ADVANCED ACCOUNTING
13th Edition
ISBN: 9781260773033
Author: Hoyle
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 12P
To determine
Identify the appropriate answer for the given statement from the given choices.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Mattoon, Inc., owns 80 percent of Effingham Company. For the current year, this combined entity reported consolidated net income of $946,000. Of this amount, $906,000 was attributable
to Mattoon's controlling interest while the remaining $40,000 was attributable to the noncontrolling interest. Mattoon has 151,000 shares of common stock outstanding, and Effingham has
41,500 shares outstanding. Neither company has issued preferred shares or has any convertible securities outstanding. On the face of the consolidated income statement, how much should
be reported as Mattoon's earnings per share?
Multiple Choice
O
O
$4.87.
$6.00.
$6.26.
$4.91.
Mattoon, Inc., owns 80 percent of Effingham Company. For the current year, this combined entity reported consolidated net income of $500,000. Of this amount $465,000 was attributable to Mattoon’s controlling interest while the remaining $35,000 was attributable to the noncontrolling interest. Mattoon has 100,000 shares of common stock outstanding and Effingham has 25,000 shares outstanding.Neither company has issued preferred shares or has any convertible securities outstanding. On the face of the consolidated income statement, how much should be reported as Mattoon’s earnings per share?a. $5.00b. $4.65c. $4.00d. $3.88
Arryn, Inc., owns 95 percent of Stark Corporation’s voting stock. The acquisition price exceeded book and fair value by $85,500 which was appropriately attributed to goodwill. Stark holds 15 percent of Arryn’s voting stock. The price paid for the shares by Stark equaled 15 percent of the parent’s book value and the net fair values of its assets and liabilities. During the current year, Arryn reported separate operating income of $228,000 and dividend income from Stark of $52,500. At the same time, Stark reported separate operating income of $78,000 and dividend income from Arryn of $18,000.What is the net income attributable to the noncontrolling interest under the treasury stock approach?a. $4,800b. $2,700c. $24,600d. $26,700
Chapter 6 Solutions
ADVANCED ACCOUNTING
Ch. 6 - Prob. 1QCh. 6 - Prob. 2QCh. 6 - When is a firm required to consolidate the...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - How do noncontrolling interest balances affect the...Ch. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Prob. 17QCh. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Problems 7 and 8 are based on the following...Ch. 6 - Prob. 8PCh. 6 - Bens man Corporation is computing EPS. One of its...Ch. 6 - Prob. 10PCh. 6 - Prob. 11PCh. 6 - Prob. 12PCh. 6 - Prob. 13PCh. 6 - Prob. 14PCh. 6 - Prob. 15PCh. 6 - Prob. 16PCh. 6 - On January 1, Coldwater Company has a net book...Ch. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 20PCh. 6 - On January 1, 2018, Stamford issues 10,000...Ch. 6 - On January 1, 2018, Stamford reacquires 8,000 of...Ch. 6 - Prob. 23PCh. 6 - Prob. 24PCh. 6 - On December 31, 2017. PanTech Company invests...Ch. 6 - Prob. 26PCh. 6 - Prob. 27PCh. 6 - Prob. 28PCh. 6 - Prob. 29PCh. 6 - Prob. 30PCh. 6 - Prob. 31PCh. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - Prob. 35PCh. 6 - Alford Company and its 80 percentowned subsidiary,...Ch. 6 - Prob. 37PCh. 6 - Prob. 38PCh. 6 - Prob. 39PCh. 6 - Prob. 40PCh. 6 - Prob. 41PCh. 6 - Prob. 42PCh. 6 - Prob. 43PCh. 6 - Prob. 44PCh. 6 - Fred, Inc., and Herman Corporation formed a...Ch. 6 - Prob. 46PCh. 6 - Prob. 47PCh. 6 - Prob. 48PCh. 6 - Prob. 49PCh. 6 - Prob. 50PCh. 6 - Prob. 1DYSCh. 6 - Prob. 2DYSCh. 6 - The FASB ASC Subtopic Variable Interest Entities...
Knowledge Booster
Similar questions
- Choose the correct. Mattoon, Inc., owns 80 percent of Effingham Company. For the current year, this combined entity reported consolidated net income of $500,000. Of this amount $465,000 was attributable to Mattoon’s controlling interest while the remaining $35,000 was attributable to the noncontrolling interest. Mattoon has 100,000 shares of common stock outstanding and Effingham has 25,000 shares outstanding. Neither company has issued preferred shares or has any convertible securities outstanding. On the face of the consolidated income statement, how much should be reported as Mattoon’s earnings per share?a. $5.00b. $4.65c. $4.00d. $3.88arrow_forwardStick Corporation is a wholly owned subsidiary of Point Corporation. Point acquired ownership of Stick on January 1, 20X3, for $28,000 above Stick's reported net assets. At that date, Stick reported common stock outstanding of $60,000 and retained earnings of $90,000. The differential is assigned to equipment with an economic life of seven years at the date of the business combination. Stick reported net income of $30,000 and paid dividends of $12,000 in 20X3. Required: a. Prepare the journal entries recorded by Point Corporation during 20X3 on its books if Point accounts for its investment in Stick using the equity method. b. Prepare the consolidating entries needed at December 31, 20X3, to prepare consolidated financial statements. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the journal entries recorded by Point Corporation during 20X3 on its books if Point accounts for its investment in Stick using the equity method. Note: If no…arrow_forwardDewey Corporation owns 30 percent of the common stock of Jimm Company, which it purchased at underlying book value on January 1, 20X5. Dewey reported a balance of $245,000 for its investment in Jimm Company on January 1, 20X5, and $276,800 at December 31, 20X5. During 20X5, Dewey and Jimm Company reported operating income of $340,000 and $70,000, respectively. Jimm received dividends from investments in marketable equity securities in the amount of $7,000 during 20X5. It also reported an increase of $18,000 in its portfolio of securities that were carried; fair value, and a gain in the fair value of derivative contracts that were appropriately designated as cash flow hedges; hence this gain was reported in Other Comprehensive Income (OCI). Jimm paid dividends of $20,000 in 20X5. Ignore income taxes in determining your solution. Required: Assuming that Dewey uses the equity method in accounting for its investment in Jimm, compute the amount of income from Jimm recorded by Dewey in…arrow_forward
- Presented below are two independent situations: (a) Sandhill Inc. acquired 10% of the 420,000 shares of common stock of Schuberger Corporation at a total cost of $15 per share on June 17, 2022. On September 3, Schuberger declared and paid a $120,000 dividend. On December 31, Schuberger reported net income of $520,000 for the year. (b) Blue Corporation obtained significant influence over Hunsaker Company by buying 30% of Hunsaker’s 120,000 outstanding shares of common stock at a cost of $18 per share on January 1, 2022. On May 15, Hunsaker declared and paid a cash dividend of $120,000. On December 31, Hunsaker reported net income of $220,000 for the year. Prepare all necessary journal entries for 2022 for (a) Sandhill and (b) Blue. (List all debit entries before credit entries. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record entries…arrow_forwardOn January 1, Stanton Company buys 10 percent of the outstanding shares of its parent, ProMart, Inc. Although the total book and fair values of ProMart's net assets equaled $4 million, the price paid for these shares was $420,000. During the year, ProMart reported $510,000 of separate operating income (no subsidiary income was included) and declared dividends of $140,000. How are the shares of the parent owned by the subsidiary reported at December 31? Please dont give solution image basedarrow_forwardServer Corporation is a majority-owned subsidiary of Proxy Corporation. Proxy acquired 75 percent ownership on January 1, 20X3, for $133,500. At that date, Server reported common stock outstanding of $60,000 and retained earnings of $90,000, and the fair value of the noncontrolling interest was $44,500. The differential is assigned to equipment, which had a fair value $28,000 more than book value and a remaining economic life of seven years at the date of the business combination. Server reported net income of $30,000 and paid dividends of $12,000 in 20X3.Required:a. Prepare the journal entries recorded by Proxy during 20X3 on its books if it accounts for its investment in Server using the equity method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) b. Prepare the consolidation entries needed at December 31, 20X3, to prepare consolidated financial statements. (If no entry is required for a transaction/event, select "No…arrow_forward
