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 $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?

If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: REQUIREMENTS: Consolidated Equity at the date of acquisition

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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