Homework Answers
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Being excess depreciation charged in the books of subsidiary due to cost being higher by 159,300 reversed (as historic cost is also reduced). Amount of depreciation reversal is (159,300/30)
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Being excess depreciation charged in the books of subsidiary due to cost being higher by 159,300 reversed (as historic cost is also reduced). Amount of depreciation reversal is (159,300/30)
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During 2013, Pier One Company billed its 80% owned subsidiary, Scale Company, $706,100 for architectural services....
During 2013, Pier One Company billed its 80% owned subsidiary, Scale Company, $723,600 for architectural services. The c...
During 2013, Pier One Company billed its 80% owned subsidiary,
Scale Company, $723,600 for architectural services. The cost to
Pier One Company of providing the services was $426,500 for
salaries and $147,100 for other operating expenses. Scale Company
charged the architecture fees to the cost of a building that it
opened on January 1, 2014. The building had an estimated useful
life of 30 years.
Prepare in general journal form the workpaper entries relating to
the intercompany fees that are...
On January 1, 2013, Price Company acquired an 80% interest in the common stock of Smith...
On January 1, 2013, Price Company acquired an 80% interest in
the common stock of Smith Company on the open market for $811,500,
the book value at that date.
On January 1, 2014, Price Company purchased new equipment for
$15,000 from Smith Company. The equipment cost $9,700 and had an
estimated life of five years as of January 1, 2014.
During 2015, Price Company had merchandise sales to Smith Company
of $96,200; the merchandise was priced at 25% above Price...
Pinta Company, a forklift manufacturer, owns 80% of the voting stock of Standard Company. On Janu...
Pinta Company, a forklift manufacturer, owns 80% of the voting
stock of Standard Company. On January 1, 2014, Pinta Company sold
forklifts to Standard Company for $412,400. The forklifts, which
represented inventory to Pinta Company, had a cost to Pinta Company
of $322,400. The management of Standard Company estimated that the
forklifts had a useful life of nine years from the date of
purchase. Standard Company uses the straightline method to
depreciate its capital assets.
In 2014, Pinta Company reported...
Exercise 7-12 Pomeroy Corporation owns an 80% interest in Sherer Company and a 90% interest in...
Exercise 7-12
Pomeroy Corporation owns an 80% interest in Sherer Company and a
90% interest in Tampa Company. On January 2, 2014, Tampa Company
sold equipment with a book value of $631,800 to Sherer Company for
$705,300. This equipment has a remaining useful life of three
years. Sherer Company reported $108,800 and Tampa Company reported
$154,500 in net income (including sales to affiliates) in 2014.
Prepare the 2014 and 2015 consolidated statements workpaper entries
to eliminate the effects of this...
Peel Company owns 90% of the common stock of Seacore Company. Seacore Company sells merchandise to...
Peel Company owns 90% of the common stock of Seacore Company.
Seacore Company sells merchandise to Peel Company at 20% above
cost. During 2014 and 2015, such sales amounted to $451,400 and
$482,600, respectively. At the end of each year, Peel Company had
in its inventory one-fourth of the goods purchased from Seacore
Company during that year.
Peel Company reported $309,400 in net income from its independent
operations in 2014 and 2015. Seacore Company reported net income of
$117,600 in...
On January 1, 2015, P Company purchased equipment from its 80% owned subsidiary for $614,400. The...
On January 1, 2015, P Company purchased equipment from its 80% owned subsidiary for $614,400. The carrying value of the equipment on the books of S Company was $460,800. The equipment had a remaining useful life of six years on January 1, 2015. On January 1, 2016, P Company sold the equipment to an outside party for $565,600. Prepare in general journal form the entries necessary in 2015 and 2016 on the books of P Company to account for the...
The pretax financial income (or loss) figures for Bonita Company are as follows. 2012 2013 2014...
The pretax financial income (or loss) figures for Bonita Company are as follows. 2012 2013 2014 2015 2016 2017 2018 $164,000 275,000 86,000 (164,000) (390,000) 113,000 98,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 45% tax rate for 2012 and 2013 and a 40% tax rate for the remaining years. Prepare the journal entries for the years 2014 to 2018 to record income tax expense and the effects of...
Exercise 2-10 On January 1, 2013, Porsche Company acquired the net assets of Saab Company for...
Exercise 2-10
On January 1, 2013, Porsche Company acquired the net assets of Saab
Company for $449,660 cash. The fair value of Saab’s identifiable
net assets was $375,570 on this date. Porsche Company decided to
measure goodwill impairment using the present value of future cash
flows to estimate the fair value of the reporting unit (Saab). The
information for these subsequent years is as follows:
Year
Present Value
of Future Cash Flows
Carrying Value of
Saab’s Identifiable
Net Assets*
Fair...
