Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Chapter 5, Problem 5.17AE
To determine
Introduction:
Consolidation with negative
The consolidation entries required for consolidated balance sheet immediately after business combination.
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Parent Company purchases 80% of the outstanding shares of Subsidiary Company for P9,000,000. The carrying value of Subsidiary Company’s net assets at the time of acquisition was P6,000,000 and had a fair value of P8,000,000. Determine the GOODWILL arising from the consolidation if the 100,000, P50 par value shares of the subsidiary are currently selling at 90 per share.
Parent Company purchases 80% of the outstanding shares of Subsidiary Company for P9,000,000. The carrying value of SubsidiaryCompany’s net assets at the time of acquisition was P6,000,000 and had a fair value of P8,000,000. Determine the following:
1.Goodwill arising from the consolidation if the non-controlling interest is stated at fair value ofP2,000,000.2. Goodwill arising from the consolidation if the 100,000, P50 par value shares of the subsidiary arecurrently selling at 90/share.3. Assume Parent purchased 80% of Subsidiary shares for P6,300,000; determine the goodwill arisingfrom the consolidation if the non-controlling interest is stated at fair value of P2,000,000.
Purse Corporation acquired 70 percent of Scarf Corporation’s ownership on January 1, 20X8, for $140,000. At that date, Scarf reported capital stock outstanding of $120,000 and retained earnings of $80,000, and the fair value of the noncontrolling interest was equal to 30 percent of the book value of Scarf. During 20X8, Scarf reported net income of $30,000 and comprehensive income of $36,000 and paid dividends of $25,000.
Required:
Present all consolidation entries needed at December 31, 20X8, to prepare a complete set of consolidated financial statements for Purse Corporation and its subsidiary.
Chapter 5 Solutions
Advanced Financial Accounting
Ch. 5 - Where is the balance assigned to the...Ch. 5 - Why must a noncontrolling interest be reported in...Ch. 5 - Prob. 5.3QCh. 5 - Prob. 5.4QCh. 5 - Prob. 5.5QCh. 5 - Prob. 5.6QCh. 5 - Prob. 5.7QCh. 5 - Prob. 5.8QCh. 5 - Prob. 5.9QCh. 5 - Prob. 5.10Q
Ch. 5 - Under what Circumstances would a parent company...Ch. 5 - Prob. 5.12QCh. 5 - Prob. 5.13QCh. 5 - Prob. 5.14AQCh. 5 - Prob. 5.15AQCh. 5 - Consolidation Worksheet Preparation The newest...Ch. 5 - Prob. 5.2CCh. 5 - Prob. 5.3CCh. 5 - Prob. 5.4CCh. 5 - Prob. 5.5CCh. 5 - Prob. 5.1.1ECh. 5 - Prob. 5.1.2ECh. 5 - Prob. 5.1.3ECh. 5 - Prob. 5.1.4ECh. 5 - Prob. 5.2.1ECh. 5 - Prob. 5.2.2ECh. 5 - Prob. 5.2.3ECh. 5 - Prob. 5.2.4ECh. 5 - Prob. 5.2.5ECh. 5 - Prob. 5.3ECh. 5 - Prob. 5.4ECh. 5 - Balance Sheet Worksheet Problem Company owns 90...Ch. 5 - Prob. 5.6ECh. 5 - Prob. 5.7ECh. 5 - Prob. 5.8.1ECh. 5 - Prob. 5.8.2ECh. 5 - Prob. 5.8.3ECh. 5 - Prob. 5.8.4ECh. 5 - Prob. 5.8.5ECh. 5 - Prob. 5.8.6ECh. 5 - Prob. 5.8.7ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10ECh. 5 - Prob. 5.11ECh. 5 - Prob. 5.12ECh. 5 - Prob. 5.13ECh. 5 - Prob. 5.14ECh. 5 - Prob. 5.15ECh. 5 - Prob. 5.16ECh. 5 - Prob. 5.17AECh. 5 - Prob. 5.18AECh. 5 - Prob. 5.19PCh. 5 - Prob. 5.20PCh. 5 - Prob. 5.21.1PCh. 5 - Multiple-Choice Questions on Applying the Equity...Ch. 5 - Prob. 5.21.3PCh. 5 - Prob. 5.21.4PCh. 5 - Prob. 5.22PCh. 5 - Computation of Account Balances Pencil Company...Ch. 5 - Prob. 5.24PCh. 5 - Equity Entries with Differential On January 1,...Ch. 5 - Equity Entries with Differential Plug Corporation...Ch. 5 - Prob. 5.27PCh. 5 - Prob. 5.28PCh. 5 - Prob. 5.29P
