Journal entries is a systematic method of recording transactions as and when they occur. It is a summary of transactions divided into the debit and credit items that are recorded chronologically. It is an act of keeping and recoding all the transactions occurring in the business. The journal entry on P’s book in acquisition.

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.26P

a.

To determine

Introduction: Journal entries is a systematic method of recording transactions as and when they occur. It is a summary of transactions divided into the debit and credit items that are recorded chronologically. It is an act of keeping and recoding all the transactions occurring in the business.

The journal entry on P’s book in acquisition.

a.

Expert Solution

Explanation of Solution

Recording the initial investment in S’ books.

Particular	Amount $$$	Amount $$$
Investment in S Dr.	$270,000$
Cash Cr.		$270,000$

b.

To determine

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

b.

Expert Solution

Explanation of Solution

Consolidated worksheet:

Book value
	NC $10%$	+	P	=	Common stock	=	Retained earnings
Original book value	$30,000$		$270,000$		$200,000$		$100,000$

Balance sheet	P’s	S’s	Elimination DR	Elimination CR	consolidated
Cash	$55,000$	$20,000$			$75,000$
Amount received	$50,000$	$30,000$			$80,000$
Inventory	$100,000$	$60,000$			$160,000$
Investment in S	$270,000$			270,000	$0$
Land	225,000	100,000			325,000
Building and equipment	700,000	200,000		10000	890,000
Accumulated depreciation	(400,000)	(10,000)	10000		(400,000)
Total assets	$1,000,000$	$400,000$	$10,000$	$280,000$	$1,130,000$
Account payable	$75,000$	$25,000$			$100,000$
Bonds	$200,000$	$75,000$			$275,000$
Common stock	500000	500000	200000	200000	500000
Retain earning	225000	100000	100000		225000
NCI in NA of S				$30,000$	$30,000$
Total liabilities	$1,000,000$	$400,000$	$300,000$	$30,000$	$1,130,000$

c.

To determine

Concept Introduction:

Consolidated financial statements are financial statement maintained by entity with multiple subsidiary and division.

To Prepare:

The Consolidated balance sheet immediately following the acquisition.

c.

Expert Solution

Explanation of Solution

The Consolidated balance sheet immediately following the acquisition is as follows:

P and S
Consolidated Balance sheet
Particulars	Amount	Amount
Cash		$$75,000$
Accounts Receivable		$$80,000$
Inventory		$$160,000$
Land		$$325,000$
Building and Equipment	$$890,000$
Less: Accumulated Depreciation	$($400,000)$	$$490,000$
Total assets		$$1,130,000$
Accounts Payable		$$100,000$
Bonds Payable		$$275,000$
Common Stock		$$500,000$
Retained earnings		$$225,000$
Non-controlling interest		$$30,000$
Total liabilities and stock holders’ equity		$$1,130,000$

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.26P

a.

To determine

Introduction: Journal entries is a systematic method of recording transactions as and when they occur. It is a summary of transactions divided into the debit and credit items that are recorded chronologically. It is an act of keeping and recoding all the transactions occurring in the business.

The journal entry on P’s book in acquisition.

a.

Expert Solution

Explanation of Solution

Recording the initial investment in S’ books.

Particular	Amount $$$	Amount $$$
Investment in S Dr.	$270,000$
Cash Cr.		$270,000$

b.

To determine

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

b.

Expert Solution

Explanation of Solution

Consolidated worksheet:

Book value
	NC $10%$	+	P	=	Common stock	=	Retained earnings
Original book value	$30,000$		$270,000$		$200,000$		$100,000$

Balance sheet	P’s	S’s	Elimination DR	Elimination CR	consolidated
Cash	$55,000$	$20,000$			$75,000$
Amount received	$50,000$	$30,000$			$80,000$
Inventory	$100,000$	$60,000$			$160,000$
Investment in S	$270,000$			270,000	$0$
Land	225,000	100,000			325,000
Building and equipment	700,000	200,000		10000	890,000
Accumulated depreciation	(400,000)	(10,000)	10000		(400,000)
Total assets	$1,000,000$	$400,000$	$10,000$	$280,000$	$1,130,000$
Account payable	$75,000$	$25,000$			$100,000$
Bonds	$200,000$	$75,000$			$275,000$
Common stock	500000	500000	200000	200000	500000
Retain earning	225000	100000	100000		225000
NCI in NA of S				$30,000$	$30,000$
Total liabilities	$1,000,000$	$400,000$	$300,000$	$30,000$	$1,130,000$

c.

