Concept explainers
a.
Introduction: Journal entries is a systematic method of recording transactions as and when they occur. It is a summary of transactions divided into the debit and credit items that are recorded chronologically. It is an act of keeping and recoding all the transactions occurring in the business.
The
a.
Explanation of Solution
Recording the initial investment in S’ books.
Particular | Amount | Amount |
Investment in S Dr. | ||
Cash Cr. |
b.
Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the
The consolidate worksheet of the final values by the P’s book.
b.
Explanation of Solution
Consolidated worksheet:
Book value | |||||||
NC | + | P | = | Common stock | = | Retained earnings | |
Original book value |
P’s | S’s | Elimination DR | Elimination CR | consolidated | |
Cash | |||||
Amount received | |||||
Inventory | |||||
Investment in S | 270,000 | ||||
Land | 225,000 | 100,000 | 325,000 | ||
Building and equipment | 700,000 | 200,000 | 10000 | 890,000 | |
Accumulated depreciation | (400,000) | (10,000) | 10000 | (400,000) | |
Total assets | |||||
Account payable | |||||
Bonds | |||||
Common stock | 500000 | 500000 | 200000 | 200000 | 500000 |
Retain earning | 225000 | 100000 | 100000 | 225000 | |
NCI in NA of S | |||||
Total liabilities |
c.
Concept Introduction:
Consolidated financial statements are financial statement maintained by entity with multiple subsidiary and division.
To Prepare:
The Consolidated balance sheet immediately following the acquisition.
c.
Explanation of Solution
The Consolidated balance sheet immediately following the acquisition is as follows:
P and S | ||
Consolidated Balance sheet | ||
Particulars | Amount | Amount |
Cash | ||
Inventory | ||
Land | ||
Building and Equipment | ||
Less: | ||
Total assets | ||
Accounts Payable | ||
Bonds Payable | ||
Common Stock | ||
Retained earnings | ||
Non-controlling interest | ||
Total liabilities and stock holders’ equity |
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Chapter 3 Solutions
LOOSE-LEAF ADVANCED FINANCIAL ACCOUNTING
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