Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Question
Chapter 3, Problem 3.8.2P
To determine
Introduction:
Consolidation of statements:
The result of parent as well as all of its subsidiaries financial position is reflected in consolidated statements. It is beneficial for creditors and owners of the parent company to know the outcome of the operations of parent and its subsidiaries.
To calculate: Consolidated worksheet for Detner International and its subsidiary Hardy Company as of Dec 31 2017.
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Detner International purchases 80% of the outstanding stock of Hardy Company for $1,600,000 on January 1, 2015. At the purchase date, the inventory, equipment, and patents of Hardy Company have fair values of $10,000, $50,000, and $100,000, respectively, in excess of their book values. The other assets and liabilities of Hardy Company have book values equal to their fair values. The inventory is sold during the month following the purchase. The two companies agree that the equipment has a remaining life of eight years and the patents 10 years. Onthe purchase date, the owners’ equity of Hardy Company is as follows:Common stock ($10 stated value) . . . . . . . . . . . . . . . . $1,000,000Additional paid-in capital in excess of par . . . . . . . . . 300,000Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,700,000During 2015 and 2016, Hardy Company has income and pays dividends as…
Razor Afternoon Co. owns 80% interest in Slice Morning Co. During 2019, Razor sold inventories costing ₱200,000 to Slice for ₱300,000. One-fourth of the inventories were unsold as of December 31, 2019 and were included in Slice’s year-end statement of financial position at the purchase price from Razor. The individual financial statements of Razor and Slice on December 31, 2019 show the following information:
Razor
Slice
Inventory
1,260,000
380,000
Sales
6,700,000
2,700,000
Cost of sales
(3,015,000)
(1,755,000)
Gross profit
3,685,000
945,000
There are no fair value adjustments arising from the business combination date.
Write the Eliminating Entries for Periodic Inventory System.
Kraus Company has the following balance sheet on July 1, 2016: (attached)On July 1, 2016, Neiman Company purchases 80% of the outstanding common stock of Kraus Company for $310,000. Any excess of book value over cost is attributed to the equipment, which has an estimated 5-year life. Kraus Company closes its books before the acquisition on July 1. On December 31, 2016, Neiman Company and Kraus Company prepare the following trial balances: Neiman Kraus (July 1–Dec. 31)Current Assets . . . . . . . . . . . . . . . . . . . . 220,000 220,000Equipment . . . . . . . . . . . . . . . . . . . . . . . 500,000 300,000Accumulated Depreciation—Equipment (140,000) (20,000)Investment in Kraus Company . . . . . . . . . 310,000Current Liabilities . . . . . . . . . . . . . . . . . . . . . (200,000) (70,000)Common Stock ($10 par) . . . . . . . . . . . . .…
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...
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