Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 9.1.3E
To determine
To choose:the correct answer
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Gant Company purchased 30 percent of the outstanding shares of Temp Company for $87,000 on January 1, 20X6. The following
results are reported for Temp Company:
Net income
Dividends paid
Fair value of shares held by Gant:
January 1
December 31
a. Carries the investment at fair value.
b. Uses the equity method.
20X6
$ 43,000
14,000
Income from investment
Balance in investment
S
$
87,000
106,000
Required:
Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's investment in
Temp at the end of each year assuming that Gant uses the following options in accounting for its investment in Temp:
Complete this question by entering your answers in the tabs below.
20X7
$ 38,000
28,000
20X6
106,000
103,000
20X7
(800) $ 39,400
95,700 $ 109,000
Answer is complete but not entirely correct.
Required A Required B
Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's
investment in…
Exercises:
Lion Inc. purchases 30% of Zombie Corp for P500,000. At the end of the year, Zombie Corp reports a net income of P100,000 and a dividend of P50,000 to its shareholders.
Requirement: Prepare all the necessary journals entries.
Dr
Cr
Acquisition
Share in P/L or OCI
Dividend Distribution
On January 1, 20x1 Pinup Corp acquired 34,560 outstanding ordinary shares of Slug corp. for a cash consideration pf P5,158,400. The shareholder’s equity of Slug Corp. on the date of business combination is presented below:
Ordinary shares P100 par value 5,760,000
Share premium 1,600,000
Retained Earnings 960,000
Pinup Corp agreed to issue additional 1,000 shares to former owners of Slug Corp if the market price per share of Pinup Corp shares increase to P120 pe share. On the acquisition date, the contingent consideration was estimated at P80,000.
What is the amount of non-controlling interest if it is measured at its proportionate share in the identifiable net assets of Slug Corp?
3,328,000
3,492,267
4,992,000
3,200,000
Chapter 9 Solutions
Advanced Financial Accounting
Ch. 9 - Prob. 9.1QCh. 9 - Prob. 9.2QCh. 9 - Prob. 9.3QCh. 9 - Prob. 9.4QCh. 9 - Prob. 9.5QCh. 9 - Prob. 9.6QCh. 9 - Prob. 9.7QCh. 9 - Prob. 9.8QCh. 9 - Prob. 9.9QCh. 9 - Prob. 9.10Q
Ch. 9 - Prob. 9.11QCh. 9 - Prob. 9.12QCh. 9 - Prob. 9.13QCh. 9 - Prob. 9.14QCh. 9 - Prob. 9.15QCh. 9 - Prob. 9.16QCh. 9 - Prob. 9.1CCh. 9 - Prob. 9.2CCh. 9 - Prob. 9.3CCh. 9 - Prob. 9.4CCh. 9 - Prob. 9.5CCh. 9 - Prob. 9.1.1ECh. 9 - Prob. 9.1.2ECh. 9 - Prob. 9.1.3ECh. 9 - Prob. 9.1.4ECh. 9 - Prob. 9.2.1ECh. 9 - Prob. 9.2.2ECh. 9 - Prob. 9.2.3ECh. 9 - Prob. 9.2.4ECh. 9 - Prob. 9.2.5ECh. 9 - Prob. 9.3ECh. 9 - Prob. 9.4ECh. 9 - Prob. 9.5ECh. 9 - Prob. 9.6ECh. 9 - Prob. 9.7ECh. 9 - Prob. 9.8ECh. 9 - Prob. 9.9ECh. 9 - Prob. 9.10ECh. 9 - Prob. 9.11ECh. 9 - Subsidiary Stock Dividend Stake Company reported...Ch. 9 - Prob. 9.13ECh. 9 - Prob. 9.14ECh. 9 - Prob. 9.15ECh. 9 - Prob. 9.16ECh. 9 - Prob. 9.17.1PCh. 9 - Prob. 9.17.2PCh. 9 - Prob. 9.17.3PCh. 9 - Prob. 9.17.4PCh. 9 - Prob. 9.17.5PCh. 9 - Prob. 9.18PCh. 9 - Prob. 9.19PCh. 9 - Prob. 9.20PCh. 9 - Prob. 9.21PCh. 9 - Prob. 9.22PCh. 9 - Prob. 9.23PCh. 9 - Prob. 9.24PCh. 9 - Prob. 9.25PCh. 9 - Prob. 9.26PCh. 9 - Prob. 9.27P
Knowledge Booster
Similar questions
- Required information On January 1, 20X2, Power Company acquired 80 percent of Strong Company's outstanding stock for cash. The fair value of the noncontrolling interest was equal to a proportionate share of the book value of Strong Company's net assets at the date of acquisition. Selected balance sheet data at December 31, 20X2 are as follows: Total Assets Liabilities Common Stock Retained Earnings Total Liabilities & Stockholders' Equity Multiple Choice O $35,200 Based on the preceding information, what amount should be reported as noncontrolling interest in net assets in Power Company's December 31, 20X2, consolidated balance sheet? $48,200 $76,800 Power $ 564,000 O $112,800 180,000 150,000 234,000 $ 564,000 Strong $ 216,000 65,000 80,000 96,000 $ 241,000arrow_forwardGant Company purchased 30 percent of the outstanding shares of Temp Company for $76,000 on January 1, 20X6. The following results are reported for Temp Company: Net income Dividends paid Fair value of shares held by Gant: January 1 December 31 a. Carries the investment at fair value. b. Uses the equity method. Required A Required B 20X6 $ 47,000 14,000 76,000 95,000 Income from investment Balance in investment Required: Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's investment in Temp at the end of each year assuming that Gant uses the following options in accounting for its investment in Temp: Complete this question by entering your answers in the tabs below. 