Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260110579
Author: Hoyle
Publisher: McGraw Hill Education
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 6, Problem 7P
Problems 7 and 8 are based on the following information.
Comparative consolidated balance sheet data for Iverson, Inc., and its 80 percent–owned subsidiary Oakley Co. follow:
2018 | 2017 | ||
Cash | $ 7,000 | $ 20,000 | |
55,000 | 38,000 | ||
Merchandise inventory | 85,000 | 45,000 | |
Buildings and equipment (net) | 95,000 | 105,000 | |
Trademark | 85,000 | 100,000 | |
Totals | $327,000 | $308,000 | |
Accounts payable | $ 75,000 | $ 63,000 | |
Notes payable, long-term | –0– | 25,000 | |
Noncontrolling interest | 39,000 | 35,000 | |
Common stock, $10 par | 200,000 | 200,000 | |
13,000 | (15,000) | ||
Totals | $327,000 | $308,000 |
Additional Information for Fiscal Year 2018
- Iverson and Oakley’s consolidated net income was $45,000.
- Oakley paid $5,000 in dividends during the year. Iverson paid $12,000 in dividends.
- Oakley sold $11,000 worth of merchandise to Iverson during the year.
- There were no purchases or sales of long-term assets during the year.
In the 2018 consolidated statement of cash flows for Iverson Company:
7. Net cash flows from operating activities were
a. $12,000
b. $20,000
c. $24,000
d. $25,000
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Problems 7 and 8 are based on the following information.Comparative consolidated balance sheet data for Iverson, Inc., and its 80 percent–owned subsidiary Oakley Co. follow:Additional Information for Fiscal Year 2018• Iverson and Oakley’s consolidated net income was $45,000.• Oakley paid $5,000 in dividends during the year. Iverson paid $12,000 in dividends.• Oakley sold $11,000 worth of merchandise to Iverson during the year.• There were no purchases or sales of long-term assets during the year.In the 2018 consolidated statement of cash flows for Iverson Company:Net cash flows from operating activities werea. $12,000b. $20,000c. $24,000d. $25,000
Problems 7 and 8 are based on the following information.Comparative consolidated balance sheet data for Iverson, Inc., and its 80 percent–owned subsidiary Oakley Co. follow:Additional Information for Fiscal Year 2018• Iverson and Oakley’s consolidated net income was $45,000.• Oakley paid $5,000 in dividends during the year. Iverson paid $12,000 in dividends.• Oakley sold $11,000 worth of merchandise to Iverson during the year.• There were no purchases or sales of long-term assets during the year.In the 2018 consolidated statement of cash flows for Iverson Company:Net cash flows from financing activities werea. $(25,000)b. $(37,000)c. $(38,000)d. $(42,000)
The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are as follows:
BALANCE SHEETS
December 31, 2017
Patrick
Sean
Cash
$
72,000
$
72,000
Accounts receivable (net)
130,000
24,000
Inventories
80,000
50,000
Plant and equipment (net)
634,000
268,000
Investment in Sean
472,000
-
Total assets
$
1,388,000
$
414,000
Accounts payable
160,000
90,000
Long-term debt
100,000
24,000
Common stock ($10 par)
340,000
62,000
Additional paid-in capital
10,000
Retained earnings
788,000
228,000
Total liabilities and shareholders' equity
$
1,388,000
$
414,000
Additional Information:
On December 31, 2017, Patrick acquired 100 percent of Sean’s voting stock in exchange for $472,000.