To determine

Concept Introduction:

Consolidated financial statements are financial statement maintained by entity with multiple subsidiary and division.

To Prepare:

The Consolidated balance sheet immediately following the acquisition.

c.

Expert Solution

Explanation of Solution

The Consolidated balance sheet immediately following the acquisition is as follows:

P and S
Consolidated Balance sheet
Particulars	Amount	Amount
Cash		$$75,000$
Accounts Receivable		$$80,000$
Inventory		$$160,000$
Land		$$325,000$
Building and Equipment	$$890,000$
Less: Accumulated Depreciation	$($400,000)$	$$490,000$
Total assets		$$1,130,000$
Accounts Payable		$$100,000$
Bonds Payable		$$275,000$
Common Stock		$$500,000$
Retained earnings		$$225,000$
Non-controlling interest		$$30,000$
Total liabilities and stock holders’ equity		$$1,130,000$

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.26P

a.

To determine

Introduction: Journal entries is a systematic method of recording transactions as and when they occur. It is a summary of transactions divided into the debit and credit items that are recorded chronologically. It is an act of keeping and recoding all the transactions occurring in the business.

The journal entry on P’s book in acquisition.

a.

Expert Solution

Explanation of Solution

Recording the initial investment in S’ books.

Particular	Amount $$$	Amount $$$
Investment in S Dr.	$270,000$
Cash Cr.		$270,000$

b.

To determine

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

b.

Expert Solution

Explanation of Solution

Consolidated worksheet:

Book value
	NC $10%$	+	P	=	Common stock	=	Retained earnings
Original book value	$30,000$		$270,000$		$200,000$		$100,000$

Balance sheet	P’s	S’s	Elimination DR	Elimination CR	consolidated
Cash	$55,000$	$20,000$			$75,000$
Amount received	$50,000$	$30,000$			$80,000$
Inventory	$100,000$	$60,000$			$160,000$
Investment in S	$270,000$			270,000	$0$
Land	225,000	100,000			325,000
Building and equipment	700,000	200,000		10000	890,000
Accumulated depreciation	(400,000)	(10,000)	10000		(400,000)
Total assets	$1,000,000$	$400,000$	$10,000$	$280,000$	$1,130,000$
Account payable	$75,000$	$25,000$			$100,000$
Bonds	$200,000$	$75,000$			$275,000$
Common stock	500000	500000	200000	200000	500000
Retain earning	225000	100000	100000		225000
NCI in NA of S				$30,000$	$30,000$
Total liabilities	$1,000,000$	$400,000$	$300,000$	$30,000$	$1,130,000$

c.

To determine

Concept Introduction:

Consolidated financial statements are financial statement maintained by entity with multiple subsidiary and division.

To Prepare:

The Consolidated balance sheet immediately following the acquisition.

c.

Expert Solution

Explanation of Solution

The Consolidated balance sheet immediately following the acquisition is as follows:

P and S
Consolidated Balance sheet
Particulars	Amount	Amount
Cash		$$75,000$
Accounts Receivable		$$80,000$
Inventory		$$160,000$
Land		$$325,000$
Building and Equipment	$$890,000$
Less: Accumulated Depreciation	$($400,000)$	$$490,000$
Total assets		$$1,130,000$
Accounts Payable		$$100,000$
Bonds Payable		$$275,000$
Common Stock		$$500,000$
Retained earnings		$$225,000$
Non-controlling interest		$$30,000$
Total liabilities and stock holders’ equity		$$1,130,000$

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.26P

a.