20X6 20X7 $ 42,000 30,000 95,000 92,000 20X7 Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's investment in Temp at the end of each year assuming that Gant uses the equity method in accounting…arrow_forwardGant Company purchased 30 percent of the outstanding shares of Temp Company for $76,000 on January 1, 20X6. The following results are reported for Temp Company: Net income Dividends paid Fair value of shares held by Gant: January 1 December 31 a. Carries the investment at fair value. b. Uses the equity method. Required A Required B 20X6 $ 47,000 14,000 Required: Gant Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's investment in Temp at the end of each year assuming that Gant uses the following options in accounting for its investment in Temp: Complete this question by entering your answers in the tabs below. Income from investment Balance in investment 76,000 95,000 20X6 20X7 $ 42,000 30,000 95,000 92,000 20X7arrow_forward
- Harvey Company increased its ownership in Washington Company from 70% to 90% by the purchase of additional shares of the Washington’s outstanding stock from noncontrolling shareholders for a purchase price of $300,000. Immediately prior to the transaction, Harvey’s consolidated balance sheet included a noncontrolling interest balance of $1,000,000.The journal entry by Harvey to record the purchase includes: Select one: A. Cash credit, $333,333 B. APIC credit, $300,000 C. APIC credit, $333,333 D. APIC credit, $33,333arrow_forwardunc.4 On January 1, Allen Corporation purchased 30% of the 30,000 outstanding common shares of Towne Corporation at $17 per share as a long-term investment. On the date of purchase, the book value and the fair value of the net assets of Towne Corporation were equal. During the year, Towne Corporation reported net income of $24,000 and declared and paid dividends of $8,000. As of December 31, common shares of Towne Corporation were trading at $20 per share. Please Indicate the amount of income that would be reported on the income statement and the investment balance on the year-end balance sheet under requirement (a) and requirement (b).arrow_forwardUse the following information for question 1 CPA Corporation purchased a 10% interest in Sticky Company on January 1, 2010 as an available-for-sale investment for a price of P120,00. On January 1, 2015, CPA Corporation purchases 7,000 additional shares of Sticky Company from existing stockholders for P945,000. This purchase increased CPA interest to 70%. Sticky Company had the following statement financial position just prior to CPA second purchases: Assets Liabilities and Equity Current assets Building (net) 300,000 Equipment (net) Liabilities Common stock, P30 par 495,000 195,000 420,000 300,000 Retained earnings 720,000 Total assets 1,215,000 Total liabilities and equity 1,215,000 On the date of the second purchase, CPA determines that the equipment of Sticky was understated by P150,000 and had a 5-year remaining life. All other book values approximate fair values. Any remaining excess is attributed to goodwill. 1. On January 1, 2015 consolidated statement of financial positon, what…arrow_forward
- Caroline Corporation had the following investment at FVTPL at the beginning of the current year: Fair ValueXYZ Corporation, 10,000 shares (originally cost P1,000,000) - P1,200,000DEF Company, 20,000 shares (originally cost P500,000) - 450,000During the current year, the following transactions occurred: Feb. 28 XYZ Corporation declared a 3-for-2 share split.Apr 31 DEF Company declared a 20% share dividend. The market value of DEF Company on this dateis P3.00. June 30 Sold 5,000 shares of DEF Company for P100,000, less brokers fee of P1,000.July 31 Sold 5,000 shares of XYZ Corporation for P135.Sept 30 Received share rights to purchase one share of XYZ Corporation for P100 per share. Thecompany should tender five rights for every share acquired. The market price of XYZCorporation shares on this date is P140.Oct. 31 Exercise all the share rights from XYZ Corporation. Dec. 31 