Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Chapter 9, Problem 9.14E
To determine
Purchase of additional shares from non-affiliate:a parent company may purchase the common stock of a subsidiary at different points in time. Once control is achieved, the entire investment is valued based on fair values at the date control achieved. A subsidiary can change the parent’s ownership percentage by selling additional shares to or repurchasing shares from non-affiliates or through stock transactions with parent.
The computation of balance in P’s investment in S products company stock on December 31, 20X8.
To determine
Purchase of additional shares from non-affiliate: a parent company may purchase the common stock of a subsidiary at different points in time. Once control is achieved, the entire investment is valued based on fair values at the date control achieved. A subsidiary can change the parent’s ownership percentage by selling additional shares to or repurchasing shares from non-affiliates or through stock transactions with parent.
The computation of balance in P’s investment in S products company stock on December 31, 20X9.
To determine
Purchase of additional shares from non-affiliate: a parent company may purchase the common stock of a subsidiary at different points in time. Once control is achieved, the entire investment is valued based on fair values at the date control achieved. A subsidiary can change the parent’s ownership percentage by selling additional shares to or repurchasing shares from non-affiliates or through stock transactions with parent.
The consolidation entries needed for December 31, 20X9.
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1. 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 year
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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.
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Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $216,000. At that date, the fair
value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common
stock for $97,000. Summarized balance sheets for Split on the dates indicated are as follows:
Assets
Cash
Accounts Receivable
Inventory
Buildings & Equipment (net)
Total Assets
Liabilities & Equities
Accounts Payable
Bonds Payable
Common Stock
Retained Earnings
Total Liabilities & Equities
20X7
$ 49,000
51,000
72,000
370,000
$542,000
December 31
20X8
Balance in investment account
$ 79,000
91,000
102,000
350,000
$622,000
20X9
$ 99,000
121,000
162,000
330,000
$712,000
$ 77,000 $127,000 $167,000
105,000
105,000
105,000
155,000
155,000
155,000
205,000
235,000
285,000
$542,000
$622,000
$712,000
Split paid dividends of $22,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and…
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
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