ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 4, Problem 4.26P
a.
To determine
Introduction: Consolidation
To calculate: Value of inventory to be reported in consolidated balance sheet.
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 calculate: Value of building & equipment to be reported in consolidated balance sheet.
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 calculate: Value of investment in S’s stock to be reported in consolidated balance sheet.
d.
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 calculate: Value of
e.
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 calculate: Value of common stock to be reported in consolidated balance sheet.
f.
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 calculate: Value of
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Accounting
On January 1, 20X1, Porta Corporation purchased Swick Company's net assets
and assigned goodwill of $81,500 to Reporting Division K. The following assets
and liabilities are assigned to Reporting Division K on the acquisition date:
Carrying Fair
Amount
Value
Cash
15,500
$ 15,500
Inventory
57,500
72,500
Equipment
185,000
205,000
Goodwill
81,500
Accounts
31,500
31,500
Payable
Required:
On December 31, 20X3, Porta must test goodwill for impairment. Determine the
amount of goodwill to be reported for Division K and the amount of goodwill
impairment to be recognized, if any, if Division K's fair value is determined to be
$355,000.
$295,000.
$275,000.
On January 1, 20X1 P Co acquired 70% ownership of S Ltd. On the acquisition date all identifiable assets and liabilities had book values equal to fair values. P uses the cost method to record its investment in S. For external reporting purposes consolidated statements are required. However, the purchase did result in the acquisition of goodwill of $55,000. During the past few years, a number of transactions have taken place:
Inter-company downstream sales during 20X5 were 120,000. An unrealized profit of 17,000 still remains in the unsold ending inventory. The beginning inventory included an unrealized profit of 11,000 related to last year’s downstream inter-company sales.
Inter-company upstream sales during 20X5 were 70,000. An unrealized profit of 8,000 remains in the unsold ending inventory. There were no inter-company upstream sales last year.
On January 3, 20X3, P sold equipment to S for 88,000. The equipment had a net book value of
$60,000 and a remaining useful life of 10…
ABC Corporation acquired 70 percent of XYZ Corporation on August 1 for P420,000. On that date, XYZ Corporation had the following book values and market values. What is the amount of purchase differential recognized on the acquisition date consolidated balance sheet with respect to plant assets.
*In good accounting form, please. Thank you!
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
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- ABC Corporation acquired 70 percent of XYZ Corporation on August 1 for P420,000. On that date, XYZ Corporation had the following book values and market values. What is the amount of purchase differential recognized on the acquisition date consolidated balance sheet with respect to plant assets.arrow_forwardSUBSEQUENT TO DATE OF ACQUISITION CHAPTER 3: CONSOLIDATION- 21. Patriotism Company purchased 70% of Strength Company on January 2, 2022 for P420,000. At that date Strength had inventory and plant assets with market values greater than book values in the amount of P50,000 and P90,000, respectively. The inventory and plant assets were assigned to have a remaining life of six months and five years, respectively. Strength Company has 2022 income and dividends of P160,000 and P60,000, respectively and 2023 income and dividends of P210,000 and P80,000, respectively. The balance of non-controlling interest account on December 31. 180,000 NU beg (420K 787. x30%.) 2023 must be: a. P223,200 b. P276,000 P169,200 с. d. P136,800 22. Jenny Company acquired 80% of the equity share capital of Smitharrow_forwardOn December 31, Year 1, P Company obtains control over the net assets of S Company by purchasing 100% of the ordinary shares of S Company. P Company paid for the purchase by issuing ordinary shares with a fair value of $44,000. In addition, P Company paid $1,000 for professional fees to facilitate the transaction. The following information has been assembled just prior to the acquisition date: Show Transcribed Text Goodwill Plant assets (net) Current assets Shareholders' equity Long-term debt Current liabilities Show Transcribed Text (i) the acquisition method (ii) the new-entity method Carrying Amount $ 80,000 50.000 $130,000 $ 75,000 25,000 30.000 3 $130,000 ü P Company 3 Fair Value $ 38,000 90,000 55,000 $ 183,000 $ 29,000 30,000 Carrying Amount $ 20.000 15,000 $35.000 $18,000 7,000 10,000 S Company $35,000 Fair Value $ 22,000 26,000 14.000 $ 62,000 $ 8,000 10,000 Required (a) Prepare a consolidated statement of financial position for P Company and calculate the debt-to-equity ratio…arrow_forward
- RR Records Inc. acquired all of DD Studios’ voting shares on January 1, 20x1, for P280,000. RR’s balance sheet immediately after the combination contained the following balances: (see image 1) DD’s balance sheet at acquisition contained the following balances: (see image 2) On the date of combination, the inventory held by DD had a fair value of P170,000, and its buildings and recording equipment had a value of P375, 000. Goodwill reported by DD resulted from a purchase of SS Enterprises in 20x1. SS was liquidated and its assets and liabilities were brought onto DD’s books. Compute the balance of Common Stock to be reported in the consolidated balance sheet immediately after the acquisition.arrow_forwardRR Records Inc. acquired all of DD Studios’ voting shares on January 1, 20x1, for P280,000. RR’s balance sheet immediately after the combination contained the following balances: (see image 1) DD’s balance sheet at acquisition contained the following