Homework Answers
(a)Equipment
In consolidated financial statements, Equipment value of both the companies should be added together. That is, consolidated value of equipment should be shown
(b) Investment in williams Company.
The carrying amount of the parent’s investment in each subsidiary and the parent’s portion of equity of each subsidiary should be eliminated. So ‘Investment in williams company ‘ should not be included in the consolidated totals.
(c) Dividends declared
Intergroup dividends should be eliminated in full.
(d)Goodwill
Goodwill of acquiring the Williams company should be shown in the consolidated Balance sheet, under the head ‘Intangible assets’.
This value can be amortised in each year.
(e) Revenues
Both companies’ revenues to be totalled. However intra group revenues and expenses are eliminated from the figure.
(f)Expenses
Both companies expenses to be totalled. However intra group revenues and expenses are eliminated from the figure.
(g)Common stock
The common stock / shareholder’s fund of only parent company is shown in the consolidated balance sheet.
Hence only common stock of Maguire company is shown. Common stock of Williams company is fully eliminated in consolidated financial statements.
(h)Net income
Net income of both the companies is totalled and shown in the consolidated financial statements. Any inter group transaction profit or loss is eliminated.
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Herbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2020, for $654,000 in...
Herbert, Inc., acquired all of Rambis Company’s outstanding
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amortization of $11,400 results from this transaction. On the date
of the takeover, Herbert reported retained earnings of $401,000,
and Rambis reported a $207,000 balance. Herbert reported internal
net income of $56,500 in 2020 and $73,100 in 2021 and declared
$10,000 in dividends each year. Rambis reported net income of
$22,700 in 2020 and $39,300 in 2021 and declared $5,000 in...
In a consolidated worksheet, we sometimes need to adjust the beginning balance of the parent company's...
In a consolidated worksheet, we sometimes need to adjust the beginning balance of the parent company's retained earnings. Our textbook refers to this adjustment as *C. Which of the following statements about entry *C is false. Assume that both the parent and the subsidiary are profitable. a. If the parent company apples the equity method on its own books, then entry *C is not necessary. b. If the parent company applies the initial value method on its own books, then...
template Herbert, Inc. acquired all of Rambis Company's outstanding stock on January 1, 2020 for $574,000...
template
Herbert, Inc. acquired all of Rambis Company's outstanding stock on January 1, 2020 for $574,000 in cash. Annual excess amortization of $ 12,000 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $ 400,000, and Rambis reported a $ 200,000 balance. Herbert reported internal income of $40,000 in 2020 and $ 50,000 in 2021 and paid $10,000 in dividends each year. Rambis reported net income of $ 20,000 in 2020 and $30,000 in...
Herbert, Inc., acquired all of Rambis Company's outstanding stock on January 1, 2020, for $642,000 in...
Herbert, Inc., acquired all of Rambis Company's outstanding stock on January 1, 2020, for $642,000 in cash. Annual excess amortization of $11,200 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $497,000, and Rambis reported a $280,000 balance. Herbert reported internal net income of $54,750 in 2020 and $68,650 in 2021 and declared $10,000 in dividends each year. Rambis reported net income of $21,300 in 2020 and $35,200 in 2021 and declared $5,000 in...
Herbert, Inc. acquired all of Rambis Company’s outstanding stock on January 1, 2017 for $ 574,000...
Herbert, Inc. acquired all of Rambis Company’s outstanding stock
on January 1, 2017 for $ 574,000 in cash. Annual excess
amortization of $ 12,000 results from this transaction. On the date
of the takeover, Herbert reported retained earnings of $ 400,000,
and Rambis reported a $ 200,000 balance. Herbert reported internal
income of $ 40,000 in 2017 and $ 50,000 in 2018 and paid $ 10,000
in dividends each year. Rambis reported net income of $ 20,000 in
2017 and...
Herbert, Inc., acquired all of Rambis Company's outstanding stock on January 1, 2020, for $574,000 in...
Herbert, Inc., acquired all of Rambis Company's outstanding stock on January 1, 2020, for $574,000 in cash. Annual excess amortization of $12,000 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $400,000, and Rambis reported a $200,000 balance. Herbert reported internal net income of $40,000 in 2020 and $50,000 in 2021 and declared $10,000 in dividends each year. Rambis reported net income of $20,000 in 2020 and $30,000 in 2021 and declared $5,000 in...
Adams, Inc., acquires Clay Corporation on January 1, 2017, in exchange for $510,000 cash. Immediately after...
