ADVANCED ACCOUNTING
13th Edition
ISBN: 9781260773033
Author: Hoyle
Publisher: MCG
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Question
Chapter 3, Problem 15P
a.
To determine
Find the balance which Company H‘s Investment in Company T account show on December 31, 2018, when the equity method is applied.
b.
To determine
Find the consolidated net income for the year ending December 31, 2018.
c.
To determine
Find the consolidated equipment balance as of December 31, 2018.
d.
To determine
Explain what adjustment is needed to the beginning of the Retained Earnings account on a December 31, 2018, consolidation worksheet if initial value or partial equity method has been used.
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Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 9,000 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $100,000. However, its equipment (with a five-year remaining life) was undervalued by $5,000 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $30,000, although no value had been recorded on Turner’s books. The customer list had an estimated remaining useful life of 10 years.The following balances come from the individual accounting records of these two companies as of December 31, 2017:The following balances come from the individual accounting records of these two companies as of December 31, 2018:a. What balance does Haynes’s Investment in Turner account show on December 31, 2018, when the equity method is applied?b. What is the consolidated net income for the year ending December 31, 2018?c.…
Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 10,000 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $100,000. However, its equipment (with a five-year remaining life) was undervalued by $5,000 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $30,000, although no value had been recorded on Turner’s books. The customer list had an estimated remaining useful life of 10 years.
The following balances come from the individual accounting records of these two companies as of December 31, 2017:
Haynes
Turner
Revenues
$(600,000)
$(230,000)
Expenses
440,000
120,000
Investment income
Not given
–0–
Dividends declared
80,000
50,000
The following balances come from the individual accounting records of these two companies as of December…
Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 10,000 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $100,000. However, its equipment (with a five-year remaining life) was undervalued by $5,000 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $30,000, although no value had been recorded on Turner’s books. The customer list had an estimated remaining useful life of 10 years.
The following balances come from the individual accounting records of these two companies as of December 31, 2017:
Haynes
Turner
Revenues
$(600,000)
$(230,000)
Expenses
440,000
120,000
Investment income
Not given
–0–
Dividends declared
80,000
50,000
The following balances come from the individual accounting records of these two companies as of December…
Chapter 3 Solutions
ADVANCED ACCOUNTING
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