Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
thumb_up100%
Chapter 3, Problem 3.4.2P
To determine
Consolidated Income Statement Consolidated balance sheet represents aggregated financial position of holding and subsidiary company. In this statement company position is presented, about its assets and liabilities.
Retained Earning
Retained earning are profit of a company has earned up to the date. Year end retained earning is calculated by adding opening balance of
Consolidated Balance Sheet Consolidated balance sheet represents aggregated financial position of holding and subsidiary company. In this statement company position is presented, about its assets and liabilities.
To calculate:
Prepare consolidated income statement, retained earning and balance sheet.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
On December 31, 2017, X Company paid $3,600,000 for 100% of the stock of Y Company when Y's underlying net assets had a
fair value of $2,800,000. Almost immediately after the acquisition, X paid $240,000 for an advertising campaign that was
designed to maintain goodwill. How much will be reported as goodwill on X Company's December 31, 2018 balance sheet?
On July 1, 2017, Entity H acquired 25% of the shares of Oki, Inc. for P1,000,000. At the date, the equity of Oki was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Oki during 2017 to 2021:
YEAR PROFIT(LOSS)
2017 P200,000
2018 (2,000,000)
2019 (2,500,000)
2020 160,000
2021 300,000
How much share of profit of assocaiate should Entity H report in its 2020 profit or loss?
a.Nil
b. P40,000
c. P60,000
d. P100,000
The following intragroup transactions took place during the period ended 30 June 2022:
Heart Ltd paid $25 000 during the period ended 30 June 2022 as management fees for services provided by Clear Ltd.
During the period ended 30 June 2022, Heart Ltd declared a final dividend of $12 000 out of post-acquisition profits.
Heart Ltd rented a spare warehouse to Clear Ltd starting from 31 December 2021 for 1 year. The total charge for the rental was $40 000, and Clear Ltd will pay this amount to Heart Ltd at 31 December 2022.
Required
In relation to the above intragroup transactions:
1. Prepare adjusting journal entries for the consolidation worksheet at 30 June 2022.
2. Explain in detail why you made each adjusting journal entry, whether there is a tax effect and if the NCI share of equity required adjustment.
Chapter 3 Solutions
Advanced Accounting
Ch. 3 - Prob. 1UTICh. 3 - Prob. 2UTICh. 3 - Prob. 3UTICh. 3 - Prob. 4UTICh. 3 - Prob. 5UTICh. 3 - Prob. 6UTICh. 3 - Prob. 7UTICh. 3 - Prob. 1ECh. 3 - Prob. 2ECh. 3 - Prob. 3.1E
Ch. 3 - Prob. 3.2ECh. 3 - Prob. 3.3ECh. 3 - Prob. 3.4ECh. 3 - Prob. 3.5ECh. 3 - Equity method, second year, eliminations, income...Ch. 3 - Prob. 4.2ECh. 3 - Prob. 5.1ECh. 3 - Prob. 5.2ECh. 3 - Prob. 5.3ECh. 3 - Prob. 5.4ECh. 3 - Prob. 5.5ECh. 3 - Prob. 6.1ECh. 3 - Prob. 6.2ECh. 3 - Prob. 7.1ECh. 3 - Prob. 7.2ECh. 3 - Prob. 7.3ECh. 3 - Prob. 7.4ECh. 3 - Prob. 7.5ECh. 3 - Prob. 8.1ECh. 3 - Prob. 8.2ECh. 3 - Prob. 9ECh. 3 - Prob. 10.1ECh. 3 - Prob. 10.2ECh. 3 - Prob. 10.3ECh. 3 - Prob. 11ECh. 3 - Prob. 3B.1.1AECh. 3 - Prob. 3B.1.2AECh. 3 - Prob. 3B.1.3AECh. 3 - Prob. 3B.2.1AECh. 3 - Prob. 3B.2.2AECh. 3 - Prob. 3B.3AECh. 3 - Prob. 3.1.1PCh. 3 - Prob. 3.1.2PCh. 3 - Prob. 3.1.3PCh. 3 - Prob. 3.2.1PCh. 3 - Prob. 3.2.2PCh. 3 - Prob. 3.3.1PCh. 3 - Prob. 3.3.2PCh. 3 - Prob. 3.3.3PCh. 3 - Prob. 3.3.4PCh. 3 - Prob. 3.4.1PCh. 3 - Prob. 3.4.2PCh. 3 - Prob. 3.5.1PCh. 3 - Prob. 3.5.2PCh. 3 - Prob. 3.5.3PCh. 3 - Prob. 3.6.1PCh. 3 - Prob. 3.6.2PCh. 3 - Prob. 3.6.3PCh. 3 - Prob. 3.7.1PCh. 3 - Prob. 3.7.2PCh. 3 - Prob. 3.7.3PCh. 3 - Prob. 3.8.1PCh. 3 - Prob. 3.8.2PCh. 3 - Prob. 3.9.1PCh. 3 - Prob. 3.9.2PCh. 3 - Prob. 3.10.1PCh. 3 - Prob. 