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- Gardner Corp. owns 80% of the voting common stock of Lockhart Co. Lockhart owns 70% of Canning Co. Gardner and Lockhart both use the initial value method to account for their investments. The following information is available from the financial statements and records of the three companies: Separate company net income before investment income Dividend income from investment in subsidiary Deferral of intra-entity gains Amortization expense related to excess fair value over book value of investment Gardner Lockhart Corp. Co. $900,000 $650,000 $150,000 250,000 120,000 110,000 80,000 What amount should be reported for consolidated net income? 40,000 Canning Co. 20,000 25,000 Separate company net income includes intra-entity gains before the consolidating deferral but does not include dividend income from investment in subsidiary.Choose the correct. Aceton Corporation owns 80 percent of the outstanding stock of Voctax, Inc. During the current year, Voctax made $140,000 in sales to Aceton. How does this transfer affect the consolidated statement of cash flows?a. The transaction should be included if payment has been made.b. Only 80 percent of the transfers should be included because the subsidiary made the sales.c. Because the transfers were from a subsidiary organization, the cash flows are reported as investing activities.d. Because of the intra-entity nature of the transfers, the amount is not reported in the consolidated cash flow statement.Aceton Corporation owns 80 percent of the outstanding stock of Voctax, Inc. During the current year, Voctax made $140,000 in sales to Aceton. How does this transfer affect the consolidated statement of cash flows?a. The transaction should be included if payment has been made.b. Only 80 percent of the transfers should be included because the subsidiary made the sales.c. Because the transfers were from a subsidiary organization, the cash flows are reported as investing activities.d. Because of the intra-entity nature of the transfers, the amount is not reported in the consolidated cash flow statement.
- Dane, Ic., owns Carlton Corporation. For the current year, Dane reports net income (without consideration of its investment in Carlton) of $208,000 and the subsidiary reports $96,250. The parent had a bond payable outstanding on January 1, with a carrying amount of $249,300. The subsidiary acquired the bond on that date for $228,00O. During the current year, Dane reported interest expense of $29,120 while Carlton reported interest income of $25,820, both related to the intra-entity bond payable. What is consolidated net income? Multiple Choice $279,650. $328,850. $322,250. $286,250.ardner Corp. owns 80% of the voting common stock of Lockhart Co. Lockhart owns 70% of Canning Co. Gardner and Lockhart both use the initial value method to account for their investments. The following information is available from the financial statements and records of the three companies: GardnerCorp. LockhartCo. CanningCo. Separate company net income before investment income $900,000 $650,000 $150,000 Dividend income from investment in subsidiary 250,000 120,000 Deferral of intra-entity gains 110,000 80,000 20,000 Amortization expense related to excess fair value over book value of investment 40,000 25,000 Separate company net income includes intra-entity gains before the consolidating deferral but does not include dividend income from investment in subsidiary. The accrual-based net income of Gardner Corp. is calculated to beWixi Co. has the following equity investments in FSN, DELL, and ATI. (1) Which of these companies are subsidiaries of Wixi? (2) How are individual assets and liabilities of a parent and its subsidiary(ies) reported on a balance sheet? FSN stock: Wixi owns 70% of the voting common stock and has controlling influence. DELL stock: Wixi owns 5% of the voting common stock and has insignificant influence. ATI stock: Wixi owns 30% of the voting common stock and has significant influence.
- Arnold Corporation holds 70 percent of Belvista, which, in turn, owns 70 percent of Stang. Separate operating income figures (excluding investment income) and intra-entity upstream gains (on assets remaining within the consolidated group) included in the income for the current year follow:What is the amount of consolidated net income attributable to the noncontrolling interests?a. $143,100b. $163,500c. $183,000d. $213,900Dane, Inc., owns Carlton Corporation. For the current year, Dane reports net income (without consideration of its investment in Carlton) of $185,000 and the subsidiary reports $105,000. The parent had a bond payable outstanding on January 1, with a carrying amount of $209,000. The subsidiary acquired the bond on that date for $196,000. During the current year, Dane reported interest expense of $18,000 while Carlton reported interest income of $19,000, both related to the intra-entity bond payable. What is consolidated net income?a. $289,000b. $291,000c. $302,000d. $304,000The CB Company owns 65% of the HD Company. On their separate financial statements, CB Company has Trade Receivables of P975,000, including P24,000 due from HD and HD Company has Trade Receivables P328,000, including P33,000 due from XY. What figure should appear for trade receivables in CB’s consolidated statement of financial position?
- Hot Plc owns 80% of the issued share capital of Warm Plc and 40% of the issued share capital of Cold Plc. In the individual accounts, the income tax expenses for the year are as follows:3Hot Plc GH¢20,000Warm Plc GH¢18,000Cold Plc GH¢10,000At what amount should the income tax expense appear in the consolidated statement of profit or loss? [Note: The share of profit of Associate is shown in the statement of profit or loss at a figure net of tax]Choose the correct. Dane, Inc., owns Carlton Corporation. For the current year, Dane reports net income (without consideration of its investment in Carlton) of $185,000 and the subsidiary reports $105,000. The parent had a bond payable outstanding on January 1, with a carrying amount of $209,000. The subsidiary acquired the bond on that date for $196,000. During the current year, Dane reported interest expense of $18,000 while Carlton reported interest income of $19,000, both related to the intra-entity bond payable. What is consolidated net income?a. $289,000b. $291,000c. $302,000d. $304,000Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 35,000 shares of $7 par value common stock. The following information is provided on the assets and accounts payable transferred: Cost Book Value Fair Value Cash $ 32,000 $ 32,000 $ 32,000 Inventory 83,000 83,000 83,000 Land 69,000 69,000 99,000 Buildings 188,000 147,000 249,000 Equipment 95,000 74,000 123,000 Accounts Payable 58,000 58,000 58,000 Required: Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon Prepare the journal entry that Sollon recorded for the receipt of assets and accounts payable from Pab.