ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 9, Problem 9.17.1P
To determine
To choose:the correct answer
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Gumiho Corporation acquired Forest Company through an exchange of common shares. All of Forest's assets
and liabilities were immediately transferred to Gumiho. Gumiho's common stock was trading at P20 per share at
the time of exchange. Following selected information is also available.
Par value of shares outstanding
Additional Paid-in Capital
Before Acquisition
P400,000
P700,000
After Acquisition
P500,000
P1,100,000
Based on the proceeding information, what is the number of shares was issued at the time of the exchange?
25,000
35,000
20,000
10,000
The Alhambra Company had these accounts at the time it was acquired by Kingdom Co.:
Cash
P 108,000
Accounts Receivable
1,371,000
Inventories
360,000
PPE
1,948,200
Accounts Payable
1,052,400
Kingdom Co. paid P4,200,000 for net assets of Alhambra Company. It has determined the fair market values
of investment and PPE were P399,000 and P2,700,000, respectively.
An assumed contingent liability arising from past events with a fair value amounting…
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
Fair Value Journal Entries, Available-for-Sale Investments
The investments of Steelers Inc. include a single investment: 8,900 shares of Bengals Inc. common stock purchased on September 12, Year 1, for $8 per share including
brokerage commission. These shares were classified as available-for-sale securities. As of the December 31, Year 1, balance sheet date, the share price declined to $6 per
share.
a. Journalize the entries to acquire the investment on September 12 and record the adjustment to fair value on December 31, Year 1.
Year 1 Sept. 12
Year 1 Dec. 31
b. How is the unrealized gain or loss for available-for-sale investments disclosed on the financial statements?
Unrealized Gain (Loss) on Available-for-Sale Investments is reported in the
of the
Chapter 9 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 9 - Prob. 9.1QCh. 9 - Prob. 9.2QCh. 9 - Prob. 9.3QCh. 9 - Prob. 9.4QCh. 9 - Prob. 9.5QCh. 9 - Prob. 9.6QCh. 9 - Prob. 9.7QCh. 9 - Prob. 9.8QCh. 9 - Prob. 9.9QCh. 9 - Prob. 9.10Q
Ch. 9 - Prob. 9.11QCh. 9 - Prob. 9.12QCh. 9 - Prob. 9.13QCh. 9 - Prob. 9.14QCh. 9 - Prob. 9.15QCh. 9 - Prob. 9.16QCh. 9 - Prob. 9.1CCh. 9 - Prob. 9.2CCh. 9 - Prob. 9.3CCh. 9 - Prob. 9.4CCh. 9 - Prob. 9.5CCh. 9 - Prob. 9.1.1ECh. 9 - Prob. 9.1.2ECh. 9 - Prob. 9.1.3ECh. 9 - Prob. 9.1.4ECh. 9 - Prob. 9.2.1ECh. 9 - Prob. 9.2.2ECh. 9 - Prob. 9.2.3ECh. 9 - Prob. 9.2.4ECh. 9 - Prob. 9.2.5ECh. 9 - Prob. 9.3ECh. 9 - Prob. 9.4ECh. 9 - Prob. 9.5ECh. 9 - Prob. 9.6ECh. 9 - Prob. 9.7ECh. 9 - Prob. 9.8ECh. 9 - Prob. 9.9ECh. 9 - Prob. 9.10ECh. 9 - Prob. 9.11ECh. 9 - Subsidiary Stock Dividend Stake Company reported...Ch. 9 - Prob. 9.13ECh. 9 - Prob. 9.14ECh. 9 - Prob. 9.15ECh. 9 - Prob. 9.16ECh. 9 - Prob. 9.17.1PCh. 9 - Prob. 9.17.2PCh. 9 - Prob. 9.17.3PCh. 9 - Prob. 9.17.4PCh. 9 - Prob. 9.17.5PCh. 9 - Prob. 9.18PCh. 9 - Prob. 9.19PCh. 9 - Prob. 9.20PCh. 9 - Prob. 9.21PCh. 9 - Prob. 9.22PCh. 9 - Prob. 9.23PCh. 9 - Prob. 9.24PCh. 9 - Prob. 9.25PCh. 9 - Prob. 9.26PCh. 9 - Prob. 9.27P
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
- Required Information [The following information applies to the questions displayed below.] Apple Corporation acquires 80 percent of Berry Corporation's common shares on January 1, 20X2. On January 2, 20X2, Berry acquires 60 percent of Coco Corporation's common stock. Information on company book values on the date of purchase and operating results for 20X2 is as follows: Company Apple Corporation Berry Corporation Coco Corporation Required: Select the correct answer for each of the following questions. Multiple Choice The fair values of the noncontrolling interests of Berry and Coco at the dates of acquisition were $60,000 and $80,000, respectively. O $22,000. Book Value $ 800,000 300,000 200,000 O $46,000. Purchase Price $ 240,000 120,000 4. The amount of income assigned to the noncontrolling interest in the 20X2 consolidated income statement is: O $42.000. $20,000. 