3.10.2PCh. 3 - Prob. 3.11.1PCh. 3 - Prob. 3.11.2PCh. 3 - Prob. 3.12.1PCh. 3 - Prob. 3.12.2PCh. 3 - Prob. 3.13.1PCh. 3 - Prob. 3.13.2PCh. 3 - Prob. 3.15.1PCh. 3 - Prob. 3.15.2PCh. 3 - Prob. 3.16.1PCh. 3 - Prob. 3.16.2PCh. 3 - Prob. 3.17.1PCh. 3 - Prob. 3.17.2PCh. 3 - Prob. 3.18.1PCh. 3 - Prob. 3.18.2PCh. 3 - Prob. 3A.1.1APCh. 3 - Prob. 3A.1.2APCh. 3 - Prob. 3A.2APCh. 3 - Prob. 3A.3APCh. 3 - Prob. 3B.1APCh. 3 - Prob. 3B.2APCh. 3 - Prob. 3B.3.1APCh. 3 - The trial balances of Campton Corporation and Dorn...Ch. 3 - The trial balances of Campton Corporation and Dorn...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- On January 1, 2017, Bright Company acquired 80% of Animo Company's common stock for 280,000 cash. At that date, Animo reported common stock outstanding of 200,000 and retained earnings of 100,000 and the fair Animo's assets and liabilities were equal, except for other intangible assets, which has a fair value 50,000 greater than book value and an 8- year remaining life. Animo reported the following data for 2017 and 2018. Year Net Income Comprehensive Income 30,000 45,000 Dividends Paid 2017 2018 25,000 35,000 5,000 10,000 Bright reported separate net income from own operations of 100,000 and paid dividends of 30,000 for both years. Based on the preceding information, what is the amount of comprehensive attributable to the controlling interest in 2018?arrow_forwardOn January 2, 2022, S Company acquired 80% of the stocks of L Company for P2,000,000. On this date, L Company had P1,000.000 of Share Capital and P800,000 of Retained Earnings. The carrying values of the identifiable assets and liabilities of L are equal to their fair values. During the year. L ships merchandise to S costing P800.000 at 25% above cost. At the end of the year, records show the following: S Company L Company Inv. beg 350,000 120,000 Inv. end 400,000 5,500,000 2,500,000 3,250,000 1,680,000 200,000 Sales Purchases Operating Exp. Dividends paid 650,000 300,000 500,000 350,000 The ending inventory of S includes merchandise from L amounting to P50,000. The reported impairment of goodwill in 2022 is P20,000. The parent opted to measure NCI at fair value. In 2021, S Company sold inventory costing P50,000 to $ Company (90%- owned) for P100,000. By the end of the year, L sold 80% of the inventory. The elimination entries in 2022 would include: a. Credit to Cost of Sales, P100,000…arrow_forwardSmith Company is acquired by Roan Corporation on July 1, 2015. Roan exchanges 60,000 shares of its $1 par stock, with a fair valueof $18 per share, for the net assets of Smith Company.Roan incurs the following costs as a result of this transaction:Acquisition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25,000Stock registration and issuance costs. . . . . . . . . . . . . . . 10,000Total costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $35,000The balance sheet of Smyth Company, on the day of the acquisition, is in the attachment: The appraised fair values as of July 1, 2015, is as follows:Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $270,000Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220,000Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,000Buildings . .…arrow_forward