At the acquisition date, the fair values of Sean’s assets and liabilities equaled their carrying amounts,…
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...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Use the following consolidated balance sheet for Campbell Soup Company annual report. CAMPBELL SOUP COMPANY Consolidated Balance Sheets (Millions, except per share amounts) July 31, 2016 Current assets Cash and cash equivalents $ 296 Accounts receivable, net 626 Inventories 940 Other current assets 46 Total current assets 1,908 Plant assets, net of depreciation 2,407 Goodwill 2,263 Other intangible assets, net of amortization 1,152 Other assets ($34 as of 2016 attributable to variable interest entity) 107 Total assets $ 7,837 Current liabilities Short-term borrowings $ 1,219 Payable to suppliers and others 610 Accrued liabilities 604 Dividend payable 100 Accrued income taxes 22 Total current liabilities 2,555 Long-term debt 2,314 Deferred taxes 396 Other liabilities 1,039…arrow_forwardSolve the following questions:The following information was derived from the 2017 consolidated financial statements of Parents Co.,which owns 80% of AAA Co. as well as 40% of BBB Co.:Equity Earnings from BBB Co. $120,000Decrease in Accounts Payable $5,000Increase in Accounts Receivable $10,000Increase in Inventory $20,000Increase in Bonds Payable $40,000Depreciation $20,000Loss on sale of machinery $10,000Carrying value of machinery sold $60,000Dividends received from BBB Co. $10,000Purchase of a building for cash $400,000Goodwill impairment loss $5,000Entity Net Income allocated to non-controlling interest $5,000Consolidated net income allocated to Parent $950,000Dividends paid by Parents Co. $40,000Dividends paid by AAA Co. $12,000The cash balance at the start of 2017 was $200,000.Required:Prepare the consolidated statement of cash flows for Parents Co. for the year ended December 31,2017arrow_forwardSelected information from the separate and consolidated income statements of Poster Corporation and its subsidiary, Sign Company for the year ended December 31, 20x2 are as follows: Poster Corp. Sign Co. Consolidated Sales P 600,000 P 420,000 P 924,000 Cost of Goods Sold 450,000 335,000 693,000 Gross Profit P 150,000 P 85,000 P 231,000 During 2025, Poster Corporation sold goods to Sign Company at the same mark-up on cost that Poster uses for all sales. At December 31, 20x2, Sign had not paid all of these goods and still held 25% of them in inventory. What is the amount of intercompany sale of inventor?arrow_forward
- Up and its 80 percent–owned subsidiary (Down) reported the following figures for the year ending December 31, 2018. Down paid dividends of $30,000 during this period. UP DOWN Sales $(600000) $(300000) Cost of goods sold 300000 140000 Operating expenses 174000 60000 Dividend Income (24000) -0- Net income $(150000) $(100000) In 2017, intra-entity gross profits of $30,000 on upstream transfers of $90,000 were deferred into 2018. In 2018, intra-entity gross profits of $40,000 on upstream transfers of $110,000 were deferred into 2019.a. What amounts appear for each line in a consolidated income statement? Explain your computations.b. What income tax expense should appear on the consolidated income statement if each company files a separate return? Assume that the tax rate is 30 percent.arrow_forwardThe separate condensed balance sheets of Patrick Corporation and its wholly-owned subsidiary, Sean Corporation, are as follows: BALANCE SHEETS December 31, 2020 Patrick Sean Cash $ 80,000 $ 42,000 Accounts receivable (net) 140,000 28,000 Inventories 86,000 60,000 Plant and equipment (net) 640,000 278,000 Investment in Sean 454,000 - Total assets $ 1,400,000 $ 408,000 Accounts payable 172,000 86,000 Long-term debt 100,000 26,000 Common stock ($10 par) 306,000 70,000 Additional paid-in capital 14,000 Retained earnings 822,000 212,000 Total liabilities and shareholders' equity $ 1,400,000 $ 408,000 Additional Information: On December 31, 2020, Patrick acquired 100 percent of Sean’s voting stock in exchange for $454,000. At the acquisition date, the fair values of Sean’s assets and liabilities equaled their carrying amounts, respectively, except that the fair value of certain items in Sean’s inventory were…arrow_forwardThe separate condensed balance sheets of Patrick Corporation and its wholly-owned subsidiary, Sean Corporation, are as follows: BALANCE SHEETS December 31, 2020 Patrick Sean Cash $ 74,000 $ 76,000 Accounts receivable (net) 130,000 38,000 Inventories 86,000 54,000 Plant and equipment (net) 626,000 274,000 Investment in Sean 456,000 - Total assets $ 1,372,000 $ 442,000 Accounts payable 178,000 80,000 Long-term debt 110,000 26,000 Common stock ($10 par) 322,000 46,000 Additional paid-in capital 12,000 Retained earnings 762,000 278,000 Total liabilities and shareholders' equity $ 1,372,000 $ 442,000 Additional Information: On December 31, 2020, Patrick acquired 100 percent of Sean’s voting stock in exchange for $456,000. At the acquisition date, the fair values of Sean’s assets and liabilities equaled their carrying amounts, respectively, except that the fair value of certain items in Sean’s inventory were…arrow_forward