Problem 22-1 Holtzman Company is in the process of preparing its financial statements for 2014. Assume that no entries f...
Problem 22-1 Holtzman Company is in the process of preparing its financial statements for 2014. Assume that no entries for depreciation have been recorded in 2014. The following information related to depreciation of fixed assets is provided to you. 1. Holtzman purchased equipment on January 2, 2011, for $77,100. At that time, the equipment had an estimated useful life of 10 years with a $4,100 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2014, as...
Problem 22-1 Holtzman Company is in the process of preparing its financial statements for 2014. Assume that no entries f...
Problem 22-1 Holtzman Company is in the process of preparing its financial statements for 2014. Assume that no entries for depreciation have been recorded in 2014. The following information related to depreciation of fixed assets is provided to you. 1. Holtzman purchased equipment on January 2, 2011, for $77,100. At that time, the equipment had an estimated useful life of 10 years with a $4,100 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2014, as...
During 2013, Pier One Company billed its 80% owned subsidiary,
Scale Company, $723,600 for architectural services. The cost to
Pier One Company of providing the services was $426,500 for
salaries and $147,100 for other operating expenses. Scale Company
charged the architecture fees to the cost of a building that it
opened on January 1, 2014. The building had an estimated useful
life of 30 years.
Prepare in general journal form the workpaper entries relating to
the intercompany fees that are...
On January 1, 2013, Price Company acquired an 80% interest in
the common stock of Smith Company on the open market for $811,500,
the book value at that date.
On January 1, 2014, Price Company purchased new equipment for
$15,000 from Smith Company. The equipment cost $9,700 and had an
estimated life of five years as of January 1, 2014.
During 2015, Price Company had merchandise sales to Smith Company
of $96,200; the merchandise was priced at 25% above Price...
Pinta Company, a forklift manufacturer, owns 80% of the voting
stock of Standard Company. On January 1, 2014, Pinta Company sold
forklifts to Standard Company for $412,400. The forklifts, which
represented inventory to Pinta Company, had a cost to Pinta Company
of $322,400. The management of Standard Company estimated that the
forklifts had a useful life of nine years from the date of
purchase. Standard Company uses the straightline method to
depreciate its capital assets.
In 2014, Pinta Company reported...
Exercise 7-12
Pomeroy Corporation owns an 80% interest in Sherer Company and a
90% interest in Tampa Company. On January 2, 2014, Tampa Company
sold equipment with a book value of $631,800 to Sherer Company for
$705,300. This equipment has a remaining useful life of three
years. Sherer Company reported $108,800 and Tampa Company reported
$154,500 in net income (including sales to affiliates) in 2014.
Prepare the 2014 and 2015 consolidated statements workpaper entries
to eliminate the effects of this...
Peel Company owns 90% of the common stock of Seacore Company.
Seacore Company sells merchandise to Peel Company at 20% above
cost. During 2014 and 2015, such sales amounted to $451,400 and
$482,600, respectively. At the end of each year, Peel Company had
in its inventory one-fourth of the goods purchased from Seacore
Company during that year.
Peel Company reported $309,400 in net income from its independent
operations in 2014 and 2015. Seacore Company reported net income of
$117,600 in...
On January 1, 2015, P Company purchased equipment from its 80% owned subsidiary for $614,400. The carrying value of the equipment on the books of S Company was $460,800. The equipment had a remaining useful life of six years on January 1, 2015. On January 1, 2016, P Company sold the equipment to an outside party for $565,600. Prepare in general journal form the entries necessary in 2015 and 2016 on the books of P Company to account for the...
The pretax financial income (or loss) figures for Bonita Company are as follows. 2012 2013 2014 2015 2016 2017 2018 $164,000 275,000 86,000 (164,000) (390,000) 113,000 98,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 45% tax rate for 2012 and 2013 and a 40% tax rate for the remaining years. Prepare the journal entries for the years 2014 to 2018 to record income tax expense and the effects of...
Exercise 2-10
On January 1, 2013, Porsche Company acquired the net assets of Saab
Company for $449,660 cash. The fair value of Saab’s identifiable
net assets was $375,570 on this date. Porsche Company decided to
measure goodwill impairment using the present value of future cash
flows to estimate the fair value of the reporting unit (Saab). The
information for these subsequent years is as follows:
Year
Present Value
of Future Cash Flows
Carrying Value of
Saab’s Identifiable
Net Assets*
Fair...
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