On January 1, 2019, S acquires 70% of S for $490,000 cash. The remaining 30% of S’s shares continued to trade at a total value of $210,000. The new subsidiary reported c
Q: investment affect the balances computed in requirement (a)? Which method of accounting for this…
A: Consolidated financial statements are the final reports of a company, prepared at the end of a…
Q: Foxx Corporation acquired all of Greenburg Company's outstanding stock on January 1, 2019, for…
A: Solution: Since As per Chegg's guidelines each question is answered to a maximum of four sub parts.…
Q: On January 1, 2021, Jimin Co. acquired 30,000 ordinary shares out of the 100,000 outstanding shares…
A: Associate company is the company where a company acquire 20-50% of the equity share capital of…
Q: On January 1, 2020, McIlroy, Inc., acquired a 60 percent interest in the common stock of Stinson,…
A: A journal entry is a form of accounting entry that is used to report a business transaction in a…
Q: BuyCo, Inc., holds 24 percent of the outstanding shares of Marqueen Company and appropriately…
A: Equity investee means any Person in which the company or any subsidiary holds an ownership interest…
Q: Harper, Inc., acquires 40 percent of the outstanding voting stock of Kinman Company on January 1,…
A: Equity accounting: Equity accounting is a process for recording investments in associated companies.…
Q: On January 1, 2019, Telconnect acquires 70 percent of Bandmor for $490,000 cash. The remaining 30…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: Martinez’s journal entries
A: Date Particulars LF Debit$ Credit$ 07/01/2020 Common stock of Paulson Co…
Q: On August 31, 2020, SG Corporation (SME) purchased all the net assets of Popsters Corporation by…
A: The capitalized cost of the investment is P2,949,000.
Q: On January 1, 2018, Sledge had common stock of $120,000 and retained earnings of $260,000. During…
A:
Q: On January 1, 2020, McIlroy, Inc., acquired a 60 percent interest in the common stock of Stinson,…
A: Acquisition-date fair value allocation and excess amortizations a. Consideration transferred…
Q: BuyCo, Inc., holds 25 percent of the outstanding shares of Marqueen Company and appropriately…
A: Gross profit percentage = ( $ 75000 - $ 60000 ) / $ 75000 = 20% Ownership % = 25%
Q: On January 1, 2018, Pine Company owns 40 percent (124,000 shares) of Seacrest, Inc., which it…
A: Income statement is a statement that helps in determining the income or the profit and loss of a…
Q: STI Co. acquired 55% of the outstanding shares of UE Inc on August 1, 2021 at a total cost of…
A: Non Controlling Interest For the calculation of non controlling interest the minority interest which…
Q: On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration…
A: Solution Non controlling interest is a scenario in which a shareholder holds less than half of the…
Q: On January 1, 2022, Sun Company acquired 85% of outstanding shares of Moon Corp. The consideration…
A: Consolidation - Legally speaking, consolidation refers to the merging of two or more enterprises,…
Q: Nizwa Corp maintains the investment account in Al Izz Corp using the equity method. During 2019, Al…
A: Investment balance amount shown is step 2
Q: On January 1, 2021, Sledge had common stock of $190,000 and retained earnings of $330,000. During…
A: The equity method is a method used by a company to record the profits earned by its investment in…
Q: On January 1, 2019, Orange Co. purchased 40% of the outstanding ordinary shares of New Company…
A: The value which is paid to acquire the other company’s net assets is referred to as the acquisition…
Q: On January 1, 2021, Jimin Co. acquired 30,000 ordinary shares out of the 100,000 outstanding shares…
A: On 01.01.2021, Jimin Co. acquired ordinary shares of HYBE Inc. = 30000 shares Outstanding shares of…
Q: On January 1, 2020, Adamson, Inc. acquired the outstanding voting common stock of Skyview Corp. for…
A: Consolidated financial statements can be defined as the combined financial statements of the parent…
Q: Branson paid $573,200 cash for all of the outstanding common stock of Wolfpack, Inc., on January 1,…
A: Disclaimer: “Since you have posted a question with multiple sub-parts, we will solve the first three…
Q: On January 2, 2021, X Co. acquired all the ordinary share of Y Co. for P2,060,000. On that date, Y…
A: Goodwill is calculated when Purchase consideration paid to acquire a company (acquiree) is greater…
Q: On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration…
A: Solution Working note - 1- NCI beginning 750000 NCI income 534750 NCI share dividend…
Q: BuyCo, Inc., holds 28 percent of the outstanding shares of Marqueen Company and appropriately…
A: The equity method is the one that is applied when a company has 20% to 50% of stock ownership…
Q: On January 3, 2021, Matteson Corporation acquired 40 percent of the outstanding common stock of…
A: Calculation under Equity method:
Q: On January 1, 2021, Sledge had common stock of $280,000 and retained earnings of $420,000. During…
A: Journal entry is the process of documenting commercial transactions for the first time in the books…
Q: Corporation by transferring cash of P500,000 and issuing 40,000 ordinary shares with par value of…
A: A cost involved in the acquisition of ownership in the entity for long-term benifits to the entity.…
Q: On January 1, 2021, Pine Company owns 40 percent (76,000 shares) of Seacrest, Ic., which it…
A: If a company have ownership in another company, its assets and liabilities are subject to…
Q: On January 1, 2020, Mcllroy, Inc., acquired a 60 percent interest in the common stock of Stinson,…
A:
Q: On August 31, 2020, SG Corporation (SME) purchased all the net assets of Popsters Corporation by…
A: Purchase consideration = Cash paid + fair value of shares + consulting fees + listing fee
Q: On January 1, 2021, merma Corp. purchased 80% of the outstanding shares of sand Co. at a cost of…
A: Consolidated net income is associated with parent companies and their subsidiaries. A parent company…
Q: On January 1, 2019, Phoenix Co. acquired 100 percent of the outstanding voting shares of Sedona Inc.…
A: Consolidation is the combination of parent company and subsidiary company books of accounts.