- On January 2, 2022, S Company acquired 80% of the stocks of L Company for P2,000,000. On this date, L Company had P1,000.000 of Share Capital and P800,000 of Retained Earnings. The carrying values of the identifiable assets and liabilities of L are equal to their fair values. During the year. L ships merchandise to S costing P800.000 at 25% above cost. At the end of the year, records show the following: S Company L Company 120,000 Inv. beg 350,000 Inv. end 400,000 200,000 Sales 5,500,000 2,500,000 3,250,000 1,680,000 650,000 Purchases Operating Exp. Dividends paid 300,000 500,000 350,000 The ending inventory of S includes merchandise from L amounting to P50,000. The reported impairment of goodwill in 2022 is P20,000. The parent opted to measure NCI at fair value. How much is the Consolidated Inventory on December 31, 2022? a.590,000 b.560,000 c.587,500 d.600,000arrow_forwardOn 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.arrow_forwardOn July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? Group of answer choices P1,060,000 Cr. P1,035,000 Cr. No entry P40,000 Dr.arrow_forward
- On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? O P1.060.000 Cr. O No entry O P40,000 Dr. O P1.035.000 Cr.arrow_forwardOn July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? P1,035,000 Cr. P1,060,000 Cr. P40,000 Dr. No entry How much will the Investment in Associate account be debited/credited in 2019? P960,000 Cr. No Entry P15,000 Dr. P75,000 Dr.arrow_forwardOn January 1, 2022, P Company acquired 80% of S Company for P2,000,000. The fair value of identifiable net assets is P1,800,000. NCI is measured at fair value. During 2022, P Company ships merchandise to S Company costing P800, 000 at 25% above cost. Additional data are as follows: P Company S Company Sales 5,500,000 2,500,000 Cost of Sales 3,200,000 1,600,000 Operating Expense 650,000 300,000 The ending inventories of S Company includes merchandise from P Company amounting to P50,000. Impairment of goodwill is P20,000. Consolidated cost of sales is reported at The net income attributable to parent isarrow_forward
- On January 1, 2022, P Company acquired 80% of S Company for P2,000,000. The fair value of identifiable net assets is P1,800,000. NCI is measured at fair value. During 2022, P Company ships merchandise to S Company costing P800, 000 at 25% above cost. Additional data are as follows: P Company S Company Sales 5,500,000 2,500,000 Cost of Sales 3,200,000 1,600,000 Operating Expense 650,000 300,000 The ending inventories of S Company includes merchandise from P Company amounting to P50,000. Impairment of goodwill is P20,000. (INPUT YOUR ANSWERS IN FIGURES. DO NOT PUT ANY COMMA, PESO SIGN, DECIMALS, AND EXTRA SPACES) Consolidated cost of sales is reported at The net income attributable to parent isarrow_forwardOn July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At the date, the equity of Marcus was P4,000,000. with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shoes the profits and losses made by Marcus during 2015 to 2019: Year 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the investment in associate account be debited/credited in 2018? A. 1,060,000 Cr B. No entry C. 40,000 Dr D. 1,035,000 Crarrow_forwardDigos Company was organized on January 1, 2020. On the same date, 25,000, P100 par value, ardinary shares were issued in exchange for property, plant and equipment valued at P3,000,000 and cash of P1,000,000. The following data summarizes the activities for 2020: a. Profit for the year ended December 31, 2020 was P1,000,000. b. Raw materials on hand on December 31 were equal to 25% of raw materials purchased. c. Manufacturing costs were distributed as follows: Materials used 50% Direct labor 30% Factory overhead 20% (includes depreciation of building P100,000) d. Goods in process remaining in the factory on December 31 were equal to 1/3 of the goods finished and transferred to stock. e. Finished goods remaining in stock on December 31 were equal to 25% of the cost of goods sold. f. Operating expenses were 30% of sales. g. Cost of goods sold was 150% of the operating expenses. h. Ninety percent of sales were collected during 2020. The balance was considered collectible. i. Seventy five…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education