ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 4, Problem 4.15E
a.
To determine
Introduction: Consolidation accounting is a process where the financial statement of several subsidiary companies are combined and showed in the financial statements of the parent company. When the parent company has a share of 50% or more in a subsidiary company then this method is adopted.
To prepare: Consolidation entries needed to prepare consolidation
b.
To determine
Introduction: Consolidation balance sheet is a financial statement which shows the combined liabilities & assets of subsidiary company & parent company in one single statement.
To prepare: Consolidated balance sheet.
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Students have asked these similar questions
On December 31, 20X8, Paragraph Corporation acquired 80 percent of Sentence Company's common stock for $136,000. At the
acquisition date, the book values and fair values of all of Sentence's assets and liabilities were equal. Paragraph uses the equity
method in accounting for its investment. Balance sheet information provided by the companies at December 31, 20X8, immediately
following the acquisition is as follows:
Cash
Accounts Receivable
Inventory
Fixed Assets (net)
Investment in Sentence Co.
Total Debits
Accounts Payable
Notes Payable
Common Stock
Retained Earnings
Total Credits
Assets
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$ 74,000
120,000
180,000
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Liabilities and Stockholders' Equity
350,000
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$860,000
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$ 65,000
350,000
150,000
295,000
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PARAGRAPH CORPORATION AND SUBSIDIARY
Consolidated Balance Sheet
December 31, 20X8
Required:
Prepare a consolidated balance sheet for Paragraph at December 31, 20X8.
Sentence
Company
$ 20,000…
Blank Corporation acquired 100 percent of Faith Corporation’s common stock on December 31, 20X2, for $207,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:
Item
Blank Corporation
Faith Corporation
Assets
Cash
$ 66,000
$ 36,000
Accounts Receivable
85,000
39,000
Inventory
107,000
65,000
Buildings and Equipment (net)
224,000
151,000
Investment in Faith Corporation Stock
207,000
Total Assets
$ 689,000
$ 291,000
Liabilities and Stockholders’ Equity
Accounts Payable
$ 82,000
$ 23,000
Notes Payable
142,000
61,000
Common Stock
99,000
43,000
Retained Earnings
366,000
164,000
Total Liabilities and Stockholders’ Equity
$ 689,000
$ 291,000
At the date of the business combination, the book values of Faith’s net assets and liabilities approximated fair value. Assume that Faith Corporation’s accumulated depreciation on buildings and equipment on the acquisition date was $16,000.
Required:…
LGM Motors acquired 80% of NS Service Center outstanding shares on January 1, 2022 by payingcash. The consolidated statement of financial position showed the following balances at thedate of acquisition.Consolidated Balances AmountTotal Assets 15,670,000Total Liabilities 4,575,000Total Shareholder’s Equity ?The book value of the net assets of NS Services Center is P4,500,000. The assets of NS ServiceCenter are fairly valued except for the following:• Patent on the product that is deemed worthless, P50,000.• Goodwill of P150,000.• Unrecognized identifiable R&D of P75,000.The fair value of the non-controlling interest is 705,000 and the book value of LGM’s equitybalance is P9,500,000.On December 31, 2022 the following information were provided by NS Services Center:• Net income of 400,000 was recognized.• Patents remaining useful life is 4 years.• Pre-existing goodwill presented above was impaired with a current value of 120,000.• Dividends were declared amounting to P100,000.LGM…
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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