Adams, Inc., acquires Clay Corporation on January 1, 2017, in exchange for $510,000 cash. Immediately after the acquisition, the two companies have the following account balances. Clay's equipment (with a five-year remaining life) is actually worth $440,000. Credit balances are indicated by parentheses. Current assets Investment in Clay Equipment Liabilities Common stock Retained earnings, 1/1/17 Adams $ 300,000 510,000 600,000 (200,000) (350,000) (860,000) Clay $ 220,000 0 390,000 (160,000) (150,000) (300,000) In 2017, Clay earns a net income of $55,000...
Please bold answer in explanation Herbert, Inc., acquired all of Rambis Company's outstanding stock on January...
Please bold answer in explanation
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Herbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2017, for $607,000 in...
Herbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2017, for $607,000 in cash. Annual excess amortization of $13,200 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $441,000, and Rambis reported a $234,000 balance. Herbert reported internal net income of $60,250 in 2017 and $72,150 in 2018 and declared $10,000 in dividends each year. Rambis reported net income of $21,800 in 2017 and $33,700 in 2018 and declared $5,000 in...
Herbert, Inc., acquired all of Rambis Company’s outstanding
stock on January 1, 2020, for $654,000 in cash. Annual excess
amortization of $11,400 results from this transaction. On the date
of the takeover, Herbert reported retained earnings of $401,000,
and Rambis reported a $207,000 balance. Herbert reported internal
net income of $56,500 in 2020 and $73,100 in 2021 and declared
$10,000 in dividends each year. Rambis reported net income of
$22,700 in 2020 and $39,300 in 2021 and declared $5,000 in...
In a consolidated worksheet, we sometimes need to adjust the beginning balance of the parent company's retained earnings. Our textbook refers to this adjustment as *C. Which of the following statements about entry *C is false. Assume that both the parent and the subsidiary are profitable. a. If the parent company apples the equity method on its own books, then entry *C is not necessary. b. If the parent company applies the initial value method on its own books, then...
template
Herbert, Inc. acquired all of Rambis Company's outstanding stock on January 1, 2020 for $574,000 in cash. Annual excess amortization of $ 12,000 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $ 400,000, and Rambis reported a $ 200,000 balance. Herbert reported internal income of $40,000 in 2020 and $ 50,000 in 2021 and paid $10,000 in dividends each year. Rambis reported net income of $ 20,000 in 2020 and $30,000 in...
Herbert, Inc., acquired all of Rambis Company's outstanding stock on January 1, 2020, for $642,000 in cash. Annual excess amortization of $11,200 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $497,000, and Rambis reported a $280,000 balance. Herbert reported internal net income of $54,750 in 2020 and $68,650 in 2021 and declared $10,000 in dividends each year. Rambis reported net income of $21,300 in 2020 and $35,200 in 2021 and declared $5,000 in...
Herbert, Inc. acquired all of Rambis Company’s outstanding stock
on January 1, 2017 for $ 574,000 in cash. Annual excess
amortization of $ 12,000 results from this transaction. On the date
of the takeover, Herbert reported retained earnings of $ 400,000,
and Rambis reported a $ 200,000 balance. Herbert reported internal
income of $ 40,000 in 2017 and $ 50,000 in 2018 and paid $ 10,000
in dividends each year. Rambis reported net income of $ 20,000 in
2017 and...
Herbert, Inc., acquired all of Rambis Company's outstanding stock on January 1, 2020, for $574,000 in cash. Annual excess amortization of $12,000 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $400,000, and Rambis reported a $200,000 balance. Herbert reported internal net income of $40,000 in 2020 and $50,000 in 2021 and declared $10,000 in dividends each year. Rambis reported net income of $20,000 in 2020 and $30,000 in 2021 and declared $5,000 in...
Adams, Inc., acquires Clay Corporation on January 1, 2017, in exchange for $510,000 cash. Immediately after the acquisition, the two companies have the following account balances. Clay's equipment (with a five-year remaining life) is actually worth $440,000. Credit balances are indicated by parentheses. Current assets Investment in Clay Equipment Liabilities Common stock Retained earnings, 1/1/17 Adams $ 300,000 510,000 600,000 (200,000) (350,000) (860,000) Clay $ 220,000 0 390,000 (160,000) (150,000) (300,000) In 2017, Clay earns a net income of $55,000...
Please bold answer in explanation
Herbert, Inc., acquired all of Rambis Company's outstanding stock on January 1, 2020. for $631,000 in cash. Annual excess amortization of $14,100 results from this transaction. On the date of the takeover. Herbert reported retained earnings of $415,000, and Rambis reported a $258,000 balance. Herbert reported internal net income of $45,750 in 2020 and $58.450 in 2021 and declared $10,000 in dividends each year. Rambis reported net income of $23.500 in 2020 and $36.200 in...
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