Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Paar Corporation bought 100 percent of Kimmel, Inc., on January 1, 2015. On that date, Paar’s equipment (10-year remaining life) has a book value of $420,000 but a fair value of $520,000. Kimmel has equipment (10-year remaining life) with a book value of $272,000 but a fair value of $400,000. Paar uses the equity method to record its investment in Kimmel. On December 31, 2017, Paar has equipment with a book value of $294,000 but a fair value of $445,200. Kimmel has equipment with a book value of $190,400 but a fair value of $357,000. What is the consolidated balance for the Equipment account as of December 31, 2017?
$574,000
$802,200
$612,600
$484,400
Paar Corporation bought 100 percent of Kimmel, Inc., on January 1, 2015. On that date, Paar’s equipment (10-year life) has a book value of $417,500 but a fair value of $579,500. Kimmel has equipment (10-year life) with a book value of $274,000 but a fair value of $444,000. Paar uses the equity method to record its investment in Kimmel. On December 31, 2017, Paar has equipment with a book value of $292,250 but a fair value of $481,250. Kimmel has equipment with a book value of $191,800 but a fair value of $399,300. What is the consolidated balance for the Equipment account as of December 31, 2017?
Wang Acquires 100% of Chen on January 1,2010 and will operate Chen as a separate subsidairy. In the first year of operation, Chen has a net income of 70,000 and pays dividends of 50,000 and that there is $3000 of excess annual amortization associated with Chens equipment.
C. Assume Wang uses the partial equity method to account for its investment. What entries will Wang record on its books on December 31, 2010 for Chen's income, dividends and excess amortization.
D. Same as C, what consolidation worksheet entries will Wang record for Chen's income, dividends and excess amortization.
E. Assume Wang uses the cost method to account for its investment. What entries will Wang record on its books on December 31, 2010 for Chen's income, dividends and excess amortization.
F. Same as E, what consolidation worksheet entries will Wang record for Chen's income, dividends and excess amortization.
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