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 journal entry on P’s book in acquisition.

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.26P

a.

To determine

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 journal entry on P’s book in acquisition.

a.

Expert Solution

Explanation of Solution

Recording the initial investment in S’ books.

Particular	Amount $	Amount $
Investment in S Dr.	270,000
Cash Cr.		270,000

b.

To determine

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

b.

Expert Solution

Explanation of Solution

Consolidated worksheet:

Book value
	NC 10%	+	P	=	Common stock	=	Retained earnings
Original book value	30,000		270,000		200,000		100,000

Balance sheet	P’s	S’s	Elimination DR	Elimination CR	consolidated
Cash	55,000	20,000			75,000
Amount received	50,000	30,000			80,000
Inventory	100,000	60,000			160,000
Investment in S	270,000			270,000	0
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	1,000,000	400,000	10,000	280,000	1,130,000
Account payable	75,000	25,000			100,000
Bonds	200,000	75,000			275,000
Common stock	500000	500000	200000	200000	500000
Retain earning	225000	100000	100000		225000
NCI in NA of S				30,000	30,000
Total liabilities	1,000,000	400,000	300,000	30,000	1,130,000

c.

To determine

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.

Expert Solution

Explanation of Solution

The Consolidated balance sheet immediately following the acquisition is as follows:

P and S
Consolidated Balance sheet
Particulars	Amount	Amount
Cash		$75,000
Accounts Receivable		$80,000
Inventory		$160,000
Land		$325,000
Building and Equipment	$890,000
Less: Accumulated Depreciation	($400,000)	$490,000
Total assets		$1,130,000
Accounts Payable		$100,000
Bonds Payable		$275,000
Common Stock		$500,000
Retained earnings		$225,000
Non-controlling interest		$30,000
Total liabilities and stock holders’ equity		$1,130,000

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Students have asked these similar questions

E 1-5 Journal entries to record an acquisition with direct costs and fair value/book value differences On January 1, Pop Corporation pays $400,000 cash and also issues 36,000 shares of $10 par common stock with a market value of $660,000 for all the outstanding common shares of Son Corporation. In addition, Pop pays $60,000 for registering and issuing the 36,000 shares and $140,000 for the other direct costs of the business combination, in which Son Corporation is dissolved. Summary balance sheet information for the companies immediately before the merger is as follows (in thousands): Pop Book Value Son Book Value Son Fair Value Cash $ 700 $ 80 $ 80 Inventories 240 160 200 Other current assets 60 40 40 Plant assets—net 520 360 560 Total assets $1,520 $640 $880 Current liabilities $ 320 $ 60 $ 60 Other liabilities 160 100 80 Common stock, $10 par 840 400…

On January 1, 20X5, Peery Company acquired 100 percent of Standard Company's common shares at underlying book value. Peery uses the equity method in accounting for its ownership of Standard. On December 31, 20X5, the trial balances of the two companies are as follows: Item Peery Company Standard Company Debit Credit Debit Credit Current Assets $ 238,000 $ 95,000 Depreciable Assets 300,000 170,000 Investment in Standard Company 100,000 Other Expenses 90,000 70,000 Depreciation Expense 30,000 17,000 Dividends Declared 32,000 10,000 Accumulated Depreciation $ 120,000 $ 85,000 Current Liabilities 50,000 30,000 Long-Term Debt 120,000 50,000 Common Stock 100,000 50,000 Retained Earnings 175,000 35,000 Sales 200,000 112,000 Income from Standard Company 25,000 $ 790,000 $ 790,000 $ 362,000 $ 362,000 Required: Prepare the consolidation entries needed as of December 31, 20X5, to complete a…

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 acquisition

Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.26P

a.

To determine

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 journal entry on P’s book in acquisition.

a.

Expert Solution

Explanation of Solution

Recording the initial investment in S’ books.

Particular	Amount $	Amount $
Investment in S Dr.	270,000
Cash Cr.		270,000

b.

