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 2, Problem 2.20P
Carried at Fair Value
Marlow Company acquired 40 percent of the voting shares of Brown Company on January 1, 20X8, for $85,000. The following results are reported for Brown Company:
Required
Give all journal entries recorded by Marlow for 20X8 and 20X9 assuming that it carries its investment in Brown at fair value.
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Gant 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…
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…
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
$ 241,000
Chapter 2 Solutions
Advanced Financial Accounting
Ch. 2 - What types of investments in common stock normally...Ch. 2 - Prob. 2.2QCh. 2 - Describe an investor’s treatment of an investment...Ch. 2 - How is the receipt of a dividend recorded under...Ch. 2 - How does carrying securities at fair value...Ch. 2 - Prob. 2.6QCh. 2 - Prob. 2.7QCh. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - How are a subsidiary’s dividend declarations...Ch. 2 - Prob. 2.12QCh. 2 - Give a definition of consolidated retained...Ch. 2 - Prob. 2.14QCh. 2 - Prob. 2.15QCh. 2 - Prob. 2.16AQCh. 2 - When is equity method reporting considered...Ch. 2 - How does the fully adjusted equity method differ...Ch. 2 - What is the modified equity method? When might a...Ch. 2 - Choice of Accounting Method Slanted Building...Ch. 2 - Prob. 2.2CCh. 2 - Prob. 2.3CCh. 2 - Prob. 2.4CCh. 2 - Prob. 2.5CCh. 2 - Prob. 2.6CCh. 2 - Prob. 2.1.1ECh. 2 - Multiple-Choice Questions on Accounting for Equity...Ch. 2 - Prob. 2.1.3ECh. 2 - Prob. 2.1.4ECh. 2 - Multiple-Choice Questions on Intercorporate...Ch. 2 - Prob. 2.2.2ECh. 2 - Prob. 2.3.1ECh. 2 - Prob. 2.3.2ECh. 2 - Prob. 2.3.3ECh. 2 - Prob. 2.4ECh. 2 - Acquisition Price Phillips Company bought 40...Ch. 2 - Prob. 2.6ECh. 2 - Prob. 2.7ECh. 2 - Carrying an investment at Fair Value versus Equity...Ch. 2 - Carrying an Investment at Fair Value versus Equity...Ch. 2 - Prob. 2.10ECh. 2 - Prob. 2.11ECh. 2 - Prob. 2.12ECh. 2 - Prob. 2.13ECh. 2 - Income Reporting Grandview Company purchased 40...Ch. 2 - Investee with Preferred Stock Outstanding Reden...Ch. 2 - Prob. 2.16AECh. 2 - Prob. 2.17AECh. 2 - Changes ¡n the Number of Shares Held Idle...Ch. 2 - Investments Carried at Fair Value and Equity...Ch. 2 - Carried at Fair Value Journal Entries Marlow...Ch. 2 - Consolidated Worksheet at End of the First Year of...Ch. 2 - Consolidated Worksheet at End of the Second Year...Ch. 2 - Prob. 2.23PCh. 2 - Prob. 2.24PCh. 2 - Prob. 2.25APCh. 2 - Equity-Method income Statement Wealthy...Ch. 2 - Prob. 2.27BPCh. 2 - Prob. 2.28BP
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