		200,000		100,000

Income statement	P	S	Dr.	Cr.	consolidated
Sales	850,000	300,000			1,150,000
Less Cogs	(270,000)	(150,000)			(420,000)
Depreciation Exp	(50,000)	(10,000)			(60,000)
Sel. Exp	(230,000)	(60,000)			(290,000)
Dividend Income	30,000		30,000
Net income	330,000	80,000	30,000		380,000

Statement of Retain Earning	P	S	Dr.	Cr.	Consolidated
Opening balance	470,000	155,000	100,000		525,000
Net income	330,000	80,000	30,000		380,000
Less dividend declared	(225,000)	(30,000)		30,000	(225,000)
End balance	575,000	205,000	130,000	30,000	680,000

Income statement	Peanut co	Snoopy co	Eliminated DR	Eliminated CR	consolidated
Cash	230,000	75,000			305,000
Accounts received	190,000	80,000			270,000
Inventory	180,000	100,000			280,000
Investment in snoopy co	300,000			300,000	0
Land	200,000	100,000			300,000
Building and equipment	700,000	200,000		10,000	890,000
Less accumulated depreciation	500,000	30,000	10,000		520,000
Total assets	1300,000	525,000	10,000	310,000	1,525,000
Account payable	75,000	35,000			110,000
Bonds	150,000	85,000			235,000
Common stocks	500,000	200,000	200,000		500,000
Retained earnings	575,000	205,000	130,000	30,000	680,000
Total liabilities	1300,000	625,000	330,000	30,000	1,525,000

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Answer 5

Chapter 2, Problem 2.28BP

a.

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: a journal entry by cost method for the investment in snoopy company in the year 2009 .

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	30,000
Dividend income		30,000
Record P co. 100% share of the snoopy co. 2009 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	300,000		200,000		100,000

Income statement	P	S	Dr.	Cr.	consolidated
Sales	850,000	300,000			1,150,000
Less Cogs	(270,000)	(150,000)			(420,000)
Depreciation Exp	(50,000)	(10,000)			(60,000)
Sel. Exp	(230,000)	(60,000)			(290,000)
Dividend Income	30,000		30,000
Net income	330,000	80,000	30,000		380,000

Statement of Retain Earning	P	S	Dr.	Cr.	Consolidated
Opening balance	470,000	155,000	100,000		525,000
Net income	330,000	80,000	30,000		380,000
Less dividend declared	(225,000)	(30,000)		30,000	(225,000)
End balance	575,000	205,000	130,000	30,000	680,000

Income statement	Peanut co	Snoopy co	Eliminated DR	Eliminated CR	consolidated
Cash	230,000	75,000			305,000
Accounts received	190,000	80,000			270,000
Inventory	180,000	100,000			280,000
Investment in snoopy co	300,000			300,000	0
Land	200,000	100,000			300,000
Building and equipment	700,000	200,000		10,000	890,000
Less accumulated depreciation	500,000	30,000	10,000		520,000
Total assets	1300,000	525,000	10,000	310,000	1,525,000
Account payable	75,000	35,000			110,000
Bonds	150,000	85,000			235,000
Common stocks	500,000	200,000	200,000		500,000
Retained earnings	575,000	205,000	130,000	30,000	680,000
Total liabilities	1300,000	625,000	330,000	30,000	1,525,000

Answer 6

Chapter 2, Problem 2.28BP

a.

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: a journal entry by cost method for the investment in snoopy company in the year 2009 .

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	30,000
Dividend income		30,000
Record P co. 100% share of the snoopy co. 2009 income

Answer 7

Chapter 2, Problem 2.28BP

a.

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: a journal entry by cost method for the investment in snoopy company in the year 2009 .

Answer 8

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.

