ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 3, Problem 3.11E
To determine
Introduction:The consolidated
To prepare:A consolidated balance sheet for Tcorporation assuming it as variable interest entity.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Silver Enterprises has acquired All Gold Mining in a merger transaction. The following balance sheets represent the premerger book values for both firms:
Silver Enterprises
Current assets
$ 5,100
Current liabilities
$ 3,100
Other assets
1,500
Long-term debt
7,800
Net fixed assets
18,300
Equity
14,000
Total
$ 24,900
Total
$ 24,900
All Gold Mining
Current assets
$ 1,600
Current liabilities
$ 1,410
Other assets
570
Long-term debt
0
Net fixed assets
8,000
Equity
8,760
Total
$ 10,170
Total
$ 10,170
Construct the balance sheet for the new corporation assuming that the transaction is treated as a purchase of interests for accounting purposes. The market value of All Gold Mining's fixed assets is $9,250; the market values for current and other assets are the same as the book values. Assume that Silver Enterprises issues $14,500 in new long-term debt to finance the acquisition.
Current assets
Current…
If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition:
REQUIREMENTS:A. GoodwillB. Consolidated Total Assets at the date of acquisitionC. Consolidated Total Liabilities at the date of acquisitionD. Consolidated Equity at the date of acquisition
LGM Motors acquired 80% of NS Service Center outstanding shares on January 1, 2022 by payingcash. The consolidated statement of financial position showed the following balances at thedate of acquisition.Consolidated Balances AmountTotal Assets 15,670,000Total Liabilities 4,575,000Total Shareholder’s Equity ?The book value of the net assets of NS Services Center is P4,500,000. The assets of NS ServiceCenter are fairly valued except for the following:• Patent on the product that is deemed worthless, P50,000.• Goodwill of P150,000.• Unrecognized identifiable R&D of P75,000.The fair value of the non-controlling interest is 705,000 and the book value of LGM’s equitybalance is P9,500,000.On December 31, 2022 the following information were provided by NS Services Center:• Net income of 400,000 was recognized.• Patents remaining useful life is 4 years.• Pre-existing goodwill presented above was impaired with a current value of 120,000.• Dividends were declared amounting to P100,000.LGM…
Chapter 3 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 3 - What is the basic idea underlying the preparation...Ch. 3 - How might consolidated statements help an investor...Ch. 3 - Prob. 3.3QCh. 3 - Prob. 3.4QCh. 3 - Prob. 3.5QCh. 3 - Prob. 3.6QCh. 3 - Prob. 3.7QCh. 3 - Prob. 3.8QCh. 3 - Prob. 3.9QCh. 3 - Prob. 3.10Q
Ch. 3 - Prob. 3.11QCh. 3 - Prob. 3.12QCh. 3 - What is meant by indirect control? Give an...Ch. 3 - Prob. 3.14QCh. 3 - Prob. 3.15QCh. 3 - Prob. 3.16QCh. 3 - Prob. 3.17QCh. 3 - Prob. 3.18QCh. 3 - Prob. 3.1CCh. 3 - Prob. 3.2CCh. 3 - Prob. 3.1.1ECh. 3 - Prob. 3.1.2ECh. 3 - Prob. 3.1.3ECh. 3 - Prob. 3.1.4ECh. 3 - Multiple-Choice Question on Variable Interest...Ch. 3 - Multiple-Choice Question on Variable Interest...Ch. 3 - Prob. 3.2.3ECh. 3 - Prob. 3.2.4ECh. 3 - Prob. 3.3.1ECh. 3 - Prob. 3.3.2ECh. 3 - Prob. 3.3.3ECh. 3 - Prob. 3.4.1ECh. 3 - Prob. 3.4.2ECh. 3 - Prob. 3.4.3ECh. 3 - Prob. 3.4.4ECh. 3 - Balance Sheet Consolidation On January 1, 20X3,...Ch. 3 - Prob. 3.6ECh. 3 - Prob. 3.7ECh. 3 - Prob. 3.8ECh. 3 - Prob. 3.9ECh. 3 - Reporting for a Variable Interest Entity Gamble...Ch. 3 - Prob. 3.11ECh. 3 - Prob. 3.12ECh. 3 - Prob. 3.13ECh. 3 - Prob. 3.14ECh. 3 - Prob. 3.15ECh. 3 - Prob. 3.16ECh. 3 - Prob. 3.17ECh. 3 - Prob. 3.18ECh. 3 - Prob. 3.19.1PCh. 3 - Prob. 3.19.2PCh. 3 - Prob. 3.20PCh. 3 - Prob. 3.21PCh. 3 - Prob. 3.22PCh. 3 - Prob. 3.23PCh. 3 - Prob. 3.24PCh. 3 - Prob. 3.25PCh. 3 - Prob. 3.26PCh. 3 - Prob. 3.27PCh. 3 - Prob. 3.28PCh. 3 - Prob. 3.29PCh. 3 - Consolidated Worksheet at End of the First Year of...Ch. 3 - Prob. 3.31P
