Soft Bound Version for Advanced Accounting 13th Edition
Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260110579
Author: Hoyle
Publisher: McGraw Hill Education
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Chapter 6, Problem 47P
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Prepare a consolidated statement of cash flows for this business combination for the year ending December 31, 2018.

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Bolero Company holds 80 percent of the common stock of Rivera, Inc., and 40 percent of this subsidiary’s convertible bonds. The following consolidated financial statements are for 2017 and 2018: Additional Information for 2018  • The parent issued bonds during the year for cash. • Amortization of databases amounts to $15,000 per year. • The parent sold a building with a cost of $80,000 but a $40,000 book value for cash on May 11. • The subsidiary purchased equipment on July 23 for $205,000 in cash. • Late in November, the parent issued stock for cash. • During the year, the subsidiary paid dividends of $10,000. Both parent and subsidiary pay dividends in the same year as declared. Prepare a consolidated statement of cash flows for this business combination for the year ending December 31, 2018. (Use indirect method.)
Pam Company paid $440,000 for an 80 percent interest in Sun Company on July 1, 2016, when Sun had total equity of $220,000. Sun Company reported earnings of $20,000 for 2016 and declared dividends of $32,000 on November 1, 2016. RequiredGive the entries to record these facts on the books of Pam Company: Assuming that Pam Company uses the cost method of accounting for its subsidiaries.Assuming that Pam Company uses the equity method of accounting for its subsidiaries. (Any difference between investment cost and book value acquired is to be assigned to equipment and amortized over a 10-year period.)
Jet Corp. acquired all of the outstanding shares of Nittle Inc. on January 1, 2016, for $644,000 in cash. Of this consideration transferred, $42,000 was attributed to equipment with a ten-year remaining useful life. Goodwill of $56,000 had also been identified. Jet applied the partial equity method so that income would be accrued each period based solely on the earnings reported by the subsidiary.   On January 1, 2019, Jet reported $280,000 in bonds outstanding with a book value of $263,200. Nittle purchased half of these bonds on the open market for $135,800.   During 2019, Jet began to sell merchandise to Nittle. During that year, inventory costing $112,000 was transferred at a price of $140,000. All but $14,000 (at Jet's selling price) of these goods were resold to outside parties by year's end. Nittle still owed $50,400 for inventory shipped from Jet during December.   The following financial figures were for the two companies for the year ended December 31, 2019.       Jet…

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Soft Bound Version for Advanced Accounting 13th Edition

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