ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 4, Problem 4.16E
a.
To determine
Introduction: The entries that are prepared to eliminate the difference arising out of the transaction between the parent company and the subsidiary account to avoid the replication of account are referred to as elimination entries.
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 worksheet.
c.
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 on January 1, 20X5.
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Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $310,500 on January 1, 20X8, when the
book value of Snoopy's net assets was equal to $345,000. Peanut uses the equity method to account for investments. Trial balance
data for Peanut and Snoopy as of December 31, 20X8, follow:
Cash
Accounts Receivable
Inventory
Investment in Snoopy Company
Land
Buildings and Equipment
Cost of Goods Sold
Depreciation Expense
Selling & Administrative Expense
Dividends Declared
Accumulated Depreciation
Accounts Payable
Bonds Payable
Common Stock
Retained Earnings
Sales
Income from Snoopy Company
Total
Peanut Company
Debit
$ 174,000
181,000
211,000
353,700
206,000
707,000
187,000
41,000
220,000
89.000
$2,369,700
Credit
$450,000
63,000
188,000
492,000
313,900
789,000
73.800
$2,369,700
Snoopy Company
Debit
$ 87,000
82,000
76,000
95,000
188,000
120,000
9,000
27,000
34,000
$718,000
Credit
$18,000
48,000
69,000
196,000
149,000
238,000
0
$718,000
Required:
a. Prepare any equity…
Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $216,000. At that date, the fair
value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common
stock for $97,000. Summarized balance sheets for Split on the dates indicated are as follows:
Assets
Cash
Accounts Receivable
Inventory
Buildings & Equipment (net)
Total Assets
Liabilities & Equities
Accounts Payable
Bonds Payable
Common Stock
Retained Earnings
Total Liabilities & Equities
20X7
$ 49,000
51,000
72,000
370,000
$542,000
December 31
20X8
Balance in investment account
$ 79,000
91,000
102,000
350,000
$622,000
20X9
$ 99,000
121,000
162,000
330,000
$712,000
$ 77,000 $127,000 $167,000
105,000
105,000
105,000
155,000
155,000
155,000
205,000
235,000
285,000
$542,000
$622,000
$712,000
Split paid dividends of $22,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and…
Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $321,300 on January 1, 20X8, when the
book value of Snoopy's net assets was equal to $357,000. Peanut uses the equity method to account for investments. Trial balance
data for Peanut and Snoopy as of January 1, 20X8, follow:
Assets
Cash
Accounts Receivable
Inventory
Investment in Snoopy Company
Land
Buildings and Equipment
Accumulated Depreciation
Total Assets
Liabilities and Stockholders' Equity
Accounts Payable
Bonds Payable
Common Stock
Retained Earnings
Total Liabilities and Equity
Peanut Company Snoopy Company
$ 24,000
34,000
72,000
$ 71,000
66,000
117,000
321,300
231,000
719,000
(392,000)
$ 1,133,300
$ 66,000
195,000
481,000
391,300
$ 1,133,300
113,000
210,000
(8,000)
$ 445,000
$ 22,000
66,000
195,000
162,000
$ 445,000
Required:
a. Prepare the journal entry on Peanut's books for the acquisition of Snoopy on January 1, 20X8.
b. Prepare a consolidation worksheet on the acquisition date, January 1,…
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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