- The following is the balance sheet of Sameed Brothers Corporation (000s omitted). Sameed Brothers CorporationBalance SheetDecember 31, 2020 Assets Current assets Cash $26,000 Marketable securities 18,000 Accounts receivable 25,000 Inventory 20,000 Supplies 4,000 Stock investment in subsidiary company 20,000 $113,000 Investments Treasury stock 25,000 Property, plant, and equipment Buildings and land 91,000 Less: Reserve for depreciation 31,000 60,000 Other assets Cash surrender value of life insurance 19,000 Total assets $217,000 Liabilities and Stockholders' Equity Current liabilities Accounts payable $22,000 Reserve for income taxes 15,000 Customers' accounts with credit balances 1 $ 37,001 Deferred credits Unamortized premium on bonds payable 2,000 Long-term liabilities Bonds payable 60,000 Total liabilities 99,001 Common…arrow_forwardAlford Company and its 80 percent–owned subsidiary, Knight, have the following income statements for 2021: Alford Knight Revenues $ (500,000 ) $ (230,000 ) Cost of goods sold 300,000 140,000 Depreciation and amortization 40,000 10,000 Other expenses 20,000 20,000 Gain on sale of equipment (30,000 ) 0 Equity in earnings of Knight (36,200 ) 0 Net income $ (206,200 ) $ (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…arrow_forwardFollowing are separate income statements for Austin, Inc., and its 80 percent–owned subsidiary, Rio Grande Corporation as well as a consolidated statement for the business combination as a whole (credit balances indicated by parentheses). Austin Rio Grande Consolidated Revenues $ (706,000 ) $ (506,000 ) $ (1,212,000 ) Cost of goods sold 406,000 294,000 700,000 Operating expenses 106,000 76,000 207,000 Equity in earnings of Rio Grande (88,800 ) Individual company net income $ (282,800 ) $ (136,000 ) Consolidated net income $ (305,000 ) Noncontrolling interest in consolidated net income (22,200 ) Consolidated net income attributable to Austin $ (282,800 ) Additional Information Annual excess fair over book value amortization of $25,000 resulted from the acquisition. The parent applies the equity method to this investment. Austin has 60,000 shares of common stock and 4,000 shares of preferred stock outstanding. Owners of the preferred stock are paid an annual dividend of $30,000, and each…arrow_forward
- Presented here are the comparative balance sheets of Hames Incorporated at December 31, 2023 and 2022. Sales for the year ended December 31, 2023, totaled $580,000. HAMES INCORPORATEDBalance SheetsDecember 31, 2023 and 2022 2023 2022 Assets Cash $ 20,000 $ 20,000 Accounts receivable 78,000 72,000 Merchandise inventory 103,000 99,000 Total current assets $ 201,000 $ 191,000 Land 50,000 40,000 Plant and equipment 125,000 110,000 Less: Accumulated depreciation (65,000) (60,000) Total assets $ 311,000 $ 281,000 Liabilities Short-term debt $ 18,000 $ 17,000 Accounts payable 64,400 75,500 Other accrued liabilities 20,000 18,000 Total current liabilities $ 102,400 $ 110,500 Long-term debt 22,000 30,000 Total liabilities $ 124,400 $ 140,500 Stockholders’ Equity Common stock, no par, 100,000 shares authorized 40,000 and 25,000 shares issued, respectively $ 74,000 $ 59,000 Retained earnings: Beginning balance $ 81,500 $ 85,000…arrow_forwardThe separate income statements of Coors Company and its 60% owned subsidiary, Vespa Company, for the year ended December 31, 2017, are as follows: Coors Company Vespa CompanySales . . . . . . . . . . . . . . . . . . . . . . . . . . . .$520,000 $370,000Less cost of goods sold. . . . . . . . . . . 350,000 180,000Gross profit . . . . . . . . . . . . . . . . . . . . . .170,000 $190,000Less operating expenses . . . . . . . . . .100,000 90,000Operating income . . . . . . . . . . . . . . . $ 70,000 $100,000Subsidiary (dividend) income . . . . . . 12,600Income before tax . . . . . . . . . . . . . . .. $ 82,600 $100,000Provision for income tax . . . . . . . . . . . 21,756 30,000Net income . . . . . . . . . . . . . . . . . . . . . . $ 60,844 $ 70,000The following additional information is available:a.…arrow_forwardComparative income statements of Samba Corporation for the calendar years 2017, 2018, and 2019 are as follows (in thousands): 2017 2018 2019 Sales $14,000 $16,250 $16,850 Cost of Sales 8,100 8,900 9,100 Gross Profit 5,900 7,150 7,750 Operating Expenses 4,700 5,500 6,000 Net Income 1,200 1,650 1,750 ADDITIONAL INFORMATION 1. Samba was a 75 percent-owned subsidiary of Pamba Corporation throughout the 2017– 2019 period. Pamba’s separate income (excludes income from Samba) was $6,400,000, $5,600,000, and $7,000,000 in 2017, 2018, and 2019, respectively. Pamba acquired its interest in Samba at its underlying book value, which was equal to fair value on July 1, 2016. 2. Pamba sold inventory items to Samba during 2017 at a gross profit to Pamba of $650,000. Half the merchandise remained in Samba’s inventory at December 31, 2017. Total sales by Pamba to Samba in 2017 were $1,600,000. The remaining merchandise was sold by Samba in 2018. 3. Pamba’s inventory at December…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License