The…arrow_forwardPart AClark Company acquired 15% of the 500,000 shares of common stock of Davis Company at a total cost of$25.75 per share on June 1, 2022. On October 1, Davis Company declared and paid a $50,000 cash dividend.On December 31, Davis Company stock had a market price of $27.00 per share and the company reported netincome of $1,250,000 for the year. The securities are classified as available-for-sale.Prepare all journal entries for 2022. Part BOn January 1, 2023, Evans Company purchased 40% of Farley Corporation’s 800,000 outstanding shares ofcommon stock at a cost of $35 per share. On July 15, Farley declared and paid a cash dividend of $1.50 pershare. On December 31, Farley reported a net income of $2,860,000 for the year and the market price of itscommon stock was $42 per share. Prepare all journal entries for 2023. I only need part B.arrow_forward1. Matray acquired 16,000 ordinary shares of Petros on 1 April 20X9. On 31 December 20X8Petros’s accounts showed a share premium of $4,000 and retained earnings of $15,000. The fairmarket value of non-controlling interest at acquisition was $7,000.Below are the statements of financial position for the two companies as at 31 December 20X9:Matray PetrosNon-current assets:Property, plant and equipment 39,000 33,000Investment in Petros 50,000Current assets 78,000 40,000Total assets 167,000 73,000Equity and liabilitiesEquityOrdinary shares of: $1 each 100,000: 50c each 10,000Share premium 7,000 4,000Retained earnings 40,000 39,000Current liabilities 20,000 20,000Total equity and liabilities 167,000 73,000Required:Prepare the consolidated statement of financial position of Matray as at 31 December 20X9. Assumeprofits have accrued evenly throughout the yeararrow_forward
- Mino Corporation had the following investment at FVTPL at the beginning of the current year: Fair ValueXYZ Corporation, 10,000 shares (originally cost P1,000,000) - P1,200,000DEF Company, 20,000 shares (originally cost P500,000) - 450,000During the current year, the following transactions occurred: Feb. 28 XYZ Corporation declared a 3-for-2 share split.Apr 31 DEF Company declared a 20% share dividend. The market value of DEF Company on this dateis P3.00. June 30 Sold 5,000 shares of DEF Company for P100,000, less brokers fee of P1,000.July 31 Sold 5,000 shares of XYZ Corporation for P135.Sept 30 Received share rights to purchase one share of XYZ Corporation for P100 per share. Thecompany should tender five rights for every share acquired. The market price of XYZCorporation shares on this date is P140.Oct. 31 Exercise all the share rights from XYZ Corporation. Dec. 31 The market…arrow_forwardOn January 1, 20x1, Pinup Corp. acquired 34,560 outstanding ordinary shares of Slug Corp. for a cash consideration of P5,158,400. The shareholders' equity of Slug Corp. on the date of business combination is presented below: Ordinary shares P100 par value 5,760,000 Share premium 1,600,000 Retained Earnings 960,000 Pinup Corp agreed to issue additional 1,000 shares to former owners of Slug Corp if the market price per share of Pinup Corp shares increase to P120 per share. On the acquisition date, the contingent consideration was estimated at P80,000. What is the amount of non-controlling interest if it is measured at its proportionate share in the identifiable net assets of Slug Corp.? O 3,328,000 O 4,992,000 O 3,200,000 O 3,492,267arrow_forwardOn January 1, 20X2, Parent Inc. issued 32,000 shares of its P10 par value common stock for all the outstanding shares of Son Company. The fair value of Parent Inc.'s stock is P25 per share. Parent Inc. pays P50,000 in registering the stocks. Given below are the statements of financial position (SFP) of the companies before the acquisition: Parent Inc. Statement of Financial Position January 1, 20X2 Assets Liabilities and Equity P210,000 420,000 400,000 500,000 505,000 P2,035,000 Cash P200,000 Accounts Payable 185,000 Bonds Payable 190,000 Common Stock, P10 par value 300,000 Additional Paid-In Capital (APIC) 740,000 Retained Earnings 420,000 Total Liabilities and Equity P2,035,000 Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets Son Company Statement of Financial Position January 1, 20X2 Book Value Fair Value P55,000 150,000 130,000 500,000 300,000 P1,135,000 Accounts Receivable Inventory Land P55,000 130,000 85,000 320,000…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning