ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 7, Problem 7.31P
To determine
Consolidated financial statements:Financial statements of both parent and subsidiary are combined to prepare a single set of books. The consolidation process starts with the data recorded on the books of individual consolidating companies. The accounting book of individual companies are placed in a third party work sheet, and entries are made eliminating intercompany transactions between them.
Consolidated
A consolidated balance sheet presents assets and liabilities of parent and subsidiary company on as single document, with no distinctions on which item belong to which company.
Requirement 1
Preparation of consolidated balance sheet worksheet as on 31 December 20X6.
b
To determine
Consolidated financial statements:Financial statements of both parent and subsidiary are combined to prepare a single set of books. The consolidation process starts with the data recorded on the books of individual consolidating companies. The accounting book of individual companies are placed in a third party work sheet, and entries are made eliminating intercompany transactions between them.
Consolidated balance sheet:
A consolidated balance sheet presents assets and liabilities of parent and subsidiary company on as single document, with no distinctions on which item belong to which company.
Requirement 2
Preparation of consolidated balance sheet of L and Subsidiary company.
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Required information
On January 1, 20X2, Power Company acquired 80 percent of Strong Company's outstanding stock for cash. The fair value
of the noncontrolling interest was equal to a proportionate share of the book value of Strong Company's net assets at the
date of acquisition. Selected balance sheet data at December 31, 20X2 are as follows:
Total Assets
Liabilities
Common Stock
Retained Earnings
Total Liabilities & Stockholders' Equity
Multiple Choice
O
$35,200
Based on the preceding information, what amount should be reported as noncontrolling interest in net assets in Power Company's December 31, 20X2, consolidated balance sheet?
$48,200
$76,800
Power
$ 564,000
O $112,800
180,000
150,000
234,000
$ 564,000
Strong
$ 216,000
65,000
80,000
96,000
$ 241,000
On 1 January 20XO Alpha Co purchased 90,000 ordinary $1 shares in Beta Co for $270,000. At that date
Beta Co's retained earnings amounted to $90,000 and the fair values of Beta Co's assets at acquisition
were equal to their book values. Three years later, on 31 December 20X2, the statements of financial
position of the two companies were:
Alpha Co
Beta Co
Sundry net assets
Shares in Beta
230,000
180,000
410,000
260,000
260,000
Share capital
Ordinary shares of $1 each
Retained earnings
200,000
100,000
210,000
410,000
160,000
260,000
The share capital of Beta Co has remained unchanged since 1 January 20X0. The fair value of the non-
controlling interest at acquisition was $42,000.
Required:
a. What amount should appear in the group's consolidated statement of financial position at 31 December
20X2 for goodwill?
b. What amount should appear in the group's consolidated statement of financial position at 31 December
20X2 for non-controlling interest?
c. What amount should appear in the…
On January 2, year 1, ABC Company purchased 75% of XYZ's outstanding common stock. On that date, the fair value of the 25% noncontrolling interest was $35,000. During year 1, XYZ had net income of $20,000. Selected balance sheet data at December 31, year 1, is as follows: ABC (Column 1), XYZ (Column 2)
In its December 31, year 1 consolidated balance sheet, what amount should ABC report as common stock?
Chapter 7 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - Prob. 7.3QCh. 7 - Prob. 7.4QCh. 7 - Prob. 7.5QCh. 7 - Prob. 7.6QCh. 7 - Prob. 7.7QCh. 7 - Prob. 7.8QCh. 7 - Prob. 7.9QCh. 7 - Prob. 7.10Q
Ch. 7 - Prob. 7.11QCh. 7 - Prob. 7.12QCh. 7 - Prob. 7.13QCh. 7 - Prob. 7.14QCh. 7 - Prob. 7.15QCh. 7 - Prob. 7.16QCh. 7 - Prob. 7.17QCh. 7 - Prob. 7.18AQCh. 7 - Prob. 7.1CCh. 7 - Prob. 7.2CCh. 7 - Prob. 7.3CCh. 7 - Prob. 7.4CCh. 7 - Prob. 7.5CCh. 7 - Prob. 7.1.1ECh. 7 - Prob. 7.1.2ECh. 7 - Prob. 7.1.3ECh. 7 - Prob. 7.1.4ECh. 7 - Prob. 7.1.5ECh. 7 - Prob. 7.2.1ECh. 7 - Prob. 7.2.2ECh. 7 - Prob. 7.2.3ECh. 7 - Prob. 7.2.4ECh. 7 - Prob. 7.2.5ECh. 7 - Prob. 7.2.6ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.5ECh. 7 - Prob. 7.6ECh. 7 - Prob. 7.7ECh. 7 - Transfer of Depreciable Asset at Year-End Pitcher...Ch. 7 - Prob. 7.9ECh. 7 - Sale of Equipment to Subsidiary in Current Period...Ch. 7 - Prob. 7.11ECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Prob. 7.14ECh. 7 - Prob. 7.15ECh. 7 - Prob. 7.16ECh. 7 - Prob. 7.17ECh. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Prob. 7.20ECh. 7 - Prob. 7.21ECh. 7 - Prob. 7.22ECh. 7 - Prob. 7.23AECh. 7 - Prob. 7.24PCh. 7 - Prob. 7.25PCh. 7 - Prob. 7.26PCh. 7 - Prob. 7.27PCh. 7 - Prob. 7.28.1PCh. 7 - Prob. 7.28.2PCh. 7 - Prob. 7.28.3PCh. 7 - Prob. 7.28.4PCh. 7 - Prob. 7.29PCh. 7 - Prob. 7.30PCh. 7 - Prob. 7.31PCh. 7 - Prob. 7.32PCh. 7 - Prob. 7.33PCh. 7 - Prob. 7.34PCh. 7 - Prob. 7.35PCh. 7 - Prob. 7.37PCh. 7 - Prob. 7.38PCh. 7 - Prob. 7.41AP
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