To determine

Introduction: Journal entries is a systematic method of recording transactions as and when they occur. It is a summary of transactions divided into the debit and credit items that are recorded chronologically. It is an act of keeping and recoding all the transactions occurring in the business.

The journal entry on P’s book in acquisition.

a.

Expert Solution

Explanation of Solution

Recording the initial investment in S’ books.

Particular	Amount $$$	Amount $$$
Investment in S Dr.	$270,000$
Cash Cr.		$270,000$

b.

To determine

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

b.

Expert Solution

Explanation of Solution

Consolidated worksheet:

Book value
	NC $10%$	+	P	=	Common stock	=	Retained earnings
Original book value	$30,000$		$270,000$		$200,000$		$100,000$

Balance sheet	P’s	S’s	Elimination DR	Elimination CR	consolidated
Cash	$55,000$	$20,000$			$75,000$
Amount received	$50,000$	$30,000$			$80,000$
Inventory	$100,000$	$60,000$			$160,000$
Investment in S	$270,000$			270,000	$0$
Land	225,000	100,000			325,000
Building and equipment	700,000	200,000		10000	890,000
Accumulated depreciation	(400,000)	(10,000)	10000		(400,000)
Total assets	$1,000,000$	$400,000$	$10,000$	$280,000$	$1,130,000$
Account payable	$75,000$	$25,000$			$100,000$
Bonds	$200,000$	$75,000$			$275,000$
Common stock	500000	500000	200000	200000	500000
Retain earning	225000	100000	100000		225000
NCI in NA of S				$30,000$	$30,000$
Total liabilities	$1,000,000$	$400,000$	$300,000$	$30,000$	$1,130,000$

c.

To determine

Concept Introduction:

Consolidated financial statements are financial statement maintained by entity with multiple subsidiary and division.

To Prepare:

The Consolidated balance sheet immediately following the acquisition.

c.

Expert Solution

Explanation of Solution

The Consolidated balance sheet immediately following the acquisition is as follows:

P and S
Consolidated Balance sheet
Particulars	Amount	Amount
Cash		$$75,000$
Accounts Receivable		$$80,000$
Inventory		$$160,000$
Land		$$325,000$
Building and Equipment	$$890,000$
Less: Accumulated Depreciation	$($400,000)$	$$490,000$
Total assets		$$1,130,000$
Accounts Payable		$$100,000$
Bonds Payable		$$275,000$
Common Stock		$$500,000$
Retained earnings		$$225,000$
Non-controlling interest		$$30,000$
Total liabilities and stock holders’ equity		$$1,130,000$

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Answer 5

Chapter 3, Problem 3.26P

a.

To determine

Introduction: Journal entries is a systematic method of recording transactions as and when they occur. It is a summary of transactions divided into the debit and credit items that are recorded chronologically. It is an act of keeping and recoding all the transactions occurring in the business.

The journal entry on P’s book in acquisition.

a.

Expert Solution

Explanation of Solution

Recording the initial investment in S’ books.

Particular	Amount $$$	Amount $$$
Investment in S Dr.	$270,000$
Cash Cr.		$270,000$

b.

To determine

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

b.

Expert Solution

Explanation of Solution

Consolidated worksheet:

Book value
	NC $10%$	+	P	=	Common stock	=	Retained earnings
Original book value	$30,000$		$270,000$		$200,000$		$100,000$

Balance sheet	P’s	S’s	Elimination DR	Elimination CR	consolidated
Cash	$55,000$	$20,000$			$75,000$
Amount received	$50,000$	$30,000$			$80,000$
Inventory	$100,000$	$60,000$			$160,000$
Investment in S	$270,000$			270,000	$0$
Land	225,000	100,000			325,000
Building and equipment	700,000	200,000		10000	890,000
Accumulated depreciation	(400,000)	(10,000)	10000		(400,000)
Total assets	$1,000,000$	$400,000$	$10,000$	$280,000$	$1,130,000$
Account payable	$75,000$	$25,000$			$100,000$
Bonds	$200,000$	$75,000$			$275,000$
Common stock	500000	500000	200000	200000	500000
Retain earning	225000	100000	100000		225000
NCI in NA of S				$30,000$	$30,000$
Total liabilities	$1,000,000$	$400,000$	$300,000$	$30,000$	$1,130,000$

c.

To determine

Concept Introduction:

Consolidated financial statements are financial statement maintained by entity with multiple subsidiary and division.

To Prepare:

The Consolidated balance sheet immediately following the acquisition.

c.

Expert Solution

Explanation of Solution

The Consolidated balance sheet immediately following the acquisition is as follows:

P and S
Consolidated Balance sheet
Particulars	Amount	Amount
Cash		$$75,000$
Accounts Receivable		$$80,000$
Inventory		$$160,000$
Land		$$325,000$
Building and Equipment	$$890,000$
Less: Accumulated Depreciation	$($400,000)$	$$490,000$
Total assets		$$1,130,000$
Accounts Payable		$$100,000$
Bonds Payable		$$275,000$
Common Stock		$$500,000$
Retained earnings		$$225,000$
Non-controlling interest		$$30,000$
Total liabilities and stock holders’ equity		$$1,130,000$

Answer 6

Chapter 3, Problem 3.26P

a.

To determine

Introduction: Journal entries is a systematic method of recording transactions as and when they occur. It is a summary of transactions divided into the debit and credit items that are recorded chronologically. It is an act of keeping and recoding all the transactions occurring in the business.

The journal entry on P’s book in acquisition.

a.

Expert Solution

Explanation of Solution

Recording the initial investment in S’ books.

Particular	Amount $$$	Amount $$$
Investment in S Dr.	$270,000$
Cash Cr.		$270,000$

Answer 7

Chapter 3, Problem 3.26P

a.

To determine

Introduction: Journal entries is a systematic method of recording transactions as and when they occur. It is a summary of transactions divided into the debit and credit items that are recorded chronologically. It is an act of keeping and recoding all the transactions occurring in the business.

The journal entry on P’s book in acquisition.

Answer 8

a.

Expert Solution

Explanation of Solution

Recording the initial investment in S’ books.

Particular	Amount $$$	Amount $$$
Investment in S Dr.	$270,000$
Cash Cr.		$270,000$

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

b.

To determine

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

b.

Expert Solution

Explanation of Solution

Consolidated worksheet:

Book value
	NC $10%$	+	P	=	Common stock	=	Retained earnings
Original book value	$30,000$		$270,000$		$200,000$		$100,000$

Balance sheet	P’s	S’s	Elimination DR	Elimination CR	consolidated
Cash	$55,000$	$20,000$			$75,000$
Amount received	$50,000$	$30,000$			$80,000$
Inventory	$100,000$	$60,000$			$160,000$
Investment in S	$270,000$			270,000	$0$
Land	225,000	100,000			325,000
Building and equipment	700,000	200,000		10000	890,000
Accumulated depreciation	(400,000)	(10,000)	10000		(400,000)
Total assets	$1,000,000$	$400,000$	$10,000$	$280,000$	$1,130,000$
Account payable	$75,000$	$25,000$			$100,000$
Bonds	$200,000$	$75,000$			$275,000$
Common stock	500000	500000	200000	200000	500000
Retain earning	225000	100000	100000		225000
NCI in NA of S				$30,000$	$30,000$
Total liabilities	$1,000,000$	$400,000$	$300,000$	$30,000$	$1,130,000$

Answer 13

b.

To determine

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

Answer 14

b.

Expert Solution

Explanation of Solution

Consolidated worksheet:

Book value
	NC $10%$	+	P	=	Common stock	=	Retained earnings
Original book value	$30,000$		$270,000$		$200,000$		$100,000$

Balance sheet	P’s	S’s	Elimination DR	Elimination CR	consolidated
Cash	$55,000$	$20,000$			$75,000$
Amount received	$50,000$	$30,000$			$80,000$
Inventory	$100,000$	$60,000$			$160,000$
Investment in S	$270,000$			270,000	$0$
Land	225,000	100,000			325,000
Building and equipment	700,000	200,000		10000	890,000
Accumulated depreciation	(400,000)	(10,000)	10000		(400,000)
Total assets	$1,000,000$	$400,000$	$10,000$	$280,000$	$1,130,000$
Account payable	$75,000$	$25,000$			$100,000$
Bonds	$200,000$	$75,000$			$275,000$
Common stock	500000	500000	200000	200000	500000
Retain earning	225000	100000	100000		225000
NCI in NA of S				$30,000$	$30,000$
Total liabilities	$1,000,000$	$400,000$	$300,000$	$30,000$	$1,130,000$

Answer 15

b.

