Loose Leaf Advanced Accounting with Connect Access Card
12th Edition
ISBN: 9781259184741
Author: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Publisher: McGraw-Hill Education
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Chapter 6, Problem 38P
To determine
Compute basic and diluted EPS for Company B.
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The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company:
Burks ForemanRevenues . . . . $(430,000) $(330,000)Expenses . . . . . 280,000 240,000Gain on sale –0– (30,000) of equipment Equity earnings of (64,000) -0-subsidiaryNet income . . $(214,000) $(120,000)Outstanding . . . 65000 40000 Common stock
Additional Information∙ Amortization expense resulting from Foreman’s excess acquisition-date fair value is $40,000 per year.∙ Burks has convertible preferred stock outstanding. Each of these 8,000 shares is paid a dividend of $4 per year. Each share can be converted into four shares of common stock.∙ Stock warrants to buy 20,000 shares of Foreman are also outstanding. For $15, each warrant can be converted into a share of Foreman’s common stock. The fair value of this stock is $20 throughout the year. Burks owns none of these…
The following separate income statements are for Burks Company and its 80 percent-owned subsidiary, Foreman Company:
Foreman
$ (332,000)
241,000
(31,000)
Revenues
Expenses
Gain on sale of equipment
Equity earnings of subsidiary
Net income
Outstanding common shares
Additional Information
Burks
$ (400,000)
286,000
Basic
Diluted
0
(65,000)
$ (179,000)
63,000
• Amortization expense resulting from Foreman's excess acquisition-date fair value is $35,000 per year.
• Burks has convertible preferred stock outstanding. Each of these 9,000 shares is paid a dividend of $5 per year. Each share can be
converted into five shares of common stock.
• Stock warrants to buy 10,000 shares of Foreman are also outstanding. For $16, each warrant can be converted into a share of
Foreman's common stock. The fair value of this stock is $20 throughout the year. Burks owns none of these warrants.
• Foreman has convertible bonds payable that paid interest of $46,000 (after taxes) during the year. These bonds can be…
Alford Company and its 80 percent-owned subsidiary, Knight, have the following income statements for 2021:
Knight
$ (230,000)
Alford
$ (500,000)
300,000
40,000
140,000
10,000
20,000
20,000
(30,000)
(36,200)
$ (206, 200)
Revenues
Cost of goods sold
Depreciation and amortization
Other expenses
Gain on sale of equipment
Equity in earnings of Knight
Net income
0
0
$ (60,000)
Additional Information for 2021
• Intra-entity inventory transfers during the year amounted to $90,000. All intra-entity transfers were downstream from Alford to
Knight.
• Intra-entity gross profits in inventory at January 1 were $6,000, but at December 31, they are $9,000.
• Annual excess amortization expense resulting from the acquisition is $11,000.
• Knight paid dividends totaling $20,000.
• The noncontrolling interest's share of the subsidiary's income is $9,800.
. During the year, consolidated inventory rose by $11,000 while accounts receivable and accounts payable declined by $8,000 and
$6,000, respectively.
Net…
Chapter 6 Solutions
Loose Leaf Advanced Accounting with Connect Access Card
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 - Prob. 7PCh. 6 - Bens man Corporation is computing EPS. One of its...Ch. 6 - Prob. 9PCh. 6 - Prob. 10PCh. 6 - Prob. 11PCh. 6 - Prob. 12PCh. 6 - Prob. 13PCh. 6 - Prob. 14PCh. 6 - Prob. 15PCh. 6 - On January 1, Coldwater Company has a net book...Ch. 6 - Prob. 17PCh. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 20PCh. 6 - Prob. 21PCh. 6 - Prob. 22PCh. 6 - Prob. 23PCh. 6 - Prob. 24PCh. 6 - Prob. 25PCh. 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 - Prob. 36PCh. 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 - Prob. 45PCh. 6 - Prob. 46PCh. 6 - Prob. 47PCh. 6 - Prob. 48PCh. 6 - Prob. 1DYSCh. 6 - Prob. 2DYSCh. 6 - The FASB ASC Subtopic Variable Interest Entities...
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- Set out below are the draft income statements of P and its subsidiary S for the year ended 31 December 20X7. On the 1 January 20X6 P purchased 75% of the ordinary shares in S. Revenue Cost of sales and expenses Gross profit Operating expenses Profit from operations Finance costs Profit before taxation Tax Profit for the year P $000 300 (180) 120 (47) 73 73 (25) 48 "8ª6 | 8 | 8 | 5ª | 86 | ª S $000 150 (70) 80 (23) 57 55 (16) 39 During the year S sold goods to P for $20,000, making a mark up of one third. Only 20% of these goods were sold before the end of the year, the rest were still in inventory. P values non-controlling interest using the fair value method. Prepare the consolidated income statement for the year ended 31 December 20X7arrow_forwardThe following information pertains to the following 2 Questions. Assume the following facts relating to an 80% owned subsidiary company: BOY Stockholders’ Equity $1,000,000 BOY unamortized AAP 125,000 Net income of subsidiary (not including AAP amortization) 210,000 AAP amortization expense 40,000 Dividends declared and paid to noncontrolling shareholders 10,000 22. What is the net income attributable to noncontrolling interests for the year? a. $128,000 b. $136,000 c. $160,000 d. $168,000 23. What is the amount reported as noncontrolling equity at the end of the year? a. $895,200 b. $996,000 c. $1,026,000 d. $1,028,000arrow_forwardBalance sheet information for Pawn Company and its 90%-owned subsidiary, Sox Corporation, at December 31, 20X1, is summarized as follows: Pawn Sox Current assets-net $ 200,000 $ 50,000 Property, plant, and equipment-net 1,000,000 600,000 Investment in Sox 558,000 $1,758,000 $650,000 Current liabilities $ 100,000 $ 30,000 Capital stock 800,000 400,000 Retained earnings 858,000 220,000 $1,758,000 $650,000 Pawn acquired its interest in Sox for cash at book value several years ago when Sox's assets and liabilities were equal to their fair values. The consolidated balance sheet of Pawn and Sox at December 31, 20X1 will show a. Investment in Sioux, $558,000. b. Capital stock, $800,000. c. Retained earnings, $1,078,000. d. Noncontrolling interest, $65,000.arrow_forward
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