balances: (see image 2) On the date of combination, the inventory held by DD had a fair value of P170,000, and its buildings and recording equipment had a value of P375, 000. Goodwill reported by DD resulted from a purchase of SS Enterprises in 20x1. SS was liquidated and its assets and liabilities were brought onto DD’s books. Compute the balance of Goodwill to be reported in the consolidated balance sheet immediately after the acquisition.arrow_forwardRR Records Inc. acquired all of DD Studios’ voting shares on January 1, 20x1, for P280,000. RR’s balance sheet immediately after the combination contained the following balances: (see image 1) DD’s balance sheet at acquisition contained the following balances: (see image 2) On the date of combination, the inventory held by DD had a fair value of P170,000, and its buildings and recording equipment had a value of P375, 000. Goodwill reported by DD resulted from a purchase of SS Enterprises in 20x1. SS was liquidated and its assets and liabilities were brought onto DD’s books. Compute the balance of Buildings and Equipment, net to be reported in the consolidated balance sheet immediately after the acquisition.arrow_forward
- RR Records Inc. acquired all of DD Studios’ voting shares on January 1, 20x1, for P280,000. RR’s balance sheet immediately after the combination contained the following balances: (see image 1) DD’s balance sheet at acquisition contained the following balances: (see image 2) On the date of combination, the inventory held by DD had a fair value of P170,000, and its buildings and recording equipment had a value of P375, 000. Goodwill reported by DD resulted from a purchase of SS Enterprises in 20x1. SS was liquidated and its assets and liabilities were brought onto DD’s books. Compute the balance of Inventory to be reported in the consolidated balance sheet immediately after the acquisition. a. compute the balance of Buildings and Equipment, net to be reported in the consolidated balance sheet immediately after the acquisition b. compute the balance of Investment in DD Stock to be reported in the consolidated balance sheet immediately after the acquisition c. compute the balance of…arrow_forwardRR Records Inc. acquired all of DD Studios’ voting shares on January 1, 20x1, for P280,000. RR’s balance sheet immediately after the combination contained the following balances: (see image 1) DD’s balance sheet at acquisition contained the following balances: (see image 2) On the date of combination, the inventory held by DD had a fair value of P170,000, and its buildings and recording equipment had a value of P375, 000. Goodwill reported by DD resulted from a purchase of SS Enterprises in 20x1. SS was liquidated and its assets and liabilities were brought onto DD’s books. Compute the balance of Investment in DD Stock to be reported in the consolidated balance sheet immediately after the acquisition.arrow_forwardRR Records Inc. acquired all of DD Studios’ voting shares on January 1, 20x1, for P280,000. RR’s balance sheet immediately after the combination contained the following balances: (see image 1) DD’s balance sheet at acquisition contained the following balances: (see image 2) On the date of combination, the inventory held by DD had a fair value of P170,000, and its buildings and recording equipment had a value of P375, 000. Goodwill reported by DD resulted from a purchase of SS Enterprises in 20x1. SS was liquidated and its assets and liabilities were brought onto DD’s books. Compute the balance of Retained Earnings to be reported in the consolidated balance sheet immediately after the acquisition.arrow_forward
- Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $97,300. At that date, the fair value of the noncontrolling interest was $41,700. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Phone Corporation Smart Corporation Cash $ 58,300 $ 22,000 Accounts Receivable 109,000 49,000 Inventory 144,000 79,000 Land 73,000 36,000 Buildings & Equipment 426,000 266,000 Less: Accumulated Depreciation (166,000) (75,000) Investment in Smart Corporation 97,300 Total Assets $ 741,600 $ 377,000 Accounts Payable $ 142,500 $ 26,000 Mortgage Payable 331,100 233,000 Common Stock 68,000 39,000 Retained Earnings 200,000 79,000 Total Liabilities & Stockholders’ Equity $ 741,600 $ 377,000 At the date of the business combination, the book values of Smart’s assets and liabilities approximated fair value except for inventory, which had a fair value of…arrow_forwardOn January 1, Parent Company acquired 90% of Subsidiary Company in exchange for 5,400 shares of P10 parcommon stock having a market value of P120,600. Parent and Subsidiary condensed balance sheet on January 1,were as follows: Using the proportionate basis or partial goodwill method, compute the following:1. The amount of goodwill on January 1:A. P 2,600 C. P 14,400B. P 3,800 D. P 25,2002. The equity holders of parent (or controlling interest) retained earnings on January 1:A. P 48,000 C. P 84,900B. P52,100 D. P 89,0003. The consolidated retained earnings on January 1:A. P 48,000 C. P 84,900B. P52,100 D. P 89,000arrow_forwardPhone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $97,300. At that date, the fair value of the noncontrolling interest was $41,700. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Phone Corporation Smart Corporation Cash $ 58,300 $ 22,000 Accounts Receivable 109,000 49,000 Inventory 144,000 79,000 Land 73,000 36,000 Buildings & Equipment 426,000 266,000 Less: Accumulated Depreciation (166,000) (75,000) Investment in Smart Corporation 97,300 Total Assets $ 741,600 $ 377,000 Accounts Payable $ 142,500 $ 26,000 Mortgage Payable 331,100 233,000 Common Stock 68,000 39,000 Retained Earnings 200,000 79,000 Total Liabilities & Stockholders’ Equity $ 741,600 $ 377,000 At the date of the business combination, the book values of Smart’s assets and liabilities approximated fair value except for inventory, which had a fair value of…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education