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- P Company purchases 80% of the outstanding shares of S Company for P9,000,000. The carrying value of S Company's net assets at the time of acquisition was P6,000,000 and had a fair value of P8,000,000. WHAT IS THE AMOUNT OF THE: a. Goodwill arising from the consolidation if the 100,000, P50 par value shares of the subsidiary are currently selling at 90/share. b. Assume Parent purchased 80% of Subsidiary shares for P6,300,000; determine the goodwill arising from the consolidation if the non-controlling interest is stated at fair value of P2,000,000.arrow_forwardParent Company purchases 80% of the outstanding shares of Subsidiary Company for P9,000,000. The carrying value of SubsidiaryCompany’s net assets at the time of acquisition was P6,000,000 and had a fair value of P8,000,000. Determine the following: Assume Parent purchased 80% of Subsidiary shares for P6,300,000; determine the goodwill arisingfrom the consolidation if the non-controlling interest is stated at fair value of P2,000,000.arrow_forwardParent Company purchases 80% of the outstanding shares of Subsidiary Company for P9,000,000. The carrying value of Subsidiary Company’s net assets at the time of acquisition was P6,000,000 and had a fair value of P8,000,000. Determine the following: 6. Goodwill arising from the consolidation if the 100,000, P50 par value shares of the subsidiary are currently selling at 90/share.7. Assume Parent purchased 80% of Subsidiary shares for P6,300,000; determine the goodwill arising from the consolidation if the non-controlling interest is stated at fair value of P2,000,000.arrow_forward
- Date of Acquisition Consolidation Eliminating Entries, Bargain Purchase Peregrine Company acquired 80 percent of Sparrow Company’s common stock for $20,000,000 in cash; fees paid to an outside firm to estimate the earning power of Sparrow and the fair values of its properties amounted to $2,500,000. Sparrow’s equity consisted of $3,000,000 in capital stock, $25,000,000 in retained earnings, $1,500,000 in accumulated other comprehensive loss, and $500,000 in treasury stock. Book values of Sparrow’s identifiable assets and liabilities approximated their fair values except as noted below: Book value Fair value Land $1,000,000 $300,000 Other plant assets, net 6,000,000 4,000,000 Identifiable intangible assets -- 3,000,000 Assume that the fair values above have been carefully evaluated for accuracy. The fair value of the noncontrolling interest is estimated to be $4,000,000 at the date of acquisition. Required a. Calculate the gain on acquisition and prepare Peregrine’s acquisition entry.…arrow_forwardParent Company purchases 80% of the outstanding shares of Subsidiary Company for P9,000,000. The carrying value of Subsidiary Company’s net assets at the time of acquisition was P6,000,000 and had a fair value of P8,000,000. Determine the NON-CONTROLLING INTEREST arising from the consolidation if it is to be computed using the proportionate basis (or Partial Goodwill).arrow_forwardParent Company purchases 80% of the outstanding shares of Subsidiary Company for P9,000,000. The carrying value of SubsidiaryCompany’s net assets at the time of acquisition was P6,000,000 and had a fair value of P8,000,000. Determine the following:1. Goodwill arising from the consolidation if it is to be computed using the proportionate basis or “PartialGoodwill”2. Non-controlling arising from the consolidation if it is to be computed using the proportionate basis or“Partial Goodwill”3. Goodwill arising from the consolidation if it is to be computed using the full (fair value basis of“Full/Gross-up” Goodwill, assuming the cost of acquisition includes a control premium of P400,000.arrow_forward
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