ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 5, Problem 5.25P
Equity Entries with Differential
On January 1, 20X0, Pepper Corporation issued 6,000 of its $10 par value shares to acquire45 percent of the shares of Salt Manufacturing. Salt Manufacturing’s balance sheet immediatelybefore the acquisition contained the following items:
On the date of the stockacquisition, Pepper’s shares were selling a $35, and Salt Manufacturing’sbuildings and equipment had a remaining economic life of 10 year. The amount of the differential assigned to
In the two years following the stock acquisition. Salt Manufacturing reported net income of$80,000 and $50,000 and paid dividends of $20,000 and $40,000, respectively. Pepper used theequity method in accounting for its ownership of Salt Manufacturing.
Required
a. Give the entry recorded by Pepper Corporation at the time of acquisition.
b. Give the
c. What balance will be reported in Peppers investment account on December 31, 20X1?
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On January 1, 20x1, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P30 per share and par value of P20 per share. The financial statements of ABC Co. and XYZ, Inc. immediately after the acquisition are shown below:
Jan. 1, 20x1ABC Co. XYZ, Inc.Cash 20,000 10,000Accounts receivable 60,000 24,000Inventory 80,000 46,000Investment in subsidiary 150,000 Equipment 400,000 100,000Accumulated depreciation (40,000) (20,000)Total assets 670,000 160,000Accounts payable 40,000 12,000Bonds payable 60,000 -Share capital 340,000 100,000Share premium 130,000 -Retained earnings 100,000 48,000Total liabilities and equity 670,000 160,000
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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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