Purse Corporation acquired 70 percent of Scarf Corporation’s ownership on January 1, 20X8, for $145,600. At...
Purse Corporation acquired 70 percent of Scarf Corporation’s
ownership on January 1, 20X8, for $145,600. At that date, Scarf
reported capital stock outstanding of $124,000 and retained
earnings of $84,000, and the fair value of the noncontrolling
interest was equal to 30 percent of the book value of Scarf. During
20X8, Scarf reported net income of $32,400 and comprehensive income
of $38,400 and paid dividends of $27,400.
Required:
1. Present all equity-method entries that Purse would have recorded
in accounting for its investment in Scarf during 20X8. (If
no entry is required for a transaction/event, select "No journal
entry required" in the first account field.)
A- Record the initial investment in Scarf Corp. B- Record Purse
Corp.'s 70% share of Scarf Corp.'s 20X8 income. C- Record Purse
Corp.'s 70% share of Scarf Corp.'s 20X8 dividend. D- Record Purse
Corp.'s proportionate share of OCI from Scarf Corp.
2- Present all consolidation entries needed at December 31, 20X8, to prepare a complete set of consolidated financial statements for Purse Corporation and its subsidiary. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) A- Record the basic consolidation entry. B- Record the Other Comprehensive Income entry.
Homework Answers
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Purse Corporation acquired 70 percent of Scarf Corporation’s
ownership on January 1, 20X8, for $145,600. At...
A. Purse Corporation acquired 70 percent of Scarf Corporation's ownership on January 1, 20X8, for $148,400....
A. Purse Corporation acquired 70 percent of Scarf Corporation's ownership on January 1, 20X8, for $148,400. At that date, Scarf reported capital stock outstanding of $126,000 and retained earnings of $86,000, and the fair value of the noncontrolling interest was equal to 30 percent of the book value of Scarf. During 20X8, Scarf reported net income of $33,600 and comprehensive income of $39,600 and paid dividends of $28,600. Required: a. Present all equity-method entries that Purse would have recorded in...
Palmer Corporation acquired 70 percent of Krown Corporation’s ownership on January 1, 20X8, for $148,400. At...
Palmer Corporation acquired 70 percent of Krown Corporation’s ownership on January 1, 20X8, for $148,400. At that date, Krown reported capital stock outstanding of $126,000 and retained earnings of $86,000, and the fair value of the noncontrolling interest was equal to 30 percent of the book value of Krown. During 20X8, Krown reported net income of $33,600 and comprehensive income of $39,600 and paid dividends of $28,600. Required: a. Present all equity-method entries that Palmer would have recorded in...
Purse Corporation owns 70 percent of Scarf Company’s voting shares. On January 1, 20X3, Scarf sold...
Purse Corporation owns 70 percent of Scarf Company’s voting
shares. On January 1, 20X3, Scarf sold bonds with a par value of
$675,000 at 98. Purse purchased $450,000 par value of the bonds;
the remainder was sold to nonaffiliates. The bonds mature in five
years and pay an annual interest rate of 8 percent. Interest is
paid semiannually on January 1 and July 1.
Required:
a. What amount of interest expense should be reported in the 20X4
consolidated income statement?...
Purse Corporation owns 70 percent of Scarf Company’s voting shares. On January 1, 20X3, Scarf sold...
Purse Corporation owns 70 percent of Scarf Company’s voting shares. On January 1, 20X3, Scarf sold bonds with a par value of $705,000 at 98. Purse purchased $470,000 par value of the bonds; the remainder was sold to nonaffiliates. The bonds mature in five years and pay an annual interest rate of 8 percent. Interest is paid semiannually on January 1 and July 1. Required: a. What amount of interest expense should be reported in the 20X4 consolidated income statement?...
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20x8, for $158,000. At...
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20x8, for $158,000. At that date, the fair value of Saver's buildings and equipment was $32,000 more than the book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price's management concluded at December 31, 20x8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $5,500. Trial balance data for Price and Saver...
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $122,400. At...
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $122,400. At that date, the fair value of Saver's buildings and equipment was $16,000 more than the book value. Accumulated depreciation on this date was $19,000. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price's management concluded at December 31, 20X8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $2,500....
Callas Corporation paid $380,000 to acquire 40 percent ownership of Thinbill Company on January 1, 20X9....
Callas Corporation paid $380,000 to acquire 40 percent ownership
of Thinbill Company on January 1, 20X9. The amount paid was equal
to Thinbill’s underlying book value. During 20X9, Thinbill reported
operating income of $45,000 and income of $20,000 from gains on
derivative contracts that were designated as cash flow hedges, so
these gains were reported in Other Comprehensive Income (OCI).
Thinbill paid dividends of $9,000 on December 10, 20X9.