Q: On January 1, 2021, Sledge had common stock of $240,000 and retained earnings of $380,000. During…
A: Non Controlling Interest - It is type of interest in the company where shareholder owns less than…
Q: On January 1, 2020, Stream Company acquired 26 percent of the outstanding voting shares of Q-Video,…
A: Equity method: An equity method is an accounting form used for intercompany investments. The equity…
Q: On January 1, 2021, Patter Corp. purchased 80% of the outstanding shares of Saturn Co. at a cost of…
A: Solution Working- 1- Amortization excess = 50000/4 =12500. 2-Inter company dividend =…
Q: Foxx Corporation acquired all of Greenburg Company’s outstanding stock on January 1, 2019, for…
A: An acquisition is when a company purchases all shares of another company to gain control of that…
Q: On May 31, 2021, Armstrong LTD paid $3,500,000 to acquire all of the common stock of Hall…
A: Impairment loss refers to the loss in the value of asset when the recoverable amount of assets gets…
Q: On January 1, 2019, GRANGER Co. acquired 80% interest in HISTORIA, Inc. by issuing 5,000 shares with…
A: Consolidated financial statements are those statements that states the cash flows, assets, expenses,…
Q: On July 1, 2021, Harvest, Inc., acquires 60 percent of Patricia Company for $360,000. The remaining…
A: Introduction goodwill is considered as intangible assets that is linked with purchasing of one…
Q: On August 31, 2020, Laida Corporation purchased all the net assets of Magtalas Corporation by…
A: Share Premium Share premium is the addition revenue which are derived in the business after issuing…
Q: On August 1, 2020, Whispering Corporation purchased 20% of the outstanding voting shares in WLT…
A:
Q: On January 1, 2021, Sledge had common stock of $210,000 and retained earnings of $350,000. During…
A: Solution Net income means income after deducting costs , allowances and taxes.
Q: On January 3, 2019, Persoff Corporation acquired all of the outstanding voting stock of Sea Cliff,…
A: a) Sea cliff acquisition date fair value 68,15,000 Less: Sea cliff book value…
Q: Hot Inc. owns 60% of Cold Inc, which it purchased on January 1, 2019 for $540,000. On that date,…
A: Working note: Computation of fair value of identifiable net assets and non-controlling interest of C…
Q: On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration…
A: Solution Consolidated net income is the sum of net income of the parent company excluding any income…
Q: On January 1, 2019, Penn Incorporated paid $350,000 for 70% of Sylvania Company's outstanding…
A: “Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get…
Q: On August 31, 2020, Laida Corporation purchased all the net assets of Magtalas Corporation by…
A: The share premium account balance cannot be utilized for distributing dividends but can be utilized…
Q: Foxx Corporation acquired all of Greenburg Company’s outstanding stock on January 1, 2019, for…
A: . Acquisition-Date Fair value Allocation and Amortization: consideration transferred 1//1/19…
Q: On January 1, 2010, XYZ Corp. acquired 90% of the voting common stock of ABC Corp. Amortization…
A: Consolidation is a process in which the financials of two or more companies are merged together.…
On January 1, 2019, S acquires 70% of S for $490,000 cash. The remaining 30% of S’s shares continued to trade at a total value of $210,000. The new subsidiary reported common stock of $300,000 on that date, with retained earnings of $180,000. A patent was undervalued in the company’s financial records by $30,000. This patent had a five-year remaining life.
