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 8, Problem 8.27.2BP
To determine
Inventory: Inventory is the material which is held by the company for sale. It includes raw material, work in progress goods and finish goods. It is very significant asset for a company.
To choose: The correct answer.
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2) On January 1, 20X5, Peery Company acquired 100 percent of Standard Company's
common shares at underlying book value. Peery uses the equity method in accounting for its
ownership of Standard. On December 31, 20X5, the trial balances of the two companies are as
follows:
Item
Current Assets
Depreciable Assets
Investment in Standard
Company
Other Expenses
Depreciation Expense
Dividends Declared
Accumulated Depreciation
Current Liabilities
Long-Term Debt
Common Stock
Retained Earnings
Sales
Income from Standard
Company
Peery Company
Debit
$ 238,000
300,000
100,000
90,000
30,000
32,000
Credit
$ 120,000
50,000
120,000
100,000
175,000
200,000
25,000
Standard Company
Debit
Credit
$ 95,000
170,000
70,000
17,000
10,000
$ 790,000 $ 790,000 $362,000
$ 85,000
30,000
50,000
50,000
35,000
112,000
$362,000
Required:
1. Prepare the consolidation entries needed as of December 31, 20X5, to complete a
consolidation worksheet.
2. Prepare a three-part consolidation worksheet as of December 31, 20X5.
Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completio
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 $100,000. Summarized balance sheets for Split on the dates Indicated are as follows:
20X7
Assets
Cash
Accounts Receivable
Inventory
Buildings & Equipment (net)
$ 44,000
57,000
78,000
350,000
Total Assets
Accounts Payable
Bonds Payable
$ 529,000
Liabilities & Equities
Common Stock
Retained Earnings
Total Liabilities & Equities
December 31
20X8
20X9
$ 64,000
105,000
155,000
205,000
$ 74,000
97,000
108,000
330,000
$ 609,000
$ 114,000
105,000
155,000
235,000
$ 94,000
127,000
168,000
310,000
$ 699,000
$ 154,000
105,000
155,000
285,000
$ 529,000
S 609 000
$ 699,000
Split paid dividends of $21,000…
Prime Corporation acquired 80 percent of Steak Company's voting shares on January 1, 20X4, for $280,000 in cash and marketable
securities. At that date, the noncontrolling Interest had a fair value of $70,000 and Steak reported net assets of $300,000. Assume
Prime uses the fully adjusted equity method. Trial balances for the two companies on December 31, 20X7, are as follows:
Steak Company
Iten
Cash
Accounts Receivable
Inventory
Buildings and Equipment
Investment in Steak Company
Cost of Goods Sold
Depreciation Expense
Other Expenses
Dividends Declared
Accumulated Depreciation
Accounts Payable
Bonds Payable
Bond Premium
Connon Stock
Additional Paid-in Capital
Retained Earnings
Sales
Other Income
Income from Steak Company
Total
No
A
B
C
D
E
LL
F
G
Event
1
Additional Information
1. The full amount of the differential at acquisition was assigned to buildings and equipment with a remaining 10-year economic life.
2. Prime and Steak regularly purchase Inventory from each other. During 20X6,…
Chapter 8 Solutions
Advanced Financial Accounting
Ch. 8 - Prob. 8.1QCh. 8 - What is meant by a constructive bond retirement in...Ch. 8 - Prob. 8.3QCh. 8 - Prob. 8.4QCh. 8 - When a parent company sells land to a subsidiary...Ch. 8 - Prob. 8.7QCh. 8 - Prob. 8.8QCh. 8 - Prob. 8.9QCh. 8 - Prob. 8.10QCh. 8 - Prob. 8.11Q
Ch. 8 - How is the amount of income assigned to the...Ch. 8 - Prob. 8.13QCh. 8 - How would the relationship between interest income...Ch. 8 - Prob. 8.15QCh. 8 - Prob. 8.16QCh. 8 - Prob. 8.17QCh. 8 - Prob. 8.18QCh. 8 - Prob. 8.1CCh. 8 - Prob. 8.2CCh. 8 - Prob. 8.4CCh. 8 - Prob. 8.1ECh. 8 - Bond Sale from Parent to Subsidiary (StraightLine...Ch. 8 - Computation of Transfer Price (Effective Interest...Ch. 8 - Prob. 8.2AECh. 8 - Prob. 8.3ECh. 8 - Bond Sale at Discount (Straightline Method) Assume...Ch. 8 - Evaluation of Intercorporate Bond Holdings...Ch. 8 - Prob. 8.5.1ECh. 8 - Prob. 8.5.2ECh. 8 - MultipleChoice Questions (Effective Interest...Ch. 8 - Prob. 8.5.4ECh. 8 - Prob. 8.5.5ECh. 8 - Prob. 8.5.6ECh. 8 - Prob. 8.5.1AECh. 8 - Prob. 8.5.2AECh. 8 - Prob. 8.5.3AECh. 8 - Prob. 8.5.4AECh. 8 - Prob. 8.6.1ECh. 8 - Prob. 8.6.2ECh. 8 - MultipleChoice Questions (Effective Interest...Ch. 8 - Prob. 8.6.1AECh. 8 - Prob. 8.6.2AECh. 8 - Prob. 8.6.3AECh. 8 - Prob. 8.7ECh. 8 - Prob. 8.7AECh. 8 - Prob. 8.8ECh. 8 - Prob. 8.8AECh. 8 - Prob. 8.9ECh. 8 - Prob. 8.9AECh. 8 - Prob. 8.10ECh. 8 - Prob. 8.10AECh. 8 - Prob. 8.11ECh. 8 - Prob. 8.11AECh. 8 - Evaluation of Bond Retirement (Effective Interest...Ch. 8 - Prob. 8.12AECh. 8 - Prob. 8.13ECh. 8 - Prob. 8.13AECh. 8 - Prob. 8.14PCh. 8 - Prob. 8.14APCh. 8 - Prob. 8.15PCh. 8 - Prob. 8.15APCh. 8 - Prob. 8.16PCh. 8 - Prob. 8.16APCh. 8 - Prob. 8.17PCh. 8 - Prob. 8.17APCh. 8 - Prob. 8.18PCh. 8 - Prob. 8.18APCh. 8 - Prob. 8.19APCh. 8 - Prob. 8.20PCh. 8 - Prob. 8.20APCh. 8 - Prob. 8.21PCh. 8 - Prob. 8.21APCh. 8 - Prob. 8.22APCh. 8 - Prob. 8.22BPCh. 8 - Prob. 8.23PCh. 8 - Prob. 8.23APCh. 8 - Prob. 8.24PCh. 8 - Prob. 8.24APCh. 8 - Intercorporate Inventory and Debt Transfers...Ch. 8 - Intercorporate Inventory and Debt Transfers...Ch. 8 - Prob. 8.26PCh. 8 - Prob. 8.26APCh. 8 - Prob. 8.27.1BPCh. 8 - Prob. 8.27.2BPCh. 8 - Prob. 8.27.3BPCh. 8 - Prob. 8.27.4BPCh. 8 - Prob. 8.27.5BPCh. 8 - Prob. 8.27.6BPCh. 8 - Prob. 8.27.7BPCh. 8 - Prob. 8.27.8BPCh. 8 - Prob. 8.27.9BPCh. 8 - Prob. 8.27.10BPCh. 8 - Prob. 8.28PCh. 8 - Prob. 8.28APCh. 8 - Prob. 8.29BPCh. 8 - Prob. 8.30BP
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