Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements. The amount did P pay for the shares if no goodwill and no gain on bargain purchase is reported.

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Answer 1

Question

Chapter 5, Problem 5.20P

a

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount did P pay for the shares if no goodwill and no gain on bargain purchase is reported.

b

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount P pays for the share if non-controlling interest at acquisition is $54,000 and goodwill is $40,000

c

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount non-controlling interest in consolidated balance sheet if P pays $73,200

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Summer Company holds assets with a fair value of $126,000 and a book value of $95,000 and liabilities with a book value and fair value of $24,000. Required: Compute the following amounts if Parade Corporation acquires 70 percent ownership of Summer: What amount did Parade pay for the shares if no goodwill and no gain on a bargain purchase are reported? What amount did Parade pay for the shares if the fair value of the noncontrolling interest at acquisition is $45,600 and goodwill of $50,000 is reported? What balance will be assigned to the noncontrolling interest in the consolidated balance sheet if Parade pays $87,500 to acquire its ownership and goodwill of $23,000 is reported?

Summer Company holds assets with a fair value of $122,000 and a book value of $81,000 and liabilities with a book value and fair value of $23,000. Required: Compute the following amounts if Parade Corporation acquires 70 percent ownership of Summer: What amount did Parade pay for the shares if no goodwill and no gain on a bargain purchase are reported? What amount did Parade pay for the shares if the fair value of the noncontrolling interest at acquisition is $43,200 and goodwill of $45,000 is reported?

ummer Company holds assets with a fair value of $126,000 and a book value of $95,000 and liabilities with a book value and fair value of $24,000. Required: Compute the following amounts if Parade Corporation acquires 70 percent ownership of Summer: What amount did Parade pay for the shares if the fair value of the noncontrolling interest at acquisition is $45,600 and goodwill of $50,000 is reported? What balance will be assigned to the noncontrolling interest in the consolidated balance sheet if Parade pays $87,500 to acquire its ownership and goodwill of $23,000 is reported?

Answer 2

Question

Chapter 5, Problem 5.20P

a

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount did P pay for the shares if no goodwill and no gain on bargain purchase is reported.

b

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount P pays for the share if non-controlling interest at acquisition is $54,000 and goodwill is $40,000

c

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount non-controlling interest in consolidated balance sheet if P pays $73,200

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Answer 3

Question

Chapter 5, Problem 5.20P

a

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount did P pay for the shares if no goodwill and no gain on bargain purchase is reported.

b

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount P pays for the share if non-controlling interest at acquisition is $54,000 and goodwill is $40,000

c

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount non-controlling interest in consolidated balance sheet if P pays $73,200

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Answer 4

Question

Chapter 5, Problem 5.20P

a

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount did P pay for the shares if no goodwill and no gain on bargain purchase is reported.

b

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount P pays for the share if non-controlling interest at acquisition is $54,000 and goodwill is $40,000

c

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount non-controlling interest in consolidated balance sheet if P pays $73,200

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Answer 5

Chapter 5, Problem 5.20P

a

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount did P pay for the shares if no goodwill and no gain on bargain purchase is reported.

b

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount P pays for the share if non-controlling interest at acquisition is $54,000 and goodwill is $40,000

c

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount non-controlling interest in consolidated balance sheet if P pays $73,200

Answer 6

Chapter 5, Problem 5.20P

a

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount did P pay for the shares if no goodwill and no gain on bargain purchase is reported.

Answer 7

Chapter 5, Problem 5.20P

a

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount did P pay for the shares if no goodwill and no gain on bargain purchase is reported.

Answer 8

b

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount P pays for the share if non-controlling interest at acquisition is $54,000 and goodwill is $40,000

Answer 9

b

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount P pays for the share if non-controlling interest at acquisition is $54,000 and goodwill is $40,000

Answer 10

c

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount non-controlling interest in consolidated balance sheet if P pays $73,200

Answer 11

c

To determine

Introduction: Immediately after a business combination, the parent company records income and dividends from the subsidiary using the equity method. In addition, parents must also write off a portion of the differential of the excess acquisition price. Further, all the intercompany transactions must be eliminated before the preparation of consolidated financial statements.

The amount non-controlling interest in consolidated balance sheet if P pays $73,200

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 5 - Where is the balance assigned to the...Ch. 5 - Why must a noncontrolling interest be reported in...Ch. 5 - Prob. 5.3Q Ch. 5 - Prob. 5.4Q Ch. 5 - Prob. 5.5Q Ch. 5 - Prob. 5.6Q Ch. 5 - Prob. 5.7Q Ch. 5 - Prob. 5.8Q Ch. 5 - Prob. 5.9Q Ch. 5 - Prob. 5.10Q

Solution Summary: The author explains that after a business combination, the parent company records income and dividends from the subsidiary using the equity method.

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