28X2 Operating Income $ 100,000 80,000 50,000arrow_forward1. On January 3, 2020, Castle Corporation purchased the following equity securities as an investment: Number of Cost of Total Company Shares Share $20 Cost $ 8,000 24,000 600 ,7ב 400 2,000 800 B 12 22 These securities are classified as available for sale. Required: a. Prepare the journal entry to record the acquisition of the stock. b. On June 30, 2020, C Company paid dividends of $3.00 per share. Prepare the journal entry that would be used by Castle to record the dividend receipt. c. On December 31, 2020, the market values per share were: Company Market Value A $22 B 12 20 Prepare any journal entry or entries necessary to record these changes in market value. d. On March 14, 2021, Castle sold 800 shares of C Company for $18 per share. Prepare the journal entry to record the sale.arrow_forward1. On January 1, 20X2, Pol Inc. issued 25,000 shares of its P10 par value common stock for 80% of the outstanding shares of Sci Company. The fair value of Polinc stockis P28. Sci Company (SC) measures non-controlling interest (NCI) at fair value. Given below are the statements offinancial position (SFP) of the companies before the acquisition: Pol Inc. Statement of Finandial Positon January 1, 20X2 Assets Liabilities and Equty Cash Accounts Receivable Inventory Land P200,000 Accounts Payable 185,000 Bonds Payable 190,000 Common Stock, P10 par value 300,000 Additional Paid-In Capital (APIC) 740,000 Retained Earnings 420.000 Total Liabilities and Equity P2.035.000 P210,000 420,000 400,000 500,000 505.000 P2.035.000 Building, net ofdepreciation Equipment, net of depreciation Total Assets Sci Company Statement of Financial Positon January 1,20X2 Book Value Fair Value P55,000 125,000 90,000 320,000 130.000 P720.000 Accounts Receivable Inventory Land P55,000 150,000 130,000 500,000 300.000…arrow_forward
- Question Armadillo Enterprises acquired the following equity investmentsat the beginning of year 1 as trading investments. Description Number of shares Market price per share Total price Finestra Company 15,000 X $25 $387,500 BVD Company 20,000 x$18 |S360,000 Market values at theend of Years 1 &2 are presented below: Market/Fair Value End of year 1 End of year 2 Finestra Company IS19 $23 BVD Company $22 $28 REQUIREMENTS: ( Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises sells 15,000 shares of BVD Company for $16at the beginning of year 2. Prepare the journal entry to record thesale. Prepare the adjusting journal entry required at the end of year2. Assume that ArmadilloEnterprises now holds these investments asavailable-for-sale. Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo…arrow_forwardOn January 1, 2021, PORKING acquired majority of SAPER’s outstanding voting stocks. On that day, the (incomplete) working paper entries on that day were as follow WPE#1 Dr: Ordinary shares of SAPER 300,000 Dr: APIC of SAPER 300,000 Dr: RE of SAPER 375,000 Cr: Investment in SAPER ? Cr: Non-controlling interest ? WPE#2 Dr: Assets of SAPER 174,500 Cr: Investment in SAPER 113,425 Cr: Non-controlling interest ? WPE#3 Dr: Goodwill ? Cr: Investment in SAPER 74,075 Cr: Non-controlling interest ? What is the percentage of the Controlling Interest? 50% None of the choices 100% 75%arrow_forwardON of consolidated shareholder's equity? a. P9,853,575 b. P9,122,070 c. P8,773,575 d. P9,867,525 19. On January 5, 2022, Purpose Corporation purchased 70% of Showtime Company's P10 par ordinary shares for P900,000. On this date, the carrying amount of Showtime's net assets was P1,000,000. The fair.value of identifiable net assets and liabilities of Showtime were the same as the carrying amount except for equipment, which is 200,000 in excess of carrying amount. For the year ended December 31, 2022, Showtime had a net income of P150,000 and paid cash dividend of P63,000 to Purpose. Excess attributable to equipment is amortized over 10 years. In December 31, 2022 consolidated statements, the non-controlling interest should be reported at: a. P397,714 b. Р380,614 P372,000 с. d. P345,500 20 On January 2, 2022, Galatians Company acquired 80% investment inarrow_forward
