Advanced Accounting With Connect Access Card
12th Edition
ISBN: 9781259283567
Author: Joe Ben Hoyle
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 6, Problem 3DYS
The FASB ASC Subtopic “Variable Interest Entities” affects thousands of business enterprises that now, as primary beneficiaries, consolidate entities that qualify as controlled VIEs. Retrieve the annual reports of one or more of the following companies (or any others you may find) that consolidate VIEs:
- The Walt Disney Company.
- General Electric.
- Allegheny Energy.
Required
Write a brief report that describes
- 1. The reasons for consolidation of the company’s VIE(s).
- 2. The effect of the consolidation of the VIE(s) on the company’s financial statements.
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The problem below is an example of a question of the CPA ‘‘Other Objective Format’’ type as it was applied to the consolidations area. A mark-sensing answer sheet was used on the exam. You may just supply the answer, which should be accompanied by calculations where appropriate. Presented below are selected amounts from the separate unconsolidated financial statements of Pero Corporation and its 90%-owned subsidiary Sean Company at December 31, 2016. Additional information follows:Additional information is as follows:1. On January 2, 2016, Pero purchased 90% of Sean’s 100,000 outstanding common stock for cash of $175,000. On that date, Sean’s stockholders’ equity equaled $150,000, and the fair values of Sean’s assets and liabilities equaled their carrying amounts. Any remaining excess is considered to be goodwill.2. On September 4, 2016, Sean paid cash dividends of $30,000.3. On December 31, 2016, Pero recorded its equity in Sean’s earnings.1. Items (a) through (c) below represent…
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…
1. what is the basis for consolidation?2. is goodwill being remeasured to fair value at each reporting period? if false, what is the correct answer?3.a. Before consolidation, entity A's retained is how much? 3.b.he consolidated earning is how much?this is the scenario for #3a and b:entity A acquired 90% interest in ENtity B on January 1, 20x1 when entity B's net assets had a fair value of 100. On December 31, 20x2, Entity B's net assets increased to 200 after adjustments for acquisition date fair values, net of depreciation.
Chapter 6 Solutions
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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