ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Question
Chapter 3, Problem 3.3.2E
To determine
Introduction:
The consolidated financial statements are those statements which are prepared for providing a consolidated view of financials of the company having subsidiary companies.
The minority interest is that portion of stock which the parent company does not hold in the subsidiary company and does not hold any controlling interest.
To choose:The correct option for the net amount that should be reported as common stock in the report of company P.
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Required information
On January 1, 20X2, Power Company acquired 80 percent of Strong Company's outstanding stock for cash. The fair value
of the noncontrolling interest was equal to a proportionate share of the book value of Strong Company's net assets at the
date of acquisition. Selected balance sheet data at December 31, 20X2 are as follows:
Total Assets
Liabilities
Common Stock
Retained Earnings
Total Liabilities & Stockholders' Equity
Multiple Choice
O
$35,200
Based on the preceding information, what amount should be reported as noncontrolling interest in net assets in Power Company's December 31, 20X2, consolidated balance sheet?
$48,200
$76,800
Power
$ 564,000
O $112,800
180,000
150,000
234,000
$ 564,000
Strong
$ 216,000
65,000
80,000
96,000
$ 241,000
Accounting
Assume that in the first step of the reorganization,
Auto Corp. will exchange $6,071,963 worth of Auto
Corp. stock plus land with a fair market value of
$2,276,714 for all of Battery Corp's assets. Auto
Corp's land had a basis of $5,761 prior to the
exchange. Battery Corp.'s assets had a basis of
$1,296,616 prior to the exchange.
Assume that in the second step of the reorganization,
Battery Corp. will distribute the $6,071,963 in Auto
Corp. stock plus the land that it just acquired from
Auto Corp. to Battery Corp.'s sole shareholder,
Sydney, in exchange for all of Sydney's shares of
Battery Corp. stock. Prior to the exchange, Sydney's
basis in her shares of Battery Corp. stock was
$3,863,473. After the exchange, Sydney will now be
a shareholder of Auto Corp. instead of Battery Corp.
What amount of gain/loss will Battery Corp.
recognize as a result of the reorganization?
Requirements
1. How much is the consolidated net
income for 2022?
2. How much is the consolidated net
income for 2023?
3. Using the proportionate method, how
much is the non-controlling interest as
December 31, 2023?
Philippians Company purchased 60% of Seth Company on January 2,
2022 for P3,930,000 when Seth's book, value was P6,300,000. On that
day, the market value of the net assets of Seth equaled their book values.
with the following exceptions:
Buildings
Equipment
Book value
P1,850,000
300,000
Market value Remaining life
P1,600,000
20 years
500,000
10 years
Seth Company reported the following for 2022 and 2023:
Net income (loss)
Dividends
P.750,000
150,000
2022
2023
P100,000
50,000
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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