Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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Chapter A2, Problem 13MCQ
To determine
The account title that will not appear in the consolidated financial statement is to be determined.
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House Plc owns 80% of the issued share capital of Window Plc and 25% of the issued share capital of Door Plc. The revenues for the year are as follows:House Plc GH¢1,500,000Window Plc GH¢1,000,000Door Plc GH¢160,000What amount for revenue should appear in the consolidated statement of profit or loss for the year?
Scully Corporation holds enough stock in company A and company B to give it voting control of both firms. Consider the accompanying simplified balance sheets for these companies,
Assets
Liabilities and Stockholders' Equity
Scully Corporation
Common stock holdings
Long-term debt
$37,000
Company A
$41,000
Preferred stock
20,000
Company B
57,000
Common stock equity
41,000
Total
$98,000
Total
$98,000
Company A
Current assets
$99,000
Current liabilities
$101,000
Fixed assets
400,000
Long-term debt
200,000
Total
$499,000
Common stock equity
198,000
Total
$499,000
Company B
Current assets
$179,000
Current liabilities
$101,000
Fixed assets
722,000
Long-term debt
501,000
Total
$901,000
Common stock equity
299,000
Total
$901,000
a. What percentage of the total assets…
Scully Corporation holds enough stock in company A and company B to give it voting control of both firms. Consider the accompanying simplified balance sheets for these companies,
Assets
Liabilities and Stockholders' Equity
Scully Corporation
Common stock holdings
Long-term debt
$37,000
Company A
$41,000
Preferred stock
20,000
Company B
57,000
Common stock equity
41,000
Total
$98,000
Total
$98,000
Company A
Current assets
$99,000
Current liabilities
$101,000
Fixed assets
400,000
Long-term debt
200,000
Total
$499,000
Common stock equity
198,000
Total
$499,000
Company B
Current assets
$179,000
Current liabilities
$101,000
Fixed assets
722,000
Long-term debt
501,000
Total
$901,000
Common stock equity
299,000
Total
$901,000
a. The percentage of the total…
Chapter A2 Solutions
Cornerstones of Financial Accounting
Ch. A2 - How do long-term investments differ from...Ch. A2 - Prob. 2DQCh. A2 - Prob. 3DQCh. A2 - Prob. 4DQCh. A2 - Prob. 5DQCh. A2 - Prob. 6DQCh. A2 - Prob. 7DQCh. A2 - How does the equity method discourage the...Ch. A2 - Prob. 9DQCh. A2 - Prob. 10DQ
Ch. A2 - Prob. 11DQCh. A2 - Prob. 12DQCh. A2 - Prob. 13DQCh. A2 - Prob. 14DQCh. A2 - Prob. 15DQCh. A2 - Prob. 1MCQCh. A2 - Prob. 2MCQCh. A2 - Prob. 3MCQCh. A2 - Prob. 4MCQCh. A2 - Prob. 5MCQCh. A2 - Prob. 6MCQCh. A2 - Prob. 7MCQCh. A2 - Prob. 8MCQCh. A2 - Prob. 9MCQCh. A2 - Prob. 10MCQCh. A2 - Prob. 11MCQCh. A2 - When the market value of a companys...Ch. A2 - Prob. 13MCQCh. A2 - Prob. 14MCQCh. A2 - Prob. 15MCQCh. A2 - Prob. 16MCQCh. A2 - Prob. 17ECh. A2 - Trading Securities Pear Investments began...Ch. A2 - Prob. 19ECh. A2 - Prob. 20ECh. A2 - Adjusting the Allowance to Adjust Trading...Ch. A2 - Prob. 22ECh. A2 - Prob. 23ECh. A2 - Prob. 24ECh. A2 - Prob. 25ECh. A2 - Prob. 26ECh. A2 - Prob. 27ECh. A2 - Prob. 28ECh. A2 - Prob. 29ECh. A2 - Prob. 30E
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- Scully Corporation holds enough stock in company A and company B to give it voting control of both firms. Consider the accompanying simplified balance sheets for these companies, Assets Liabilities and Stockholders' Equity Scully Corporation Common stock holdings Long-term debt $37,000 Company A $41,000 Preferred stock 20,000 Company B 57,000 Common stock equity 41,000 Total $98,000 Total $98,000 Company A Current assets $99,000 Current liabilities $101,000 Fixed assets 400,000 Long-term debt 200,000 Total $499,000 Common stock equity 198,000 Total $499,000 Company B Current assets $179,000 Current liabilities $101,000 Fixed assets 722,000 Long-term debt 501,000 Total $901,000 Common stock equity 299,000 Total $901,000 . a. What percentage of the total assets…arrow_forwardA 70% owned entity declares and pays cash dividend. What effect does the dividend have on the retained earnings and minority interest balance in the consolidated balance sheet? A. No effect on retained earnings and decrease on minority interest B. Decrease both retained earnings and minority interest C. Increase on retained earnings and decrease on minority interest D. No effect on either retained earnings or minority interestarrow_forwardThe Passers Co. acquired 70% of the net assets of Failures Co. for P1,100,000. The assets of Failures Co. have a book value of P1,200,000 and a fair market value of P1,300,000; its liabilities are P200,000. What is the amount of minority interest in the stockholders’ equity section of the consolidated balance sheet?arrow_forward
- A 70% owned subsidiary company declares and pays a cash dividend. What effect does the dividend have on the retained earnings and minority interest balances in the parent company’s consolidated balance sheet? a. No effect on either retained earnings or minority interest b. Decrease in both retained earnings and minority interest c. A decrease in retained earnings and no effect on minority interest. d. No effect on retained earnings and a decrease in minority interest.arrow_forwardAred Company showed the following shareholders’ equity on January 1, 2020: Share capital 1,000,000 Share premium 2,000,000 Retained earnings 4,000,000 The entity had 400,000 authorized shares of P5 par value, of which 200,000 shares were issued and outstanding. On July 1, 2020, the entity declared a property dividend of inventory payable on March 1, 2021. The inventory had a P1,200,000 carrying amount and a fair value less cost to distribute of P1,000,000 on July 1, 2020. The fair value less cost to distribute is P1,500,000 on December 31, 2020, and P900,000 on March 1, 2021. The net income for 2020 was P3,000,000. - What is the carrying amount of the inventory on December 31, 2020? - What is the amount to be recognized in profit or loss for the distribution of the non- cash dividend?arrow_forwardAred Company showed the following shareholders’ equity on January 1, 2020: Share capital 1,000,000 Share premium 2,000,000 Retained earnings 4,000,000 The entity had 400,000 authorized shares of P5 par value, of which 200,000 shares were issued and outstanding. On July 1, 2020, the entity declared a property dividend of inventory payable on March 1, 2021. The inventory had a P1,200,000 carrying amount and a fair value less cost to distribute of P1,000,000 on July 1, 2020. The fair value less cost to distribute is P1,500,000 on December 31, 2020, and P900,000 on March 1, 2021. The net income for 2020 was P3,000,000. - What amount should be reported as retained earnings on December 31, 2020? - What is the dividend payable on December 31, 2020?arrow_forward
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