Advanced Financial Accounting
Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
Question
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Chapter 9, Problem 9.13E

a.

To determine

Introduction: Consolidation is the process of combining financial results of various subsidiaries with the financial results of parent company. It is used only when parent company holds more than 50% of share of subsidiary company.

The balance of investment account to be reported by P company on January 1, 20X5 before sale of shares.

b.

To determine

Introduction: Consolidation is the process of combining financial results of various subsidiaries with the financial results of parent company. It is used only when parent company holds more than 50% of share of subsidiary company.

The journal entry recorded by P company on sale of shares.

c.

To determine

Introduction: Consolidation is the process of combining financial results of various subsidiaries with the financial results of parent company. It is used only when parent company holds more than 50% of share of subsidiary company.

The consolidation entriesto complete consolidation worksheet for 20X5.

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Students have asked these similar questions
Public Corporation acquired 90 percent of Station Company’s voting common stock on January 1, 20X1, for $507,600. At the time of the combination, Station reported common stock outstanding of $127,000 and retained earnings of $382,000, and the fair value of the noncontrolling interest was $56,400. The book value of Station’s net assets approximated market value except for patents that had a market value of $55,000 more than their book value. The patents had a remaining economic life of ten years at the date of the business combination. Station reported net income of $75,000 and paid dividends of $23,000 during 20X1.Required: Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. Record the basic consolidation entry. 2. Record the amortized excess value reclassification entry. 3. Record the excess value…
Peanut Company acquired 75 percent of Snoopy Company's stock at underlying book value on January 1, 20X8. At that date, the fair value of the noncontrolling interest was equal to 25 percent of the book value of Snoopy Company. Snoopy Company reported shares outstanding of $350,000 and retained earnings of $100,000. During 20X8, Snoopy Company reported net income of $60,000 and paid dividends of $3,000. In 20X9, Snoopy Company reported net income of $90,000 and paid dividends of $15,000. The following transactions occurred between Peanut Company and Snoopy Company in 20X8 and 20X9:Snoopy Co. sold equipment to Peanut Co. for a $42,000 gain on December 31, 20X8. Snoopy Co. had originally purchased the equipment for $140,000 and it had a carrying value of $28,000 on December 31, 20X8. At the time of the purchase, Peanut Co. estimated that the equipment still had a seven-year remaining useful life.Peanut sold land costing $90,000 to Snoopy Company on June 28, 20X9, for…
Pretzel Corporation acquired 100 percent of Stick Company’s outstanding shares on January 1, 20X7. Balance sheet data for the two companies immediately after the purchase follow:     As indicated in the parent company balance sheet, Pretzel purchased $59,000 of Stick’s bonds from the subsidiary at par value immediately after it acquired the stock. An analysis of intercompany receivables and payables also indicates that the subsidiary owes the parent $8,000. On the date of combination, the book values and fair values of Stick’s assets and liabilities were the same.   Record the basic consolidation entry
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