- Digery Inc. and Braggety Inc. are two arm’s length corporations who plan to amalgamate. Each corporation has only common shares outstanding. The common shares of Digery have a PUC and ACB of $600 and the company is worth approximately $20,000. Braggety Inc. common shares have a PUC and ACB of $1,200 and the company is worth approximately $80,000. If 200 common shares of the amalgamated company are issued, how many will Braggety’s shareholders receive on amalgamation? What will be the ACB of the shares received by Braggety’s shareholders?arrow_forwardFlorrick Co. owns 85% of Bishop Inc. The two companies file a consolidated income tax return and Florrick uses the initial value method to account for the investment. The following information is available from the two companies' financial statements: Separate operating income (excludes equity or dividend income from subsidiary) Net intra-entity gains on assets remaining in the consolidated entity in current year income 60,000 (included in separate operating income above) Dividends received from Bishop Inc. (not included in separate operating income above) Dividends paid The income tax rate was 40%. O $12,280 $12,625 What was the net income attributable to the noncontrolling interest, assuming that the separate return method was used to assign the income tax expense? O $10,575 Florrick Co. Bishop Inc. $500,000 $125,000 20,000 $31,250 O $6,750 28,000 120,000 50,000 -0-arrow_forwardClinton Ltd acquired 20% of and significant influence over the operations of Lee Ltd on 1 July 20X0. At that date, the equity of Lee Ltd comprised retained profits of $800,000 and paid up capital of $3,000,000. During the financial year ended 30 June 20X1, Lee Ltd paid a final dividend of $300,000 out of profits earned in the year ended 30 June 20X1. Clinton Ltd does not control any entities. What is the journal entry to record these dividends for Clinton Ltd for the year ended 30 June 20X1 under equity accounting? Note that the reclassification method/approach is used. Select one: A. Accounts Debit $ Credit $ Bank 300,000 Dividend revenue 300,000 ... B. Accounts Debit $ Credit $ Bank 60,000 Investment in Lee 60,000 ... C. Accounts Debit $ Credit $ Bank 60,000 Dividend revenue…arrow_forward
- Dane, Inc., owns Carlton Corporation. For the current year, Dane reports net income (without consideration of its investment in Carlton) of $185,000 and the subsidiary reports $105,000. The parent had a bond payable outstanding on January 1, with a carrying amount of $209,000. The subsidiary acquired the bond on that date for $196,000. During the current year, Dane reported interest expense of $18,000 while Carlton reported interest income of $19,000, both related to the intra-entity bond payable. What is consolidated net income?a. $289,000b. $291,000c. $302,000d. $304,000arrow_forwardOn January 1, 20x1, ABC Corporation purchased all of XYZ Corporation's common stock for $1,200,000. On that date, the fair values of XYZ's assets and liabilities equaled their carrying amounts of $1,320,000 and $320,000, respectively. During year 1, XYZ paid cash dividends of $20,000. Selected information from the separate balance sheets and income statements of ABC and XYZ as of December 31, year 1, and for the year then ended follows: ABC Corporation (Column 1), XYZ Corporation (Column 2) In ABC's December 31, year 1 consolidated balance sheet, what amount should be reported as total retained earnings?arrow_forwardOn January 1, 20x1, ABC Corporation purchased all of XYZ Corporation's common stock for $1,200,000. On that date, the fair values of XYZ's assets and liabilities equaled their carrying amounts of $1,320,000 and $320,000, respectively. During year 1, XYZ paid cash dividends of $20,000. Selected information from the separate balance sheets and income statements of ABC and XYZ as of December 31, year 1, and for the year then ended follows: ABC Corporation (Column 1), XYZ Corporation (Column 2) REQUIRED: In ABC's December 31, year 1 consolidated balance sheet, what amount should be reported as total retained earnings?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education