Fundamentals of Advanced Accounting
6th Edition
ISBN: 9780077862237
Author: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Publisher: McGraw-Hill Education
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Chapter 4, Problem 12P
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Identify the appropriate answer for the given statement from the given choices.
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On April 1, Pujols, Inc., exchanges $430,000 fair-value consideration for 70 percent of the outstanding stock of Ramirez Corporation. The remaining 30 percent of the outstanding shares continued to trade at a collective fair value of $165,000. Ramirez’s identifiable assets and liabilities each had book values that equaled their fair values on April 1 for a net total of $500,000. During the remainder of the year, Ramirez generates revenues of $600,000 and expenses of $360,000 and declared no dividends. On a December 31 consolidated balance sheet, what amount should be reported as noncontrolling interest?a. $219,000b. $237,000c. $234,000d. $250,500
Matthew, Inc., owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee’s operations and decision making. On January 1, 2021, the balance in the Investment in Lindman account is $382,000. Amortization of excess fair value associated with the 30% ownership is $10,500 per year. In 2021, Lindman earns an income of $156,000 and declares cash dividends of $39,000. Previously, in 2020, Lindman had sold inventory costing $54,600 to Matthew for $78,000. Matthew consumed all but 20 percent of this merchandise during 2020 and used the rest during 2021. Lindman sold additional inventory costing $59,400 to Matthew for $90,000 in 2021. Matthew did not consume 40 percent of these 2021 purchases from Lindman until 2022.
What amount of equity method income would Matthew recognize in 2021 from its ownership interest in Lindman?
What is the equity method balance in the Investment in Lindman account at the end of 2021?
On July 1, 2021, Diamante Co. paid P1,000,000 for 100,000 ordinary shares (40%) of Ashes Co. At that date, Ashes' net
assets totaled P 2,500,000 and the fair values of all Ashes identifiable assets and liabilities were equal to their carrying
amount. Ashes reported net income of P500,000 for 2021, of which P300,000 was for the 6 months ended December 31,
2021. Ashes paid cash dividends of P 250,000 on September 30, 2021. What amount of income should Diamante report
from the investment in Ashe Co.?
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P 120,000
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P 100,000
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Chapter 4 Solutions
Fundamentals of Advanced Accounting
Ch. 4 - Prob. 1QCh. 4 - Atwater Company acquires 80 percent of the...Ch. 4 - What is a control premium and how does it affect...Ch. 4 - Prob. 4QCh. 4 - How is the noncontrolling interest in a subsidiary...Ch. 4 - Prob. 6QCh. 4 - Prob. 7QCh. 4 - Prob. 8QCh. 4 - Prob. 9QCh. 4 - Prob. 10Q
Ch. 4 - Prob. 1PCh. 4 - Prob. 2PCh. 4 - Prob. 3PCh. 4 - Prob. 4PCh. 4 - Prob. 5PCh. 4 - Prob. 6PCh. 4 - Prob. 7PCh. 4 - Prob. 8PCh. 4 - Prob. 9PCh. 4 - Prob. 10PCh. 4 - Prob. 11PCh. 4 - Prob. 12PCh. 4 - Prob. 13PCh. 4 - Prob. 14PCh. 4 - Prob. 15PCh. 4 - Prob. 16PCh. 4 - Prob. 17PCh. 4 - Prob. 18PCh. 4 - Current liabilities: a. 50,000 b. 46,000 c. 40,000...Ch. 4 - Prob. 20PCh. 4 - Stockholders equity: a. 80,000 b. 90,000 c. 95,000...Ch. 4 - Prob. 22PCh. 4 - Prob. 23PCh. 4 - Prob. 24PCh. 4 - Prob. 25PCh. 4 - Prob. 26PCh. 4 - Prob. 27PCh. 4 - Prob. 28PCh. 4 - Prob. 29PCh. 4 - Prob. 30PCh. 4 - Prob. 31PCh. 4 - Prob. 32PCh. 4 - Prob. 33PCh. 4 - Prob. 34PCh. 4 - Prob. 35PCh. 4 - Prob. 36PCh. 4 - Prob. 37PCh. 4 - Prob. 38PCh. 4 - Prob. 39PCh. 4 - Prob. 40PCh. 4 - Prob. 41PCh. 4 - Prob. 42PCh. 4 - Prob. 1DYS
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