- On January 1, 2021, PORKING acquired majority of SAPER’s outstanding voting stocks. On that day, the (incomplete) working paper entries on that day were as follow WPE#1 Dr: Ordinary shares of SAPER 300,000 Dr: APIC of SAPER 300,000 Dr: RE of SAPER 375,000 Cr: Investment in SAPER ? Cr: Non-controlling interest ? WPE#2 Dr: Assets of SAPER 174,500 Cr: Investment in SAPER 113,425 Cr: Non-controlling interest ? WPE#3 Dr: Goodwill ? Cr: Investment in SAPER 74,075 Cr: Non-controlling interest ? Group of answer choices a.None of the choices b.50% c.100% d.75%arrow_forwardOn January 1, 2019, Bailey Industries had shares outstanding as follows.6% cumulative preference shares, €100 par value, issued and outstanding 10,000 shares €1,000,000Ordinary shares €10 par value, issued and outstanding 200,000 shares 2,000,000To acquire the net assets of three smaller companies, Bailey authorized the issuance of an additional 170,000 ordinary shares. The acquisitions took place as shown below.Date of Acquisition Shares IssuedCompany A: April 1, 2019, 60,000Company B: July 1, 2019, 80,000Company C: October 1, 2019 30,000On May 14, 2019, Bailey realized a €90,000 (before taxes) gain from discontinued operations. On December 31, 2019, Bailey recorded net income of €300,000 before tax and exclusive of the gain.InstructionsAssuming a 40% tax rate, compute the earnings per share data that should appear on the financial statements of Bailey Industries as of December 31, 2019arrow_forwardOn January 1, 2025, Teal Industries had stock outstanding as follows: 8% Noncumulative preferred stock, $100 par value, issued and outstanding 242,000 shares Common stock, $1 par value, issued and outstanding 621,000 shares Date of Acquisition MicroBio February 1, 2025 BioTech June 1, 2025 To acquire the net assets of three smaller companies, Teal issued an additional 591,000 common shares. The acquisitions took place as follows. SuperBio November 1, 2025 Shares Issued 213,000 Earnings per share $ 84,000 $24,200,000 294,000 621,000 On December 31, 2025, Teal reported net income of $9,349,000 before taxes. No dividends on the common or preferred stock were declared during 2025. Assuming a 40% tax rate, compute the earnings per share data that should appear on the financial statements of Teal Industries as of December 31, 2025. (Round answer to 2 decimal places, e.g. 2.55.)arrow_forward
- Part (b) Sigma Corp common shares (FVOCI-elect) On January 15, 2022, Alpha Inc acquired 100,000 shares, representing 10% of the outstanding shares of Sigma Corp at a price of $13 per share plus brokerage commission of $6,000. On August 1, 2022, Sigma Corp declared and paid a dividend of $1.00 per share. On December 31, 2022, the shares of Sigma Corp were trading on the Stock Exchange at $14 per share. Required: Prepare journal entries to record the above transactionsarrow_forwardRecording Entries for Equity Investment: FV-NI and Equity Method On January 1, 2020, Allen Corporation purchased 30% of the 66,000 outstanding common shares of Towne Corporation at $17 per share as a long-term investment. On the date of purchase, the book value and the fair value of the net assets of Towne Corporation were equal. During the year, Towne Corporation reported net income of $52,800 and declared and paid dividends of $17,600. As of December 31, 2020, common shares of Towne Corporation were trading at $20 per share. Journal Entries with Significant Influence Journal Entries without Significant Influence Financial Statement Presentation c. Indicate the amount of income that would be reported on the 2020 income statement and the investment balance on the 2020 year-end balance sheet under requirement (a) and requirement (b). Income Investment Net Balance 2020 Dec. 31, 2020 a. Investment accounted for under the equity method Answer Answer b. Investment…arrow_forwardOn January 1, 20X2, Parent Inc. issued 32,000 shares of its P10 par value common stock for all the outstanding shares of Son Company. The fair value of Parent Inc.'s stock is P25 per share. Parent Inc. pays P50,000 in registering the stocks. Given below are the statements of financial position (SFP) of the companies before the acquisition: Parent Inc. Statement of Financial Position January 1, 20X2 Assets Liabilities and Equity P210,000 420,000 400,000 500,000 505,000 P2,035,000 Cash P200,000 Accounts Payable 185,000 Bonds Payable 190,000 Common Stock, P10 par value 300,000 Additional Paid-In Capital (APIC) 740,000 Retained Earnings 420,000 Total Liabilities and Equity P2,035,000 Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets Son Company Statement of Financial Position January 1, 20X2 Book Value Fair Value P55,000 150,000 130,000 500,000 300,000 P1,135,000 Accounts Receivable Inventory Land P55,000 130,000 85,000 320,000…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education