ADVANCED ACCOUNTING-LL
13th Edition
ISBN: 9781260232486
Author: Hoyle
Publisher: MCGRAW-HILL CUSTOM PUBLISHING
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Chapter 6, Problem 40P
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
Foreman
Revenues
$
(422,000
)
$
(322,000
)
Expenses
373,000
236,000
Gain on sale of equipment
0
(26,000
)
Equity earnings of subsidiary
(63,000
)
0
Net income
$
(112,000
)
$
(112,000
)
Outstanding common shares
60,000
33,000
Additional Information
Amortization expense resulting from Foreman’s excess acquisition-date fair value is $36,000 per year.
Burks has convertible preferred stock outstanding. Each of these 6,000 shares is paid a dividend of $4 per year. Each share can be converted into four shares of common stock.
Stock warrants to buy 14,000 shares of Foreman are also outstanding. For $10, 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…
The 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. $1,028,000
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
ADVANCED ACCOUNTING-LL
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...
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- 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…arrow_forwardThe 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…arrow_forwardSet 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_forward
- Parent and its 70% owned Subsidiary report the following at December 31 of the current year: Parent Net Income, P300,000; Parent Dividends, P20,000. Subsidiary Net Income, P250,000; Subsidiary Dividends, P20,000. On January 3, of the current year, Parent sold equipment to Subsidiary with a remaining 5-year life reporting a gain on sale of P20,000. The gain is included in the net income reported by the Parent. 1. Determine the equity holders of parent’s net income and the non-controlling interest net income. 2. Determine the equity holders of parent's net income.arrow_forwardBalance sheet information for parent Company and its 90%-owned subsidiary, Sub Corporation, at December 31, 2021, is summarized as follows: Parent Sub 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 Parent acquired its interest in Sub for cash at book value several years ago when Sub's assets and liabilities were equal to their fair values. Consolidated total assets of Parent and Sub, at December 31, 2021, will be ____. a. $1,785,000 b. $1,850,000 c. $2,343,000 d. $2,408,000arrow_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. Consolidated total assets of Pawn and Sox, at December 31, 20X1, will be ____. a. $1,785,000 b. $1,850,000 c. $2,343,000 d. $2,408,000arrow_forward
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