ADV. ACCT CONNECT STAND ALONE
13th Edition
ISBN: 9781266295744
Author: Hoyle
Publisher: MCG
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Chapter 7, Problem 19P
a.
To determine
Find the amounts which appear for each line in a consolidated income statement.
b.
To determine
Find the income tax expense which should appear on the consolidated income statement if each company files a separate return.
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Comparative 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…
The following is the statement of comprehensive income of Green Limited:
Green Limited
Statement of Comprehensive Income for the Year Ended 31st December 2018
GH₵
GH₵
Sales
86,000
Less: Cost of goods sold
Opening stock
16,500
Purchases
48,000
64,500
Less closing stock
(24,000)
(40,500)
Gross profit
45,500
Less operating expenses
Administrative expenses
(9,000)
Depreciation
(4,000)
Selling & distribution expenses
(10,000)
(23,000)
Profit before interest and tax
22,500
Interest
(5,000)
Profit before tax
17,500
Corporate tax
6,000
Profit after interest & tax
11,500
Green Limited
Statement of Financial Position as at 31st December 2018
31/1/2018
31/12/017
Non-current assets
Plant & machinery
20,000
15,000
Motor vehicles
8,000…
Presented below are the condensed income statement of EVIA CORPORATION for the years ended December 31, 2018 and 2017.
2018
2017
Sales
P5,000,000
P4,900.000
Cost of goods sold
3,350,000
3,300,000
Gross Income
1,650,000
1,600,000
Operating expenses
675,000
650,000
Operating Income
975,000
950,000
Gain on sale of division
200,000
-
1.175,000
950,000
Income Tax 30%
352,500
285,000
Net Income
822,500
665,000
On October 10, 2018 EVIA COMPANY entered into an agreement to sell the assets of one of its geographical segments. The geographical segment comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the company. The segment was sold on December 31, 2018 for P1,750,000. The book value of the segments assets was P1550,000. The segment’s contribution to EVIA’s operating income before rax for each year was as follows:…
Chapter 7 Solutions
ADV. ACCT CONNECT STAND ALONE
Ch. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - Prob. 3QCh. 7 - How does the presence of an indirect ownership...Ch. 7 - Prob. 5QCh. 7 - In accounting for mutual ownerships, what is the...Ch. 7 - Prob. 7QCh. 7 - Prob. 8QCh. 7 - Prob. 9QCh. 7 - Prob. 10Q
Ch. 7 - Prob. 11QCh. 7 - Jones acquires Wilson, in part because the new...Ch. 7 - Prob. 13QCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Which of the following is correct for two...Ch. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Prob. 9PCh. 7 - Prob. 10PCh. 7 - Prob. 11PCh. 7 - Prob. 12PCh. 7 - Prob. 13PCh. 7 - Prob. 14PCh. 7 - On January 1, 2016, Uncle Company purchased 80...Ch. 7 - Prob. 16PCh. 7 - Prob. 17PCh. 7 - Prob. 18PCh. 7 - Prob. 19PCh. 7 - Clarke has a controlling interest in Rogerss...Ch. 7 - Prob. 21PCh. 7 - Prob. 22PCh. 7 - Prob. 23PCh. 7 - Prob. 24PCh. 7 - Prob. 25PCh. 7 - Prob. 26PCh. 7 - Prob. 27PCh. 7 - Prob. 28PCh. 7 - Prob. 29PCh. 7 - Prob. 1DYSCh. 7 - Prob. 2DYS
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- Comparative income statements of Samba Corporation for the calendar years 2017, 2018, and 2019 are as follows (in thousands): Sales Cost of sales Gross profit Operating expenses Net income 2017 $14,000 8,100 5,900 4,700 $1,200 2018 $16,250 8,900 7,150 5,500 $1,650 2019 $16,850 9,100 7,750 6,000 $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 31, 2018, included…arrow_forwardFinancial information for Powell Panther Corporation is shown below: Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2018 Sales $ 1,625.0 $ 2017 1,300.0 Operating costs excluding depreciation and amortization 1,300.0 1,105.0 EBITDA $ 325.0 $ 195.0 Depreciation and amortization 39.0 31.0 Earnings before interest and taxes (EBIT) $ 286.0 $ 164.0 Interest 36.0 29.0 Earnings before taxes (EBT) $ 250.0 $ 135.0 Taxes (40%) 100.0 54.0 Net income $ 150.0 $ 81.0 Common dividends $ 135.0 $ 65.0 Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2018 Assets Cash and equivalents $ 23.0 $ 2017 18.0 Accounts receivable 164.0 143.0 Inventories 343.0 312.0 Total current assets $ 530.0 $ 473.0 Net plant and equipment 390.0 312.0 Total assets $ 920.0 $ 785.0 Liabilities and Equity…arrow_forwardollowing are financial statements for Moore Company and Kirby Company for 2021: Moore Kirby Sales $ (800,000) $ (600,000) Cost of goods sold 500,000 400,000 Operating and interest expenses 100,000 160,000 Net income $ (200,000) $ (40,000) Retained earnings, 1/1/21 $ (990,000) $ (550,000) Net income (200,000) (40,000) Dividends declared 130,000 –0– Retained earnings, 12/31/21 $(1,060,000) $ (590,000) Cash and receivables $ 217,000 $ 180,000 Inventory 224,000 160,000 Investment in Kirby 657,000 –0– Equipment (net) 600,000 420,000 Buildings 1,000,000 650,000 Accumulated depreciation—buildings (100,000) (200,000) Other assets 200,000 100,000 Total assets $ 2,798,000 $ 1,310,000 Liabilities $(1,138,000) $ (570,000) Common stock (600,000) (150,000) Retained earnings, 12/31/21 (1,060,000) (590,000) Total…arrow_forward
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