ADVANCED FINANCIAL ACCT.(LL) >CUSTOM<
12th Edition
ISBN: 9781260824292
Author: Christensen
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 2, Problem 2.15Q
To determine
Concept introduction: The business combination is a process where two entities merge to take the benefit of synergies for a common goal.
To explain: The reason to record the beginning of retained earnings balance for each company in the three-part consolidation worksheet rather than just the ending balance.
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In a consolidated statements workpaper, which items are carried forward from one section to another?
Select one:
a. The total of the income section to the retained earnings section and then the total of the retained earnings section to the balance sheet section.
b. The eliminations must balance for each section in order to carry them forward.
c. Parents retained earnings, but not Subsidiary
d. Each section on the workpaper is separate, so no numbers are carried forward
Why do we need to pass the consolidation elimination entry every time we prepare a consolidated financial statement
Why do we need to pass the consolidation elimination entry everytime we prepare a consolidated financial statement?
Chapter 2 Solutions
ADVANCED FINANCIAL ACCT.(LL) >CUSTOM<
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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- When the income statement includes discontinued operations, which amounts require per share presentation?arrow_forwardConsolidation accountinga. eliminates all liabilities.b. reports the receivables and payables of the parent company only.c. combines the accounts of the parent company and its subsidiary companies.d. all of the abovearrow_forwardWhich of the following is a characteristic of the cost method of accounting for subsidiary operations? Select one: a. Parent company net income equals consolidated net income. b. More working paper eliminations are required than for the equity method of accounting. c. Consolidated amounts differ from the comparable amounts under the equity method of accounting. d. None of the abovearrow_forward
- How is the amount assigned to the non-controlling interest normally determined when a consolidated balance sheet is prepared immediately after a business combination?arrow_forwardwhat is the retained earnings of the combined entity immediately after the business combination?arrow_forwardIt is required to present earnings per share for: Select one: a.income from continuing operations before the effect of discontinued operations. b.the gross profit. c.operating income. d.Income before Other Comprehensive Income.arrow_forward
- When we are preparing consolidated financial statements, will the financial statements of the parent entity, or the subsidiary companies, as at the beginning of the financial period reflect prior consolidation adjustments? Why?arrow_forwardWhich consolidation method should be used in preparing consolidated financial statements in accordance with IFRS? A. Proportionate consolidation method.B. Either identifiable net assets or fair value enterprise method.C. New entity method.D. Parent company method.arrow_forwardIf a company prepares a consolidated income statement, IFRS requires that net income be reported O for the subsidiary companies only. for both the parent company and the subsidiary companies. O as a single amount only. O for the parent company only.arrow_forward
- what amount will be reported for Shareholders’ Equity in the combined company’s statement of financial position immediately following the business combination?arrow_forwardWhat is the amount of gain or loss to be recognized by WAVY Company in its income statement as a result of reclassification? (If gain, leave the numerical figure positive; if loss, put a negative (-) sign before the numerical figure)arrow_forwardDetermine the consolidated balances which Peris would present on their consolidated balance sheet for the following accounts 7. additional paid in capital 8. retained earningsarrow_forward
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