Knowledge Booster
Similar questions
- If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: REQUIREMENTS: Consolidated Equity at the date of acquisitionarrow_forwardIf PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: Compute for the Consolidated Equity at the date of acquisition.arrow_forwardG Company is considering the takeover of K Company whereby it will issue 8,000 common shares for all of the outstanding shares of K Company. K Company will become a wholly owned subsidiary of G Company. Prior to the acquisition, G Company had 15,000 shares outstanding, which were trading at $9.70 per share. The following information has been assembled: Current assets Plant assets (net) Current liabilities Long-term debt Common shares Retained earnings Current assets Plant assets (net) Goodwill Investment in K Company Acquisition differential Current liabilities Long-term debt Common shares Retained earnings Carrying Amount $67,500 79,000 $146,500 $ 21,900 24,500 67,000 33,100 $146,500 G Company $ $ Fair Value $57,000 89,000 $ (b) Prepare G Company's consolidated balance sheet immediately after the combination using the worksheet approach and the acquisition method. (Leave no cells blank - be certain to enter "0" wherever required. Values in the first two columns and last column (the…arrow_forward
- Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 35,000 shares of $7 par value common stock. The following information is provided on the assets and accounts payable transferred: Cost Book Value Fair Value Cash $ 32,000 $ 32,000 $ 32,000 Inventory 83,000 83,000 83,000 Land 69,000 69,000 99,000 Buildings 188,000 147,000 249,000 Equipment 95,000 74,000 123,000 Accounts Payable 58,000 58,000 58,000 Required: Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon Prepare the journal entry that Sollon recorded for the receipt of assets and accounts payable from Pab.arrow_forwardLGM Motors acquired 80% of NS Service Center outstanding shares on January 1, 2022 by paying cash. The consolidated statement of financial position showed the following balances at the date of acquisition. Consolidated Balances Amount Total Assets 15,670,000 Total Liabilities 4,575,000 Total Shareholder’s Equity ? The book value of the net assets of NS Services Center is P4,500,000. The assets of NS Service Center are fairly valued except for the following: Patent on the product that is deemed worthless, P50,000. Goodwill of P150,000. Unrecognized identifiable R&D of P75,000. The fair value of the non-controlling interest is 705,000 and the book value of LGM’s equity balance is P9,500,000. On December 31, 2022 the following information were provided by NS Services Center: Net income of 400,000 was Patents remaining useful life is 4 Pre-existing goodwill presented above was impaired with a current value of 120,000. Dividends were declared…arrow_forwardHow does joint control differ from control as applied on consolidation? Oceania Limited acquired 100% of the share capital of Broadwater Limited. Broadwater had total shareholder's equity of $500 000. The book values of Broadwater Limited's assets were: buildings $300 000, machinery $180 000. The fair values of these assets were: buildings $360 000, machinery $200 000. The tax rate is 30%. The fair value of the identifiable net assets is: a. $580 000 b. $420 000 c. $556 000 d. $444 444arrow_forward
- AAA Inc. Was merge into BBB Corp. in a combination properly accounted for as acquisition of interest. Their condensed Statement of Financial Position before the combination show: AAA Inc. ВBB Coгр. Cash 88,000 88,000 Accounts Receivable, net 500,000 420,000 1,119,600 1,040,000 Inventory 1,700,000 4,654,000 Property Plant and Equipment Patent 260,000 Accounts Payable Mortgage Payable Capital Stock, par P100 1,000,000 171,600 1,704,000 2,600,000 390,000 1,248,000 1,300,000 390,000 1,066,000 Share Premium Retained Earnings As per independent appraiser's report, BBB's assets have fair market value of P1,653,600 for current assets, P1,248,000 for plant and equipment and P338,000 for patents. BBB's liabilities are properly valued. AAA purchases BBB's net asset for P4,000,000. Compute for the consolidated asset after acquisition.arrow_forwardLGM Motors acquired 80% of NS Service Center outstanding shares on January 1, 2022 by paying cash. The consolidated statement of financial position showed the following balances at the date of acquisition. Consolidated Balances Total Assets Total Liabilities Amount 15,670,000 4,575,000 Total Shareholder's Equity The book value of the net assets of NS Services Center is P4,500,000. The assets of NS Service Center are fairly valued except for the following: • Patent on the product that is deemed worthless, P50,000. • Goodwill of P150,000. • Unrecognized identifiable R&D of P75,000. The fair value of the non-controlling interest is 705,000 and the book value of LGM's equity balance is P9,500,.000. On December 31, 2022 the following information were provided by NS Services Center: • Net income of 400,000 was recognized. • Patents remaining useful life is 4 years. • Pre-existing goodwill presented above was impaired with a current value of 120,000. • Dividends were declared amounting to…arrow_forwardAAA Inc. Was merge into BBB Corp. in a combination properly accounted for as acquisition of interest. Their condensed Statement of Financial Position before the combination show: AAA Inc. ВBB Coгp. Cash 88,000 88,000 Accounts Receivable, net Inventory Property Plant and Equipment Patent 500,000 420,000 1,700,000 1,119,600 4,654,000 1,040,000 260,000 Accounts Payable Mortgage Payable Capital Stock, par P100 1,000,000 1,704,000 171,600 1,300,000 390,000 1,066,000 2,600,000 Share Premium 390,000 1,248,000 Retained Earnings As per independent appraiser's report, BBB's assets have fair market value of P1,653,600 for current assets, P1,248,000 for plant and equipment and P338,000 for patents. BBB's liabilities are properly valued. AAA purchases BBB's net asset for P4,000,000. Compute for the consolidated asset after acquisition. Your answerarrow_forward
- Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 34,000 shares of $6 par value common stock. The following Information is provided on the assets and accounts payable transferred: Cash Inventory Land Buildings Equipment Accounts Payable Required: Cost $ 30,000 84,000 Book Value $ 30,000 Fair Value $ 30,000 84,000 84,000 71,000 71,000 101,000 175,000 141,000 242,000 98,000 71,000 114,000 59,000 59,000 59,000 a. Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon b. Prepare the journal entry that Sollon recorded for the receipt of assets and accounts payable from Pab. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon. Note: If no entry is required for a…arrow_forwardArnold Corporation holds 70 percent of Belvista, which, in turn, owns 70 percent of Stang. Separate operating income figures (excluding investment income) and intra-entity upstream gains (on assets remaining within the consolidated group) included in the income for the current year follow:What is the amount of consolidated net income attributable to the noncontrolling interests?a. $143,100b. $163,500c. $183,000d. $213,900arrow_forwardIf PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: compute for the consolidated total assets at the date of acquisitionarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
