ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 3, Problem 3.23P
a.
To determine
Introduction:
The consolidated financial statements are prepared for providing a consolidated view of the financials of the company having subsidiary companies. The cash flows of all the subsidiary companies are shown as one entity in these statements.
To calculate:The amount to be paid by P to purchase shares of S.
b.
To determine
Introduction:
The consolidated financial statements are prepared for providing a consolidated view of the financials of the company having subsidiary companies. The cash flows of all the subsidiary companies are shown as one entity in these statements.
To Calculate:The non-controlling interest in the consolidated
c.
To determine
Introduction:
The consolidated financial statements are prepared for providing a consolidated view of the financials of the company having subsidiary companies. The cash flows of all the subsidiary companies are shown as one entity in these statements.
To Calculate:The consolidated net income reported in the consolidated balance sheet.
d.
To determine
Introduction:
The consolidated financial statements are prepared for providing a consolidated view of the financials of the company having subsidiary companies. The cash flows of all the subsidiary companies are shown as one entity in these statements.
To calculate:The consolidated net income reported in the consolidated balance sheet.
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Pie Corporation acquired 75 percent of Slice Company’s common stock on December 31, 20X5, at underlying book value. The book values and fair values of Slice’s assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 25 percent of the total book value of Slice. Slice provided the following trial balance data at December 31, 20X5:
Debit Credit
Cash $ 27,600
Accounts Receivable 65,650
Inventory 89,400
Buildings and Equipment
(net) 213,000
Cost of Goods Sold 105,700
Depreciation Expense 23,500
Other Operating Expenses 31,220
Dividends Declared 14,100
Accounts Payable $ 33,080
Notes Payable 113,000
Common Stock 84,600
Retained Earnings 125,000
Sales 214,490
Total Assets $ 570, Total Liabilities & Equity $170 $ 570,170
Required: a. How much did Pie pay to purchase its shares of Slice? (Round your answer to nearest whole dollar amount.)
b. If consolidated financial statements are prepared at December 31, 20X5, what amount will be assigned to…
On January 1, 20X4, Pierce Corporation acquired 90 percent of Sharp Company's voting stock, at
underlying book value. The fair value of the noncontrolling interest was equal to 10 percent of the
book value of Sharp at that date. Pierce uses the equity method in accounting for its ownership of
Sharp. On December 31, 20X4, the trial balances of the two companies are as follows:
Item
Sales
Depreciation Expense
Other Expenses
Income from Subsidiary
Net Income
Current Assets
Investment in Sharp
Depreciable Assets
Accumulated Depreciation
Current Liabilities
Long-Term Debt
Common Stock
Retained Earnings at Jan.1
20x4
Dividends Declared
Pierce Company
Debit
$30,000
100,000
$ 200,000
139,500
300,000
30,000
$799,500
Credit
$300,000
22,500
$192,500
$ 120,000
62,000
75,000
100,000
120,000
$799,500
Sharp Corporation
Debit
$25,000
60,000
$120,000
225,000
10,000
$ 440,000
Credit
$110,000
$25,000
$75,000
25,000
90,000
75,000
65,000
$440,000
Required:
Provide Basic consolidation entry and Accumulated…
On January 1, 20X4, Pierce Corporation acquired 90 percent of Sharp Company's voting stock, at underlying book value. The fair value of the
noncontrolling interest was equal to 10 percent of the book value of Sharp at that date. Pierce uses the equity method in accounting for its ownership
of Sharp. On December 31, 20X4, the trial balances of the two companies are as follows:
Item
Current Assets
Depreciable Assets
Investment in Sharp
Depreciation Expense
Other Expenses
Dividends Declared
Accumulated Depreciation
Current Liabilities
Long-Term Debt
Common Stock
Retained Earnings
Sales
Income from Subsidiary
Required:
Pierce Company
Debit
$ 200,000
300,000
139,500
30,000
100,000
30,000
$ 799,500
Credit
$ 120,000
62,000
75,000
100,000
120,000
300,000
22,500
$ 799,500
Sharp Corporation
Debit
$ 120,000
225,000
25,000
60,000
10,000
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Credit
$ 75,000
25,000
90,000
75,000
65,000
110,000
$ 440,000
1) Provide all consolidating entries required as of December 31, 20X4, to prepare…
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
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