Year Net Income Dividends
2019 75,000 39,000
2020 96,000 44,000
2021 110,000 60,000
Assuming P has applied the equity method, make the needed consolidation entries as of December 31, 2021.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- On January 1, 2022, Telconnect acquires 70 percent of Bandmor for $490,000 cash. The remaining 30 percent of Bandmor's shares continued to trade at a total value of $210,000. The new subsidiary reported common stock of $300,000 on that date, with retained earnings of $180,000. A patent was undervalued in the company's financial records by $30,000. This patent had a five-year remaining life. Goodwill of $190,000 was recognized and allocated proportionately to the controlling and noncontrolling interests. Bandmor earns net income and declares cash dividends as follows: Year Net Income $ 75,000 2022 2023 96,000 2024 110,000 On December 31, 2024, Telconnect owes $22,000 to Bandmor. Dividends $ 39,000 44,000 60,000 Required: a. If Telconnect has applied the equity method, what consolidation entries are needed as of December 31, 2024? b. If Telconnect has applied the initial value method, what Entry *C is needed for a 2024 consolidation? c. If Telconnect has applied the partial equity…On January 1, 2019, Telconnect acquires 70 percent of Bandmor for $490,000 cash. The remaining 30 percent of Bandmor’s shares continued to trade at a total value of $210,000. The new subsidiary reported common stock of $300,000 on that date, with retained earnings of $180,000. A patent was undervalued in the company’s financial records by $30,000. This patent had a five-year remaining life. Goodwill of $190,000 was recognized and allocated proportionately to the controlling and noncontrolling interests. Bandmor earns net income and declares cash dividends as follows: Year Net Income Dividends 2019 $ 75,000 $ 39,000 2020 96,000 44,000 2021 110,000 60,000 On December 31, 2021, Telconnect owes $22,000 to Bandmor. If Telconnect has applied the equity method, what consolidation entries are needed as of December 31, 2021? If Telconnect has applied the initial value method, what Entry *C is needed for a 2021 consolidation? If Telconnect has applied the…Pag ibig Corporation acquired 75% of outstanding stocks of Sagigilid Company on January 1, 2019, for P450,000 in cash. Sagigilid Company had a book value of P480,000 on that date. NCI and goodwill were to be measured using the partial goodwill approach. However, an equipment with a 7-year life was overvalued by P35,000 on Sagigilid Company’s financial statement. Also, a building with a 25-year life and land were undervalued by P50,000 and P25,000 respectively. Subsequent to acquisition, Sagigilid Company reported the following: Year CI Dividends Paid 2019 60,000 12,000 2020 80,000 25,000 2021 120,000 50,000 In accounting for investment, Pag ibig Company uses the cost method. Selected accounts taken from the financial records of these two companies as of December 31, 2021 are as follows:…
- On January 1, 2021, Pine Company owns 40 percent (84,000 shares) of Seacrest, Ic., which it purchased several years ago for $449,400. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2021, is $588,000. Excess patent cost amortization of $25,200 is still being recognized each year. During 2021, Seacrest reports net income of $606,000 and a $252,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Pine sold 16,800 shares of Seacrest on August 1, 2021, for $170,401 in cash. However, Pine retains the ability to significantly influence the investee. During the last quarter of 2020, Pine sold $61,000 in inventory (which it had originally purchased for only $36,600) to Seacrest. At the end of that fiscal year, Seacrest's inventory retained $13,300 (at sales price) of this merchandise, which was subsequently sold in the first quarter of…On January 1, 2018, D, Incorporated, paid $88,959 for a 30% interest in S Corporation. This investee had assets with a book value of $500,000 and liabilities of $300,000. A patent held by S Inc having a book value of $10,000 was actually worth $48,000 with a four year remaining life. Any goodwill associated with this acquisition is considered to have an indefinite life. During 2018, S Inc reported income of $55,900 and paid dividends of $28,900 while in 2019 it reported income of $79,900 and dividends of $29,900. Assume D Inc. Has the ability to significantly influence the operations of S Inc. During the 2018, S Corporation selling inventory costing 40,000 to to D Corporation for 60,000 at the end of fiscal year, D Inc, still retain 20,000. During the 2019 S Corporation selling inventory costing 35,000 to to D Corporation for 50,000 at the end of fiscal year, d Inc. still retain 15,000. The retain inventoy was selling at the beginning of the following year. 8-How Much Your Equity…On January 2, 2019, ABC Co. acquired 80% of the outstanding common stock of Shade Co. for ₱1,344,000 with no goodwill resulting from the acquisition. The following selected account balances were taken from the accounting records of XYZ Co. Details shown doe XYZ Co. in the image. The building has an estimated useful life of 10 years and the equipment is expected to last for 5 years. For the year 2019, ABC Co. reported net income from own operations of ₱2,240,000 and XYZ Co. reported ₱600,000 net income from own operations. ABC Co. accounts its investment in XYZ Co. using the cost method. What is the consolidated income statement for the year 2019. NCI in the consolidated FS for the year 2019.
