Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
expand_more
expand_more
format_list_bulleted
Question
error_outline
This textbook solution is under construction.
Students have asked these similar questions
Herbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2020, for $649,000 in cash. Annual excess amortization of $19,800 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $410,000, and Rambis reported a $226,000 balance. Herbert reported internal net income of $42,500 in 2020 and $55,400 in 2021 and declared $10,000 in dividends each year. Rambis reported net income of $28,500 in 2020 and $41,400 in 2021 and declared $5,000 in dividends each year.
a. Assume that Herbert’s internal net income figures above do not include any income from the subsidiary.
If the parent uses the equity method, what is the amount reported as consolidated retained earnings on December 31, 2021?
What would be the amount of consolidated retained earnings on December 31, 2021, if the parent had applied either the initial value or partial equity method for internal accounting purposes?
b. Under each of the following situations, what is…
Herbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2020, for $592,000 in cash. Annual excess amortization of $15,700 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $408,000, and Rambis reported a $205,000 balance. Herbert reported internal net income of $45,000 in 2020 and $58,700 in 2021 and declared $10,000 in dividends each year. Rambis reported net income of $25,900 in 2020 and $39,600 in 2021 and declared $5,000 in dividends each year.
a. Assume that Herbert’s internal net income figures above do not include any income from the subsidiary.
If the parent uses the equity method, what is the amount reported as consolidated retained earnings on December 31, 2021? What would be the amount of consolidated retained earnings on December 31, 2021, if the parent had applied either the initial value or partial equity method for internal accounting purposes? Consolidated retained earnings (equity method),…
Herbert, Inc., acquired all of Rambis Company's outstanding stock on January 1, 2020, for $622,000 in cash. Annual excess
amortization of $11,300 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $465,000, an
Rambis reported a $211,000 balance. Herbert reported internal net income of $43,500 in 2020 and $56,900 in 2021 and declared
$10,000 in dividends each year. Rambis reported net income of $22,100 in 2020 and $35,500 in 2021 and declared $5,000 in
dividends each year.
a. Assume that Herbert's internal net income figures above do not include any income from the subsidiary.
• If the parent uses the equity method, what is the amount reported as consolidated retained earnings on December 31, 2021?
• What would be the amount of consolidated retained earnings on December 31, 2021, if the parent had applied either the initial
value or partial equity method for internal accounting purposes?
b. Under each of the following situations, what is…
Knowledge Booster
Similar questions
- Herbert, Inc., acquired all of Rambis Company's outstanding stock on January 1, 2020, for $599,000 in cash. Annual excessamortization of $17,000 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $486,000, andRambis reported a $220,000 balance. Herbert reported internal net income of $41,000 in 2020 and $55,600 in 2021 and declared$10,000 in dividends each year. Rambis reported net income of $27,500 in 2020 and $42,100 in 2021 and declared $5,000 individends each year.a. Assume that Herbert's internal net income figures above do not include any income from the subsidiary.• If the parent uses the equity method, what is the amount reported as consolidated retained earnings on December 31, 2021?. What would be the amount of consolidated retained earnings on December 31, 2021, if the parent had applied either the initialvalue or partial equity method for internal accounting purposes?b. Under each of the following situations, what is the…arrow_forwardHerbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2020, for $652,000 in cash. Annual excess amortization of $13,700 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $498,000, and Rambis reported a $232,000 balance. Herbert reported internal net income of $44,750 in 2020 and $58,350 in 2021 and declared $10,000 in dividends each year. Rambis reported net income of $23,300 in 2020 and $36,900 in 2021 and declared $5,000 in dividends each year. a. Assume that Herbert’s internal net income figures above do not include any income from the subsidiary. If the parent uses the equity method, what is the amount reported as consolidated retained earnings on December 31, 2021? What would be the amount of consolidated retained earnings on December 31, 2021, if the parent had applied either the initial value or partial equity method for internal accounting purposes? Equity method, initial value method and partial…arrow_forwardHerbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2017, for $574,000 in cash. Annual excess amortization of $12,000 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $400,000, and Rambis reported a $200,000 balance. Herbert reported internal net income of $40,000 in 2017 and $50,000 in 2018 and declared $10,000 in dividends each year. Rambis reported net income of $20,000 in 2017 and $30,000 in 2018 and declared $5,000 in dividends each year.a. Assume that Herbert’s internal net income figures above do not include any income from the subsidiary.• If the parent uses the equity method, what is the amount reported as consolidated retained earnings on December 31, 2017? • Would the amount of consolidated retained earnings change if the parent had applied either the initial value or partial equity method for internal accounting purposes?b. Under each of the following situations, what is the Investment in Rambis…arrow_forward
- Herbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2017, for $574,000 in cash. Annual excess amortization of $12,000 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $400,000, and Rambis reported a $200,000 balance. Herbert reported internal net income of $40,000 in 2017 and $50,000 in 2018 and declared $10,000 in dividends each year. Rambis reported net income of $20,000 in 2017 and $30,000 in 2018 and declared $5,000 in dividends each year. Assume that Herbert’s internal net income figures above do not include any income from the subsidiary. If the parent uses the equity method, what is the amount reported as consolidated retained earnings on December 31, 2018? What would be the amount of consolidated retained earnings on December 31, 2018, if the parent had applied either the initial value or partial equity method for internal accounting purposes?arrow_forwardHerbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2017, for $574,000 in cash. Annual excess amortization of $12,000 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $400,000, and Rambis reported a $200,000 balance. Herbert reported internal net income of $40,000 in 2017 and $50,000 in 2018 and declared $10,000 in dividends each year. Rambis reported net income of $20,000 in 2017 and $30,000 in 2018 and declared $5,000 in dividends each year. Assume that Herbert’s internal net income figures above do not include any income from the subsidiary. Under each of the following situations, what is the Investment in Rambis account balance on Herbert’s books on January 1, 2018? The parent uses the equity method. The parent uses the partial equity method. The parent uses the initial value method.arrow_forwardVaughn Inc. acquired all of the outstanding common stock of Roberts Co. on January 1, 2020, for $276,000. Annual amortization of $21,000 resulted from this acquisition. Vaughn reported net income of $80,000 in 2020 and $60,000 in 2021 and paid $24,000 in dividends each year. Roberts reported net income of $50,000 in 2020 and $57,000 in 2021 and paid $12,000 in dividends each year. What is the Investment in Roberts Co. balance on Vaughn's books as of December 31, 2021, if the equity method has been applied?arrow_forward
- Herbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2017, for $574,000 in cash. Annual excess amortization of $12,000 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $400,000, and Rambis reported a $200,000 balance. Herbert reported internal net income of $40,000 in 2017 and $50,000 in 2018 and declared $10,000 in dividends each year. Rambis reported net income of $20,000 in 2017 and $30,000 in 2018 and declared $5,000 in dividends each year.arrow_forwardVaughn Incorporated acquired all of the outstanding common stock of Roberts Company on January 1, 2023, for $276,000. Annual amortization of $21,000 resulted from this acquisition. Vaughn reported net income of $80,000 in 2023 and $60,000 in 2024 and paid $24,000 in dividends each year. Roberts reported net income of $50,000 in 2023 and $57,000 in 2024 and paid $12,000 in dividends each year. What is the Investment in Roberts Company balance on Vaughn's books as of December 31, 2024, if the partial equity method has been applied? Multiple Choice $317,000 is Incorrect $326,000 $359,000 $368,000 $383,000 please answer do not image.arrow_forwardOn May 31, 2021, Oriole Company paid $3,675,000 to acquire all of the common stock of Pharoah Corporation, which became a division of Oriole. Pharoah reported the following balance sheet at the time of the acquisition: Current assets $ 945,000 Current liabilities $ 630,000 Noncurrent assets 2,835,000 Long-term liabilities 525,000 Stockholder's equity 2,625,000 Total assets $3,780,000 Total liabilities and stockholder's equity $3,780,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Pharoah was $3,255,000. At December 31, 2021, Pharoah reports the following balance sheet information: Current assets $ 840,000 Noncurrent assets (including goodwill recognized in purchase) 2,520,000 Current liabilities (735,000 ) Long-term liabilities (525,000 ) Net assets $2,100,000 It is determined that the fair value of the Pharoah division is $2,310,000.…arrow_forward
- On May 31, 2021, Armstrong LTD paid $3,500,000 to acquire all of the common stock of Hall Corporation, which became a division of Armstrong. Hall reported the following balance sheet at the time of the acquisition: Current assets $ 900,000 Noncurrent assets 2,700,000 Total assets $3,600,000 Current liabilities $ 600,000 Long-term liabilities 500,000 Stockholders’ equity 2,500,000 Total liabilities and stockholders’ equity $3,600,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Hall was $3,100,000. At December 31, 2021, Hall reports the following balance sheet information: Current assets $800,000 Noncurrent assets (including goodwill recognized in purchase) 2,400,000 Current liabilities (700,000) Long-term liabilities (500,000) Net assets $2,000,000 It is…arrow_forwardOn April 1, 2024, BigBen Company acquired 35% of the shares of LittleTick, Incorporated BigBen paid $140,000 for the investment, which is $52,000 more than 35% of the book value of LittleTick's identifiable net assets. BigBen attributed $12,400 of the $52,000 difference to inventory that will be sold in the remainder of 2024, and the rest to goodwill. LittleTick recognized a total of $17,000 of net income for 2024, and paid total dividends for the year of $10,800; these dividends were issued quarterly. BigBen's investment in LittleTick will affect BigBen's 2024 net income by: Note: Round your answer to nearest whole dollar amount. Multiple Choice earnings of $2,901. a loss of $7,938. earnings of $4,463. earnings of $1,562.arrow_forwardHerbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2017, for $574,000 in cash. Annual excess amortization of $12,000 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $400,000, and Rambis reported a $200,000 balance. Herbert reported internal net income of $40,000 in 2017 and $50,000 in 2018 and declared $10,000 in dividends each year. Rambis reported net income of $20,000 in 2017 and $30,000 in 2018 and declared $5,000 in dividends each year.a. Assume that Herbert’s internal net income figures above do not include any income from the subsidiary.∙ If the parent uses the equity method, what is the amount reported as consolidated retained earnings on December 31, 2018?∙ Would the amount of consolidated retained earnings change if the parent had applied either the initial value or partial equity method for internal accounting purposes?b. Under each of the following situations, what is the Investment in Rambis…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning