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 6P
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Identify the appropriate answer for the given statement from the given choices.
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Choose the correct. Aceton Corporation owns 80 percent of the outstanding stock of Voctax, Inc. During the current year, Voctax made $140,000 in sales to Aceton. How does this transfer affect the consolidated statement of cash flows?a. The transaction should be included if payment has been made.b. Only 80 percent of the transfers should be included because the subsidiary made the sales.c. Because the transfers were from a subsidiary organization, the cash flows are reported as investing activities.d. Because of the intra-entity nature of the transfers, the amount is not reported in the consolidated cash flow statement.
Abrams Company is a sole proprietorship. The book value of its identifiable net assets is $400,000, and the fair value of the same net assets is $600,000. It is agreed that the business is worth $850,000. What advantage might there be for the seller if the company is exchanged for the common stock of another corporation as opposed to receiving cash? Consider both the immediate and future impact.
Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 35,000 shares of $7 par value common stock. The following information is provided on the assets and accounts payable transferred:
Â
Cost
Book Value
Fair Value
Cash
$ 32,000
$ 32,000
$ 32,000
Inventory
83,000
83,000
83,000
Land
69,000
69,000
99,000
Buildings
188,000
147,000
249,000
Equipment
95,000
74,000
123,000
Accounts Payable
58,000
58,000
58,000
Required:
Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon
Prepare the journal entry that Sollon recorded for the receipt of assets and accounts payable from Pab.
Chapter 6 Solutions
Soft Bound Version for Advanced Accounting 13th Edition
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:   Burks  Foreman Revenues $ (446,000 )  $ (346,000 ) Expenses  274,000    248,000  Gain on sale of equipment  0    (38,000 ) Equity earnings of subsidiary  (72,000 )   0  Net income $ (244,000 )  $ (136,000 ) Outstanding common shares  60,000    40,000    Additional Information Amortization expense resulting from Foreman’s excess acquisition-date fair value is $45,000 per year. Burks has convertible preferred stock outstanding. Each of these 15,000 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 $20, each warrant can be converted into a share of Foreman’s common stock. The fair value of this stock is $25 throughout the year. Burks owns none of these warrants. Foreman has convertible bonds payable…arrow_forwardCorvus Company has gained control over the operations of Glaive Corporation by acquiring 75% of its outstanding capital stock for P4,650,000. This amount includes a control premium of P225,000. Data from the balance sheets of the two entities included the following amounts as of the date of acquisition:   Corvus Company Glaive Corporation Cash                       1,012,500                          800,000 Accounts Receivable, net                       2,770,000                          675,000 Inventory                       1,600,000                       1,200,000 Land                       3,000,000                       2,400,000 Building                       6,750,000                       3,400,000 Accumulated Depreciation - Building                      (1,687,500)                     (1,700,000) Equipment                         800,000                          250,000 Accumulated Depreciation…arrow_forwardCorvus Company has gained control over the operations of Glaive Corporation by acquiring 75% of its outstanding capital stock for P4,650,000. This amount includes a control premium of P225,000. Data from the balance sheets of the two entities included the following amounts as of the date of acquisition:   Corvus Company Glaive Corporation Cash                       1,012,500                          800,000 Accounts Receivable, net                       2,770,000                          675,000 Inventory                       1,600,000                       1,200,000 Land                       3,000,000                       2,400,000 Building                       6,750,000                       3,400,000 Accumulated Depreciation - Building                      (1,687,500)                     (1,700,000) Equipment                         800,000                          250,000 Accumulated Depreciation…arrow_forward
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