ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 4, Problem 4.11.2E
To determine
Introduction: Consolidation is the merger or acquisition of small companies into a single large one. In financial accounting, consolidation means an aggregation of financial statements of a group company/different entities and reported at a group level.
To choose: the best option
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(a) Jessica Ltd sold inventory during the current period to its wholly-owned subsidiary, Amelie Ltd, for $15 000. These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for $8000. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriate consolidation adjustment entries are as follows:Required(i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basis the correct adjustment entry.
For the following independent situations, assume that you are the audit partner on the engagement:
1. Flora Co had acquired another company few years ago which had become a division of Flora Co.
Goodwill of $350,000 was recorded at the date of acquisition. Last year, the company has recorded
loss from goodwill impairment of $100,000. In the current year, the company carrying value of
the division was $800,000 and the recoverable amount is determined to be $900,000. Therefore,
reversal of impairment was recorded for $100,000. The company has a net income of $3m.
2. Fortune Co has 20% inventory held by Just Department Store on a consignment basis.
Confirmation request has been already sent to them after the year end. However, no reply has been
received after repeated follow-ups. The related inventory involved 6% of the total asset.
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Font Company were orders from customers on the last few…
Prant Company acquired all of Sedford Corporation's assets and liabilities on January 1, 20X2,
in a business combination. At that date, Sedford reported assets with a book value of $
639,000 and liabilities of $363, 000. Prant noted that Sedford had $41, 000 of capitalized
research and development costs on its books at the acquisition date that did not appear to be
of value. Prant also determined that patents developed by Sedford had a fair value of $
129,000 but had not been recorded by Sedford. Except for buildings and equipment, Prant
determined the fair value of all other assets and liabilities reported by Sedford approximated
the recorded amounts. In recording the transfer of assets and liabilities to its books, Prant
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If the book value of Sedford's buildings and equipment was $349,000 at the date of
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Chapter 4 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 4 - When is the carrying value of the investment...Ch. 4 - What is a differential? How is a differential...Ch. 4 - Prob. 4.3QCh. 4 - Prob. 4.4QCh. 4 - Prob. 4.5QCh. 4 - Prob. 4.6QCh. 4 - Prob. 4.7QCh. 4 - Prob. 4.8QCh. 4 - Prob. 4.9QCh. 4 - Prob. 4.10Q
Ch. 4 - Prob. 4.11QCh. 4 - What determines whether the balance assigned to...Ch. 4 - What does the termpushdown accountingmean?Ch. 4 - Under what conditions is push-down accounting...Ch. 4 - Prob. 4.15QCh. 4 - Prob. 4.2CCh. 4 - Prob. 4.3CCh. 4 - Prob. 4.4CCh. 4 - Prob. 4.1ECh. 4 - Prob. 4.2ECh. 4 - Prob. 4.3ECh. 4 - Prob. 4.4ECh. 4 - Prob. 4.5ECh. 4 - Prob. 4.6ECh. 4 - Prob. 4.7ECh. 4 - Prob. 4.8ECh. 4 - Prob. 4.9ECh. 4 - Prob. 4.10.1ECh. 4 - Prob. 4.10.2ECh. 4 - Prob. 4.10.3ECh. 4 - Prob. 4.10.4ECh. 4 - Prob. 4.10.5ECh. 4 - Prob. 4.11.1ECh. 4 - Prob. 4.11.2ECh. 4 - Prob. 4.11.3ECh. 4 - Prob. 4.11.4ECh. 4 - Prob. 4.12ECh. 4 - Prob. 4.13ECh. 4 - Prob. 4.14ECh. 4 - Prob. 4.15ECh. 4 - Prob. 4.16ECh. 4 - Prob. 4.17ECh. 4 - Prob. 4.18.1ECh. 4 - Prob. 4.18.2ECh. 4 - Prob. 4.18.3ECh. 4 - Prob. 4.18.4ECh. 4 - Prob. 4.18.5ECh. 4 - Prob. 4.18.6ECh. 4 - Prob. 4.19ECh. 4 - Prob. 4.20ECh. 4 - Prob. 4.21ECh. 4 - Prob. 4.22ECh. 4 - Prob. 4.23ECh. 4 - Prob. 4.24AECh. 4 - Prob. 4.25PCh. 4 - Prob. 4.26PCh. 4 - Prob. 4.27PCh. 4 - Consolidated Balance Sheet Powder Company spent...Ch. 4 - Prob. 4.29PCh. 4 - Prob. 4.30PCh. 4 - Prob. 4.31PCh. 4 - Prob. 4.32PCh. 4 - Prob. 4.33PCh. 4 - Prob. 4.34PCh. 4 - Prob. 4.35PCh. 4 - Prob. 4.36PCh. 4 - Prob. 4.37AP
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