- On March 31, 2021, JISOO Company purchased 32,000 shares of the 40,000 outstanding shares of ROSECompany at a price of P1,200,000 with an excess of P30,000 over the book value of ROSE Company’snet assets. P13,000 of the excess is attributed to an undervalued equipment with a remaining usefullife of 10 years from the date of acquisition and the rest of the amount is attributed to goodwill. Forthe year 2021, JISOO Company reported a net income of P750,000 and paid dividends of P180,000.While ROSE Company reported a net income of P240,000 which was evenly earned during the yearand paid dividends to JISOO Company amounting to P39,000. Goodwill was not impaired in 2021.The retained earnings of JISOO Company at the end of 2021 per books is P1,025,000. JISOO Companyuses the cost method to account for its investment in ROSE Company. Non-controlling interest ismeasured at fair market value. Requirement:Compute for the non-controlling interest in net assets on December 31, 2021.On July 1, 2022, Livermore, Inc., acquired 60 percent of Rough Company for $420,000. The remaining 40 percent of Rough's outstanding shares continue to trade at a collective value of $280,000. On that date patent owned by Rough with 10-year remaining life is undervalued by $100,000. Rough has a book value of net assets at $480,000 on January 1, 2022. The affiliates report the following 2022 amount from their own separate operations: Livermore Rough Revenues $700,000 $220,000 Expenses 450,000 70,000 Dividends (declared quarterly) 124,000 30,000 Assume Rough's revenues and expenses occurred uniformly throughout the year. On 2022 consolidated income statement, what is the amount of consolidated net income allocated to the controlling interest? a. $302,000 b. $286,000 c. $292,000 d. $264,000On January 1, 2021, Pine Company owns 40 percent (76,000 shares) of Seacrest, Inc., which it purchased several years ago for $423,700. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2021, is $549,100. Excess patent cost amortization of $22,800 is still being recognized each year. During 2021, Seacrest reports net income of $558,000 and a $228,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Pine sold 15,200 shares of Seacrest on August 1, 2021, for $165,354 in cash. However, Pine retains the ability to significantly influence the investee. During the last quarter of 2020, Pine sold $59,000 in inventory (which it had originally purchased for only $35,400) to Seacrest. At the end of that fiscal year, Seacrest's inventory retained $14,600 (at sales price) of this merchandise, which was subsequently sold in the first quarter…
- Adams Corporation acquired 90 percent of the outstanding voting shares of Barstow, Inc., on December 31, 2019. Adams paid a total of $603,000 in cash for these shares. The 10 percent noncontrolling interest shares traded on a daily basis at fair value of $67,000 both before and after Adams's acquisition. On December 31, 2019, Barstow had the following account balances: Current assets Land Buildings (10-year remaining life) Equipment (5-year remaining life) Patents (10-year remaining life) Notes payable (due in years) Common stock Retained earnings, 12/31/19 Debits Current assets Land Buildings. Equipment Investment in Barstow, Inc. Cost of goods sold Depreciation expense December 31, 2021, adjusted trial balances for the two companies follow: Adams Corporation Interest expense Dividends declared Total debits Credits Notes payable Common stock Retained earnings, 1/1/21 Revenues Investment income Total credits Book Value $ 160,000 120,000 220,000 160,000 $ 0 (200,000) (180,000) (280,000)…Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, in exchange for $486,000 in cash. The subsidiary's stockholders' equity accounts totaled $470,000, and the noncontrolling interest had a fair value of $54,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $45,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (four-year remaining life). Brey reported net income from its own operations of $80,000 in 2019 and $96,000 in 2020. Brey declared dividends of $27,000 in 2019 and $31,000 in 2020. Brey sells inventory to Pitino as follows: Year Cost to Brey Transfer Price to Pitino Inventory Remaining at Year-End (at transfer price) 2019 $ 85,000 $ 195,000 $ 41,000 2020 118,250 215,000 53,000 2021 156,000 240,000 40,000 At December 31, 2021, Pitino owes Brey $32,000 for inventory acquired during the…On January 1, 2021, Pine Company owns 40 percent (140,000 shares) of Seacrest, Inc., which it purchased several years ago for $644,000. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2021, is $875,000. Excess patent cost amortization of $42,000 is still being recognized each year. During 2021, Seacrest reports net income of $942,000 and a $420,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Pine sold 28,000 shares of Seacrest on August 1, 2021, for $223,454 in cash. However, Pine retains the ability to significantly influence the investee. During the last quarter of 2020, Pine sold $75,000 in inventory (which it had originally purchased for only $45,000) to Seacrest. At the end of that fiscal year, Seacrest's inventory retained $12,300 (at sales price) of this merchandise, which was subsequently sold in the first quarter…
