On January 1, 20X7, P Company acquired 60 percent of the outstanding common stock of S...
On January 1, 20X7, P Company acquired 60 percent of the outstanding common stock of S Company at the book value of the shares acquired. On that date, the fair value of noncontrolling interest was equal to 40 percent of book value of S. At the time of purchase, S had common stock of $1,000,000 outstanding and retained earnings of $800,000.
On December 31, 20X7, P purchased 50 percent of S's bonds outstanding which were originally issued on January 1, 20X4, at 99. The total bond issue has a face value of $600,000, pays 10 percent interest annually, and has a 10-year maturity. Any premium or discount is amortized using the effective interest method. P paid $306,000 for its investment in S's bonds and intends to hold the bonds until maturity.
Income and dividends for P and S for 20X7 and 20X8 are as follows:
|
P |
S |
||||||||||||||||||||||||
|
Operating Income |
Dividends |
Net Income |
Dividends |
||||||||||||||||||||||
|
20X7 |
$ |
1,600,000 |
$ |
400,000 |
$ |
600,000 |
$ |
300,000 |
|||||||||||||||||
|
20X8 |
1,200,000 |
400,000 |
1,000,000 |
300,000 |
|||||||||||||||||||||
Assume P accounts for its investment in S stock using the cost method.
Required:
- Present the worksheet elimination entries necessary to prepare consolidated financial statements for 20X7.
- Present the worksheet elimination entries necessary to prepare consolidated financial statements for 20X8.
Homework Answers
Add Answer to:
On January 1, 20X7, P Company acquired 60 percent of the
outstanding common stock of S...
On January 1, 20X7, P Company acquired 60 percent of the outstanding common stock of S...
On January 1, 20X7, P Company acquired 60 percent of the outstanding common stock of S Company at the book value of the shares acquired. On that date, the fair value of noncontrolling interest was equal to 40 percent of book value of S. At the time of purchase, S had common stock of $1,000,000 outstanding and retained earnings of $800,000. On December 31, 20X7, P purchased 50 percent of S's bonds outstanding which were originally issued on January 1,...
5. On January 1, 2019, P acquired all of the outstanding common stock of S for $1,000,000. On the...
need the answer to Part B only
5. On January 1, 2019, P acquired all of the outstanding common stock of S for $1,000,000. On the date of acquisition, the book value and fair market value of S's assets and liabilities were as follows: Book Value 200,000 300,000 160,000 340,000 Fair Market Value 300,000 500,000 Land Patent (10 yrs) Common Stock Retained Earnings a) Assuming that S uses push-down accounting, prepare the elimination entries as of 1/1/19. b) If P...
P Corporation acquired 80 percent ownership of S Company on January 1, 20X6, at underlying book...
P Corporation acquired 80 percent ownership of S Company on
January 1, 20X6, at underlying book value. At that date, the fair
value of the noncontrolling interest was equal to 20 percent of the
book value of S Company. Consolidated balance sheets at January 1,
20X8, and December 31, 20X8, are as follows:
The consolidated income statement for 20X8 contained the
following amounts:
P and S paid dividends of $25,000 and $15,000, respectively, in
20X8.
Required:
Prepare a worksheet to...
On January 1, 20X7, Yang Corporation acquired 25 percent of the outstanding shares of Spiel Corporation...
On January 1, 20X7, Yang Corporation acquired 25 percent of the outstanding shares of Spiel Corporation for $100,000 cash. Spiel Company reported net income of $75,000 and paid dividends of $30,000 for both 20X7 and 20X8. The fair value of shares held by Yang was $110,000 and $105,000 on December 31, 20X7 and 20X8 respectively.Based on the preceding information, what amount will be reported by Yang as balance in investment in Spiel on December 31, 20X8, if it used the...
On January 1, 20X8, Polo Corporation acquired 75 percent of Stallion Company's voting common stock for...
On January 1, 20X8, Polo Corporation acquired 75 percent of Stallion Company's voting common stock for $300,000. At the time of the combination, Stallion reported common stock outstanding of $200,000 and retained earnings of $150,000, and the fair value of the noncontrolling interest was $100,000. The book value of Stallion's net assets approximated market value except for patents that had a market value of $50,000 more than their book value. The patents had a remaining economic life of ten years...
Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $305,000 on January 1, 20X8...
Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $305,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $305,000. Peanut chooses to carry the investment in Snoopy at cost because the investment will be consolidated. Trial balance data for Peanut and Snoopy as of December 31, 20X8. are as follows: $ Snoopy Company Debit Credit $ 75,000 71,000 86,000 References Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings...
Peanut Company acquired 100 percent of Snoopy Company’s outstanding common stock for $313,000 on January 1,...
Peanut Company acquired 100 percent of Snoopy Company’s outstanding common stock for $313,000 on January 1, 20X8, when the book value of Snoopy’s net assets was equal to $313,000. Peanut chooses to carry the investment in Snoopy at cost because the investment will be consolidated. Trial balance data for Peanut and Snoopy as of December 31, 20X8, are as follows: Peanut Company Snoopy Company Debit Credit Debit Credit Cash $ 233,000 $ 80,000 Accounts Receivable 191,000 82,000 Inventory 197,000 89,000...
On January 1, 20X7, Poke Corporation acquired 25 percent of the outstanding shares of Shove Corporation...
On January 1, 20X7, Poke Corporation acquired 25 percent of the outstanding shares of Shove Corporation for $100,000 cash. Shove Company reported net income of $75,000 and paid dividends of $30,000 for both 20X7 and 20X8. The fair value of shares held by Poke was $110,000 and $105,000 on December 31, 20X7 and 20X8 respectively. If Poke could not exercise significant influence over the investee, by what amount will Poke's 20X7 income increase due to its investment in Shove? a)...
Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $314,000 on January 1,...
Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $314,000 on January 1, 20x8. when the book value of Snoopy's net assets was equal to $314,000. Peanut uses the equity method to account for investments Trial balance data for Peanut and Snoopy as of December 31, 20X8, are as follows: Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings & Equipment Cost of Goods Sold Depreciation Expense Selling & Administrative Expense Dividends Declared Accumulated Depreciation Accounts...
Private Manufacturing Company acquired 90 percent of Secret Corporation’s outstanding common stock on December 31, 20X5,...
Private Manufacturing Company acquired 90 percent of Secret Corporation’s outstanding common stock on December 31, 20X5, for $1,135,800. At that date, the fair value of the noncontrolling interest was $126,200, and Secret reported common stock outstanding of $494,000, premium on common stock of $274,000, and retained earnings of $414,000. The book values and fair values of Secret’s assets and liabilities were equal except for land, which was worth $30,000 more than its book value. On April 1, 20X6, Private issued...
need the answer to Part B only
5. On January 1, 2019, P acquired all of the outstanding common stock of S for $1,000,000. On the date of acquisition, the book value and fair market value of S's assets and liabilities were as follows: Book Value 200,000 300,000 160,000 340,000 Fair Market Value 300,000 500,000 Land Patent (10 yrs) Common Stock Retained Earnings a) Assuming that S uses push-down accounting, prepare the elimination entries as of 1/1/19. b) If P...
P Corporation acquired 80 percent ownership of S Company on
January 1, 20X6, at underlying book value. At that date, the fair
value of the noncontrolling interest was equal to 20 percent of the
book value of S Company. Consolidated balance sheets at January 1,
20X8, and December 31, 20X8, are as follows:
The consolidated income statement for 20X8 contained the
following amounts:
P and S paid dividends of $25,000 and $15,000, respectively, in
20X8.
Required:
Prepare a worksheet to...
Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $305,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $305,000. Peanut chooses to carry the investment in Snoopy at cost because the investment will be consolidated. Trial balance data for Peanut and Snoopy as of December 31, 20X8. are as follows: $ Snoopy Company Debit Credit $ 75,000 71,000 86,000 References Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings...
Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $314,000 on January 1, 20x8. when the book value of Snoopy's net assets was equal to $314,000. Peanut uses the equity method to account for investments Trial balance data for Peanut and Snoopy as of December 31, 20X8, are as follows: Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings & Equipment Cost of Goods Sold Depreciation Expense Selling & Administrative Expense Dividends Declared Accumulated Depreciation Accounts...
Most questions answered within 3 hours.
-
The blues made its way into many kinds of music. Eric Clapton,
The Beatles, and Elvis...
asked 7 minutes ago -
If you’re standing at the bottom of a hill and asked to evaluate
it while being...
asked 1 hour ago -
1. Which region has taken the lead in the world of
e-waste handling?
a) European Union...
asked 56 minutes ago -
A 8.15- g bullet from a 9-mm pistol has a velocity of 366.0 m/s.
It strikes...
asked 2 hours ago -
The outstanding bonds of Alpha Extracts have a yield to maturity
of 7.4 percent and a...
asked 2 hours ago -
The Problem: The Case of the Harmonizing Vacations
Your CEO is exploring partnering with a European...
asked 3 hours ago -
A chemical equation is balanced by adding coefficients in front
of some formulas so that the...
asked 3 hours ago -
From the literature (reference your sources): What are the
lattice parameters of calcite and aragonite? Why...
asked 4 hours ago -
Your system is rejecting the question am asking which is
preceded by a case study. It...
asked 4 hours ago -
3. On January 2, 2000, Larry creates a trust with himself as
trustee. Larry as trustee...
asked 4 hours ago -
A member of the volleyball team spikes the ball. During this
process, she changes the velocity...
asked 4 hours ago -
Are adult gamers less likely to use a gaming console (Xbox,
PlayStation, Wii, etc...) than teen...
asked 5 hours ago