To determine

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

b.

Expert Solution

Explanation of Solution

Consolidated worksheet:

Book value
	NC 10%	+	P	=	Common stock	=	Retained earnings
Original book value	30,000		270,000		200,000		100,000

Balance sheet	P’s	S’s	Elimination DR	Elimination CR	consolidated
Cash	55,000	20,000			75,000
Amount received	50,000	30,000			80,000
Inventory	100,000	60,000			160,000
Investment in S	270,000			270,000	0
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	1,000,000	400,000	10,000	280,000	1,130,000
Account payable	75,000	25,000			100,000
Bonds	200,000	75,000			275,000
Common stock	500000	500000	200000	200000	500000
Retain earning	225000	100000	100000		225000
NCI in NA of S				30,000	30,000
Total liabilities	1,000,000	400,000	300,000	30,000	1,130,000

c.

To determine

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.

Expert Solution

Explanation of Solution

The Consolidated balance sheet immediately following the acquisition is as follows:

P and S
Consolidated Balance sheet
Particulars	Amount	Amount
Cash		$75,000
Accounts Receivable		$80,000
Inventory		$160,000
Land		$325,000
Building and Equipment	$890,000
Less: Accumulated Depreciation	($400,000)	$490,000
Total assets		$1,130,000
Accounts Payable		$100,000
Bonds Payable		$275,000
Common Stock		$500,000
Retained earnings		$225,000
Non-controlling interest		$30,000
Total liabilities and stock holders’ equity		$1,130,000

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.26P

a.

To determine

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 journal entry on P’s book in acquisition.

a.

Expert Solution

Explanation of Solution

Recording the initial investment in S’ books.

Particular	Amount $	Amount $
Investment in S Dr.	270,000
Cash Cr.		270,000

b.

To determine

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

b.

Expert Solution

Explanation of Solution

Consolidated worksheet:

Book value
	NC 10%	+	P	=	Common stock	=	Retained earnings
Original book value	30,000		270,000		200,000		100,000

Balance sheet	P’s	S’s	Elimination DR	Elimination CR	consolidated
Cash	55,000	20,000			75,000
Amount received	50,000	30,000			80,000
Inventory	100,000	60,000			160,000
Investment in S	270,000			270,000	0
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	1,000,000	400,000	10,000	280,000	1,130,000
Account payable	75,000	25,000			100,000
Bonds	200,000	75,000			275,000
Common stock	500000	500000	200000	200000	500000
Retain earning	225000	100000	100000		225000
NCI in NA of S				30,000	30,000
Total liabilities	1,000,000	400,000	300,000	30,000	1,130,000

c.

To determine

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.

Expert Solution

Explanation of Solution

The Consolidated balance sheet immediately following the acquisition is as follows:

P and S
Consolidated Balance sheet
Particulars	Amount	Amount
Cash		$75,000
Accounts Receivable		$80,000
Inventory		$160,000
Land		$325,000
Building and Equipment	$890,000
Less: Accumulated Depreciation	($400,000)	$490,000
Total assets		$1,130,000
Accounts Payable		$100,000
Bonds Payable		$275,000
Common Stock		$500,000
Retained earnings		$225,000
Non-controlling interest		$30,000
Total liabilities and stock holders’ equity		$1,130,000

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.26P

a.

To determine

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 journal entry on P’s book in acquisition.

a.

Expert Solution

Explanation of Solution

Recording the initial investment in S’ books.

Particular	Amount $	Amount $
Investment in S Dr.	270,000
Cash Cr.		270,000

b.

To determine

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

b.