Required:
a. Give all journal entries that Callas Corporation recorded in...
Ravine Corporation purchased 40 percent ownership of Valley Industries for $116,400 on January 1, 20X6, when...
Ravine Corporation purchased 40 percent ownership of Valley Industries for $116,400 on January 1, 20X6, when Valley had capital stock of $246,000 and retained earnings of $45,000. The following data were reported by the companies for the years 20X6 through 20X9: Dividends Declared Operating Income, Net Income, Valley Year Ravine Corporation Valley Industries Ravine 20X6 20X7 20X8 20X9 $149,000 94,000 224,000 169,000 $41,000 61,000 10,000 51,000 $ 74,000 $31,000 74,000 94,000 104,000 51,000 40,000 31,000 Required: a. What net income...
please help! On 1 November 20X8, Porter Company acquired the following FVTPL investments: • Minto Corp.-2,600...
please help!
On 1 November 20X8, Porter Company acquired the following FVTPL investments: • Minto Corp.-2,600 common shares at $20 cash per share • Pugwash Corp.-600 preferred shares at $30 cash per share The annual reporting period ends 31 December. Quoted fair values on 31 December 20X8 were as follows: • Minto Corporation common, $17 • Pugwash Corporation preferred, $34 The following information relates to 20X9: 2 March 1 October 31 December Received cash dividends per share as follows: Minto...
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $109,600. At...
Price Corporation acquired 100 percent ownership of Saver
Company on January 1, 20X8, for $109,600. At that date, the fair
value of Saver's buildings and equipment was $15,000 more than the
book value. Accumulated depreciation on this date was $15,000.
Buildings and equipment are depreciated on a 10-year basis.
Although goodwill is not amortized, Price’s management concluded at
December 31, 20X8, that goodwill involved in its acquisition of
Saver shares had been impaired and the correct carrying value was
$2,600....
Purse Corporation owns 70 percent of Scarf Company’s voting
shares. On January 1, 20X3, Scarf sold bonds with a par value of
$675,000 at 98. Purse purchased $450,000 par value of the bonds;
the remainder was sold to nonaffiliates. The bonds mature in five
years and pay an annual interest rate of 8 percent. Interest is
paid semiannually on January 1 and July 1.
Required:
a. What amount of interest expense should be reported in the 20X4
consolidated income statement?...
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20x8, for $158,000. At that date, the fair value of Saver's buildings and equipment was $32,000 more than the book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price's management concluded at December 31, 20x8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $5,500. Trial balance data for Price and Saver...
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $122,400. At that date, the fair value of Saver's buildings and equipment was $16,000 more than the book value. Accumulated depreciation on this date was $19,000. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price's management concluded at December 31, 20X8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $2,500....
Callas Corporation paid $380,000 to acquire 40 percent ownership
of Thinbill Company on January 1, 20X9. The amount paid was equal
to Thinbill’s underlying book value. During 20X9, Thinbill reported
operating income of $45,000 and income of $20,000 from gains on
derivative contracts that were designated as cash flow hedges, so
these gains were reported in Other Comprehensive Income (OCI).
Thinbill paid dividends of $9,000 on December 10, 20X9.
Required:
a. Give all journal entries that Callas Corporation recorded in...
Ravine Corporation purchased 40 percent ownership of Valley Industries for $116,400 on January 1, 20X6, when Valley had capital stock of $246,000 and retained earnings of $45,000. The following data were reported by the companies for the years 20X6 through 20X9: Dividends Declared Operating Income, Net Income, Valley Year Ravine Corporation Valley Industries Ravine 20X6 20X7 20X8 20X9 $149,000 94,000 224,000 169,000 $41,000 61,000 10,000 51,000 $ 74,000 $31,000 74,000 94,000 104,000 51,000 40,000 31,000 Required: a. What net income...
please help!
On 1 November 20X8, Porter Company acquired the following FVTPL investments: • Minto Corp.-2,600 common shares at $20 cash per share • Pugwash Corp.-600 preferred shares at $30 cash per share The annual reporting period ends 31 December. Quoted fair values on 31 December 20X8 were as follows: • Minto Corporation common, $17 • Pugwash Corporation preferred, $34 The following information relates to 20X9: 2 March 1 October 31 December Received cash dividends per share as follows: Minto...
Price Corporation acquired 100 percent ownership of Saver
Company on January 1, 20X8, for $109,600. At that date, the fair
value of Saver's buildings and equipment was $15,000 more than the
book value. Accumulated depreciation on this date was $15,000.
Buildings and equipment are depreciated on a 10-year basis.
Although goodwill is not amortized, Price’s management concluded at
December 31, 20X8, that goodwill involved in its acquisition of
Saver shares had been impaired and the correct carrying value was
$2,600....
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