Expert Solution

Answer 16

b.

Expert Solution

Answer 17

Expert Solution

Answer 18

c.

To determine

Concept Introduction:

Consolidated financial statements are financial statement maintained by entity with multiple subsidiary and division.

To Prepare:

The Consolidated balance sheet immediately following the acquisition.

c.

Expert Solution

Explanation of Solution

The Consolidated balance sheet immediately following the acquisition is as follows:

P and S
Consolidated Balance sheet
Particulars	Amount	Amount
Cash		$$75,000$
Accounts Receivable		$$80,000$
Inventory		$$160,000$
Land		$$325,000$
Building and Equipment	$$890,000$
Less: Accumulated Depreciation	$($400,000)$	$$490,000$
Total assets		$$1,130,000$
Accounts Payable		$$100,000$
Bonds Payable		$$275,000$
Common Stock		$$500,000$
Retained earnings		$$225,000$
Non-controlling interest		$$30,000$
Total liabilities and stock holders’ equity		$$1,130,000$

Answer 19

c.

To determine

Concept Introduction:

Consolidated financial statements are financial statement maintained by entity with multiple subsidiary and division.

To Prepare:

The Consolidated balance sheet immediately following the acquisition.

Answer 20

c.

Expert Solution

Explanation of Solution

The Consolidated balance sheet immediately following the acquisition is as follows:

P and S
Consolidated Balance sheet
Particulars	Amount	Amount
Cash		$$75,000$
Accounts Receivable		$$80,000$
Inventory		$$160,000$
Land		$$325,000$
Building and Equipment	$$890,000$
Less: Accumulated Depreciation	$($400,000)$	$$490,000$
Total assets		$$1,130,000$
Accounts Payable		$$100,000$
Bonds Payable		$$275,000$
Common Stock		$$500,000$
Retained earnings		$$225,000$
Non-controlling interest		$$30,000$
Total liabilities and stock holders’ equity		$$1,130,000$

Answer 21

c.

Expert Solution

Answer 22

c.

Expert Solution

Answer 23

Expert Solution

Answer 24

Ch. 3 - What is the basic idea underlying the preparation...Ch. 3 - How might consolidated statements help an investor...Ch. 3 - Prob. 3.3Q Ch. 3 - Prob. 3.4Q Ch. 3 - Prob. 3.5Q Ch. 3 - Prob. 3.6Q Ch. 3 - Prob. 3.7Q Ch. 3 - Prob. 3.8Q Ch. 3 - Prob. 3.9Q Ch. 3 - Prob. 3.10Q

Concept explainers

Explanation of Solution

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

Explanation of Solution

Concept Introduction:

Consolidated financial statements are financial statement maintained by entity with multiple subsidiary and division.

To Prepare:

The Consolidated balance sheet immediately following the acquisition.

Explanation of Solution

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Chapter 3 Solutions

Concept explainers

Explanation of Solution

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company. The consolidate worksheet of the final values by the P’s book.

Explanation of Solution

Concept Introduction: Consolidated financial statements are financial statement maintained by entity with multiple subsidiary and division. To Prepare: The Consolidated balance sheet immediately following the acquisition.

Explanation of Solution

Want to see more full solutions like this?

Chapter 3 Solutions

Introduction: Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

The consolidate worksheet of the final values by the P’s book.

Concept Introduction:

Consolidated financial statements are financial statement maintained by entity with multiple subsidiary and division.

To Prepare:

The Consolidated balance sheet immediately following the acquisition.