ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 5, Problem 5.2.3E
To determine
Introduction: A consolidated retained earnings is a component of shareholders’ equity that shows the
The amount of consolidated retained earnings for the year ended 20X5
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b. Prepare all consolidation entries needed to prepare consolidated statements
for 20X5. Note: If no entry is required for a transaction/event, select "No journal entry
required" in the first account field.a. Prepare all journal entries that Pizza recorded
during 20×5 related to its investment in Slice. Note: If no entry is required for a
transaction/event, select "No journal entry required" in the first account field. View
transaction listPizza Corporation acquired 80 percent ownership of Slice Products Company
on January 1, 20X1, for $151,000. On that date, the fair value of the noncontrolling interest
was $37,750, and Slice reported retained earnings of $46,000 and had $95,000 of common
stock outstanding Pizza has used the equity method in accounting for its investment in
Slice. Trial balance data for the two companies on December 31, 20X5, are as follows: Item
Pizza Corporation Slice Products Company Debit Credit Debit Credit Cash and Receivables
$ 86,000 $ 67,000 Inventory 277,000…
Consolidation at the end of the first year subsequent to date of acquisition-Cost method (purchase price equals book value)
Assume the parent company acquires its subsidiary on January 1, 2019, by exchanging 20,000 shares of its $1 par value Common Stock, with a market value on the acquisition date of $50 per share, for all of the outstanding voting shares of the acquiree. You have been charged with preparing the consolidation of these two companies at the end of the
first year.
On the acquisition date, all of the subsidiary's assets and liabilities had fair values equaling their book values. The parent uses the cost method of pre-consolidation Equity investment bookkeeping. Following are financial statements of the parent and its subsidiary for the year ended December 31, 2019.
Parent Subsidiary
Parent Subsidiary
Income statement
Sales
Cost of goods sold
Gross profit
Investment income
Operating expenses
Net income
Statement of retained earnings
BOY retained earnings
Net income…
hf.
Darnell Ltd. acquired 60 percent of Tisha Co. The acquisition calls for Darnell to issue an additional 100 shares to Tisha in one year if Tisha meets a predetermined sales goal. This contingent consideration
a. should be reported only in the notes to the financial statement.
b. should be valued at its fair value as of the acquisition date.
c. should be valued at fair value as of the acquisition date and revalued at the year-end.
d. should not be reported unless the goal is met.
Chapter 5 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
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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