Expert Solution

Explanation of Solution

Consolidated worksheet:

Book value
	NC 10%	+	P	=	Common stock	=	Retained earnings
Original book value	30,000		270,000		200,000		100,000

Balance sheet	P’s	S’s	Elimination DR	Elimination CR	consolidated
Cash	55,000	20,000			75,000
Amount received	50,000	30,000			80,000
Inventory	100,000	60,000			160,000
Investment in S	270,000			270,000	0
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	1,000,000	400,000	10,000	280,000	1,130,000
Account payable	75,000	25,000			100,000
Bonds	200,000	75,000			275,000
Common stock	500000	500000	200000	200000	500000
Retain earning	225000	100000	100000		225000
NCI in NA of S				30,000	30,000
Total liabilities	1,000,000	400,000	300,000	30,000	1,130,000

c.

To determine

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.

Expert Solution

Explanation of Solution

The Consolidated balance sheet immediately following the acquisition is as follows:

P and S
Consolidated Balance sheet
Particulars	Amount	Amount
Cash		$75,000
Accounts Receivable		$80,000
Inventory		$160,000
Land		$325,000
Building and Equipment	$890,000
Less: Accumulated Depreciation	($400,000)	$490,000
Total assets		$1,130,000
Accounts Payable		$100,000
Bonds Payable		$275,000
Common Stock		$500,000
Retained earnings		$225,000
Non-controlling interest		$30,000
Total liabilities and stock holders’ equity		$1,130,000

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Answer 5

Chapter 3, Problem 3.26P

a.

To determine

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 journal entry on P’s book in acquisition.

a.

Expert Solution

Explanation of Solution

Recording the initial investment in S’ books.

Particular	Amount $	Amount $
Investment in S Dr.	270,000
Cash Cr.		270,000

b.

To determine

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

b.

Expert Solution

Explanation of Solution

Consolidated worksheet:

Book value
	NC 10%	+	P	=	Common stock	=	Retained earnings
Original book value	30,000		270,000		200,000		100,000

Balance sheet	P’s	S’s	Elimination DR	Elimination CR	consolidated
Cash	55,000	20,000			75,000
Amount received	50,000	30,000			80,000
Inventory	100,000	60,000			160,000
Investment in S	270,000			270,000	0
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	1,000,000	400,000	10,000	280,000	1,130,000
Account payable	75,000	25,000			100,000
Bonds	200,000	75,000			275,000
Common stock	500000	500000	200000	200000	500000
Retain earning	225000	100000	100000		225000
NCI in NA of S				30,000	30,000
Total liabilities	1,000,000	400,000	300,000	30,000	1,130,000

c.

To determine

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.

Expert Solution

Explanation of Solution

The Consolidated balance sheet immediately following the acquisition is as follows:

P and S
Consolidated Balance sheet
Particulars	Amount	Amount
Cash		$75,000
Accounts Receivable		$80,000
Inventory		$160,000
Land		$325,000
Building and Equipment	$890,000
Less: Accumulated Depreciation	($400,000)	$490,000
Total assets		$1,130,000
Accounts Payable		$100,000
Bonds Payable		$275,000
Common Stock		$500,000
Retained earnings		$225,000
Non-controlling interest		$30,000
Total liabilities and stock holders’ equity		$1,130,000

Answer 6

Chapter 3, Problem 3.26P

a.

To determine

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 journal entry on P’s book in acquisition.

a.

Expert Solution

Explanation of Solution

Recording the initial investment in S’ books.

Particular	Amount $	Amount $
Investment in S Dr.	270,000
Cash Cr.		270,000

Answer 7

Chapter 3, Problem 3.26P

a.

To determine

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 journal entry on P’s book in acquisition.

Answer 8

a.

Expert Solution

Explanation of Solution

Recording the initial investment in S’ books.

Particular	Amount $	Amount $
Investment in S Dr.	270,000
Cash Cr.		270,000

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

b.

To determine

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

b.

