Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Chapter 2, Problem 2.7.2P
To determine
Business combination:
Business combination refers to the combining of one or more business organizations in a single entity. The business combination leads to the formation of combined financial statements. After business combination, the entities having separate control merges into one having control over all the assets and liabilities. Mergers and acquisition are types of business combinations.
Consolidated financial statements:
The consolidated financial statements refer to the combined financial statements of the entities which are prepared at the year-end. The consolidated financial statements are prepared when one organization is either acquired by the other entity or two organizations merged to form the new entity. The consolidated financial statements serves the purpose of both entities on financial information.
:
Completion of a consolidated worksheet for Company A and Company S as of December 31, 2015.
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SUBSEQUENT TO DATE OF ACQUISITION
CHAPTER 3: CONSOLIDATION-
21. Patriotism Company purchased 70% of Strength Company on
January 2, 2022 for P420,000. At that date Strength had inventory
and plant assets with market values greater than book values in the
amount of P50,000 and P90,000, respectively. The inventory and
plant assets were assigned to have a remaining life of six months and
five years, respectively. Strength Company has 2022 income and
dividends of P160,000 and P60,000, respectively and 2023 income
and dividends of P210,000 and P80,000, respectively.
The balance of non-controlling interest account on December 31.
180,000
NU beg (420K 787. x30%.)
2023 must be:
a. P223,200
b. P276,000
P169,200
с.
d. P136,800
22. Jenny Company acquired 80% of the equity share capital of Smith
Car Inc. wants to purchase the net assets of Paint Inc. for purposes of horizontal consolidation and will pay $750,000 cash for them. The balance sheet for Paint Inc. on the date of purchase is as follows:
Assets
Liabilities & Owners' Equity
Book Value
Fair Market Value
Book Value
Fair Market Value
Cash
$0
$0
A/P
$75,000
$75,000
A/R
60,000
50,000
Notes Payable
25,000
25,000
Inventory
75,000
80,000
Mortgage Payable
50,000
50,000
Net Fixed Assets
150,000
200,000
Total Liabilities:
$150,000
Patents
0
25,000
Common Stock
50,000
Retained Earnings
85,000
Total Equity:
$135,000
Total Assets:
$285,000
Total Liabilities & O.E.:
$285,000
A) Prepare the journal entry amounts for this asset acquisition on the books of Car Inc. by entering the proper debit and credit amounts in the gray-shaded cells below.
Account
Debits
Credits
A/R
Inventory
Net…
10 Company A acquired 100% of Company B on January 1 2018 at a premium to book value and wants to prepare a consolidated balance sheet for the combined entity as of December 31, 2018 The financial statements for each individual entity are for the period ending December 31, 2018.
Balance Sheet Company A Company B
Sales 400,000 250,000
Cost of Goods Sold (150,000) (100,000)
Depreciation (30,000) (25,000)
Net Income 220,000 125,000
Statement of Retained Earnings
Beginning Balance 230,000 100,000
Net Income 220,000 125,000
Ending Balance 450,000 225,000
Balance Sheet Totals
Cash 20,000 40,000
Accounts Receivable 30,000 25,000
Inventory 60,000 60,000…
Chapter 2 Solutions
Advanced Accounting
Ch. 2 - Prob. 1UTICh. 2 - Prob. 2UTICh. 2 - Prob. 3UTICh. 2 - Prob. 4UTICh. 2 - Prob. 5UTICh. 2 - Prob. 6UTICh. 2 - Santos Corporation is considering investing in...Ch. 2 - Prob. 2.1ECh. 2 - Prob. 2.2ECh. 2 - Prob. 3.1E
Ch. 2 - Prob. 3.2ECh. 2 - Prob. 4.1ECh. 2 - Prob. 4.2ECh. 2 - Prob. 4.3ECh. 2 - Prob. 5.1ECh. 2 - Prob. 5.2ECh. 2 - Prob. 6.1ECh. 2 - Prob. 6.2ECh. 2 - Prob. 7.1ECh. 2 - Prob. 7.2ECh. 2 - Prob. 8.1ECh. 2 - Prob. 9.1ECh. 2 - Prob. 9.2ECh. 2 - Prob. 9.4ECh. 2 - Prob. 2A.1AECh. 2 - Prob. 2.1.1PCh. 2 - Prob. 2.1.2PCh. 2 - Prob. 2.2.1PCh. 2 - Prob. 2.2.2PCh. 2 - Prob. 2.2.3PCh. 2 - Prob. 2.3.1PCh. 2 - Prob. 2.3.2PCh. 2 - Prob. 2.3.3PCh. 2 - Prob. 2.4.1PCh. 2 - Prob. 2.4.2PCh. 2 - Prob. 2.4.3PCh. 2 - Prob. 2.5.1PCh. 2 - Prob. 2.5.2PCh. 2 - Prob. 2.5.3PCh. 2 - Prob. 2.6.1PCh. 2 - Prob. 2.6.2PCh. 2 - Prob. 2.7.1PCh. 2 - Prob. 2.7.2PCh. 2 - Prob. 2.8.1PCh. 2 - Prob. 2.8.2PCh. 2 - Prob. 2.9.1PCh. 2 - Prob. 2.9.2PCh. 2 - Prob. 2.10.1PCh. 2 - Prob. 2.11.1PCh. 2 - Prob. 2.12.1PCh. 2 - Prob. 2.12.2PCh. 2 - Prob. 2.13.1PCh. 2 - Prob. 2.13.2PCh. 2 - Prob. 2.14.1PCh. 2 - Prob. 2.14.2PCh. 2 - Prob. 2.15.1PCh. 2 - Prob. 2.15.2PCh. 2 - Prob. 2A.1.1APCh. 2 - Prob. 2A.1.2APCh. 2 - Prob. 2.1.1CCh. 2 - Prob. 2.1.2C
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