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Costmethod entry on books	Debit	Credit
Cash	30,000
Dividend income		30,000
Record P co. 100% share of the snoopy co. 2009 income

Answer 13

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	300,000		200,000		100,000

Income statement	P	S	Dr.	Cr.	consolidated
Sales	850,000	300,000			1,150,000
Less Cogs	(270,000)	(150,000)			(420,000)
Depreciation Exp	(50,000)	(10,000)			(60,000)
Sel. Exp	(230,000)	(60,000)			(290,000)
Dividend Income	30,000		30,000
Net income	330,000	80,000	30,000		380,000

Statement of Retain Earning	P	S	Dr.	Cr.	Consolidated
Opening balance	470,000	155,000	100,000		525,000
Net income	330,000	80,000	30,000		380,000
Less dividend declared	(225,000)	(30,000)		30,000	(225,000)
End balance	575,000	205,000	130,000	30,000	680,000

Income statement	Peanut co	Snoopy co	Eliminated DR	Eliminated CR	consolidated
Cash	230,000	75,000			305,000
Accounts received	190,000	80,000			270,000
Inventory	180,000	100,000			280,000
Investment in snoopy co	300,000			300,000	0
Land	200,000	100,000			300,000
Building and equipment	700,000	200,000		10,000	890,000
Less accumulated depreciation	500,000	30,000	10,000		520,000
Total assets	1300,000	525,000	10,000	310,000	1,525,000
Account payable	75,000	35,000			110,000
Bonds	150,000	85,000			235,000
Common stocks	500,000	200,000	200,000		500,000
Retained earnings	575,000	205,000	130,000	30,000	680,000
Total liabilities	1300,000	625,000	330,000	30,000	1,525,000

Answer 14

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

Answer 15

b.

Expert Solution

Answer to Problem 2.28BP

The consolidate worksheet is prepared and discussed.

Answer 16

b.

Expert Solution

Answer 17

b.

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Book value calculation
	Total book value	=	Common stock	+	Retained earnings
Original book value	300,000		200,000		100,000

Income statement	P	S	Dr.	Cr.	consolidated
Sales	850,000	300,000			1,150,000
Less Cogs	(270,000)	(150,000)			(420,000)
Depreciation Exp	(50,000)	(10,000)			(60,000)
Sel. Exp	(230,000)	(60,000)			(290,000)
Dividend Income	30,000		30,000
Net income	330,000	80,000	30,000		380,000

Statement of Retain Earning	P	S	Dr.	Cr.	Consolidated
Opening balance	470,000	155,000	100,000		525,000
Net income	330,000	80,000	30,000		380,000
Less dividend declared	(225,000)	(30,000)		30,000	(225,000)
End balance	575,000	205,000	130,000	30,000	680,000

Income statement	Peanut co	Snoopy co	Eliminated DR	Eliminated CR	consolidated
Cash	230,000	75,000			305,000
Accounts received	190,000	80,000			270,000
Inventory	180,000	100,000			280,000
Investment in snoopy co	300,000			300,000	0
Land	200,000	100,000			300,000
Building and equipment	700,000	200,000		10,000	890,000
Less accumulated depreciation	500,000	30,000	10,000		520,000
Total assets	1300,000	525,000	10,000	310,000	1,525,000
Account payable	75,000	35,000			110,000
Bonds	150,000	85,000			235,000
Common stocks	500,000	200,000	200,000		500,000
Retained earnings	575,000	205,000	130,000	30,000	680,000
Total liabilities	1300,000	625,000	330,000	30,000	1,525,000

Answer 20

Ch. 2 - What types of investments in common stock normally...Ch. 2 - Prob. 2.2AQ Ch. 2 - When is equity method reporting considered...Ch. 2 - Prob. 2.4Q Ch. 2 - Prob. 2.5Q Ch. 2 - Prob. 2.6Q Ch. 2 - Prob. 2.7Q Ch. 2 - Prob. 2.8Q Ch. 2 - How does carrying securities at fair value...Ch. 2 - How does the fully adjusted equity method differ...

Solution Summary: The author explains how the consolidated balance sheet and worksheets are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

Concept explainers

Videos

Answer to Problem 2.28BP

Explanation of Solution

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

Answer to Problem 2.28BP

Explanation of Solution

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Chapter 2 Solutions

Solution Summary: The author explains how the consolidated balance sheet and worksheets are used to calculate the retained earnings and the dividend produced by the subsidiaries towards its parent company.

Concept explainers

Videos

Answer to Problem 2.28BP

Explanation of Solution

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

Answer to Problem 2.28BP

Explanation of Solution

Want to see more full solutions like this?

Chapter 2 Solutions

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