Expert Solution

Explanation of Solution

Consolidated worksheet:

Book value
	NC 10%	+	P	=	Common stock	=	Retained earnings
Original book value	30,000		270,000		200,000		100,000

Balance sheet	P’s	S’s	Elimination DR	Elimination CR	consolidated
Cash	55,000	20,000			75,000
Amount received	50,000	30,000			80,000
Inventory	100,000	60,000			160,000
Investment in S	270,000			270,000	0
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	1,000,000	400,000	10,000	280,000	1,130,000
Account payable	75,000	25,000			100,000
Bonds	200,000	75,000			275,000
Common stock	500000	500000	200000	200000	500000
Retain earning	225000	100000	100000		225000
NCI in NA of S				30,000	30,000
Total liabilities	1,000,000	400,000	300,000	30,000	1,130,000

Answer 13

b.

To determine

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

Answer 14

b.

Expert Solution

Explanation of Solution

Consolidated worksheet:

Book value
	NC 10%	+	P	=	Common stock	=	Retained earnings
Original book value	30,000		270,000		200,000		100,000

Balance sheet	P’s	S’s	Elimination DR	Elimination CR	consolidated
Cash	55,000	20,000			75,000
Amount received	50,000	30,000			80,000
Inventory	100,000	60,000			160,000
Investment in S	270,000			270,000	0
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	1,000,000	400,000	10,000	280,000	1,130,000
Account payable	75,000	25,000			100,000
Bonds	200,000	75,000			275,000
Common stock	500000	500000	200000	200000	500000
Retain earning	225000	100000	100000		225000
NCI in NA of S				30,000	30,000
Total liabilities	1,000,000	400,000	300,000	30,000	1,130,000

Answer 15

b.

Expert Solution

Answer 16

b.

Expert Solution

Answer 17

Expert Solution

Answer 18

c.

To determine

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.

Expert Solution

Explanation of Solution

The Consolidated balance sheet immediately following the acquisition is as follows:

P and S
Consolidated Balance sheet
Particulars	Amount	Amount
Cash		$75,000
Accounts Receivable		$80,000
Inventory		$160,000
Land		$325,000
Building and Equipment	$890,000
Less: Accumulated Depreciation	($400,000)	$490,000
Total assets		$1,130,000
Accounts Payable		$100,000
Bonds Payable		$275,000
Common Stock		$500,000
Retained earnings		$225,000
Non-controlling interest		$30,000
Total liabilities and stock holders’ equity		$1,130,000

Answer 19

c.

To determine

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.

Answer 20

c.

Expert Solution

Explanation of Solution

The Consolidated balance sheet immediately following the acquisition is as follows:

P and S
Consolidated Balance sheet
Particulars	Amount	Amount
Cash		$75,000
Accounts Receivable		$80,000
Inventory		$160,000
Land		$325,000
Building and Equipment	$890,000
Less: Accumulated Depreciation	($400,000)	$490,000
Total assets		$1,130,000
Accounts Payable		$100,000
Bonds Payable		$275,000
Common Stock		$500,000
Retained earnings		$225,000
Non-controlling interest		$30,000
Total liabilities and stock holders’ equity		$1,130,000

Answer 21

c.

Expert Solution

Answer 22

c.

Expert Solution

Answer 23

Expert Solution

Answer 24

Ch. 3 - What is the basic idea underlying the preparation...Ch. 3 - How might consolidated statements help an investor...Ch. 3 - Prob. 3.3Q Ch. 3 - Prob. 3.4Q Ch. 3 - Prob. 3.5Q Ch. 3 - Prob. 3.6Q Ch. 3 - Prob. 3.7Q Ch. 3 - Prob. 3.8Q Ch. 3 - Prob. 3.9Q Ch. 3 - Prob. 3.10Q

Concept explainers

Explanation of Solution

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

Explanation of Solution

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.

Explanation of Solution

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Chapter 3 Solutions

Concept explainers

Explanation of Solution

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company. The consolidate worksheet of the final values by the P’s book.

Explanation of Solution

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.

Explanation of Solution

Want to see more full solutions like this?

Chapter 3 Solutions

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

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.