Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260110579
Author: Hoyle
Publisher: McGraw Hill Education
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Chapter 5, Problem 33P
To determine
Prepare the 2018 consolidation worksheet entries for Company M and Company Y. In addition, compute the net income attributable to the non-controlling interest for 2018.
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On January 1, 2017, Sparky Co. acquired 80% of the outstanding stock of Panda Co. for P225,000 cash. Relevant information for Panda Co. on this date is as follows:
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Inventory
            120,000
Land
            240,000
Goodwill
             10,000
Liabilities
             30,000
Common Stock, P100 par
            240,000
Retained earnings
            100,000
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At acquisition date, the book values of Panda Co.’s net identifiable assets and liabilities approximated their fair values.
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How much is the gain on acquisition?
On January 1, 2015, Pomegranate Company acquired 80% of the voting stock of Starfruit Company for $47,100,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was $6,900,000. Starfruit's book value was $12,000,000 at the date of acquisition. Starfruit's
assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10-year life, straight-line) was overvalued by $13,000,000. Starfruit Company had previously unreported intangible assets, with a market value of $16,000,000 and 5-year life, straight-
line, which were capitalized following GAAP.
Additional information:
Pomegranate uses the complete equity method to account for its investment in Starfruit on its own books. Goodwill recognized in this acquisition was impaired by a total of $1,000,000 in 2015 and 2016, and by $250,000 in 2017. It is now December 31, 2017, the accounting year-end.Here is Starfruit
Company's trial balance at…
On January 1, 2016, Aronsen Company acquired 90 percent of Siedel Company’s outstanding shares. Siedel had a net book value on that date of $480,000: common stock ($10 par value) of $200,000 and retained earnings of $280,000.Aronsen paid $584,100 for this investment. The acquisition-date fair value of the 10 percent noncontrolling interest was $64,900. The excess fair value over book value associated with the acquisition was used to increase land by $89,000 and to recognize copyrights (16-year remaining life) at $80,000. Subsequent to the acquisition, Aronsen applied the initial value method to its investment account.In the 2016–2017 period, the subsidiary’s retained earnings increased by $100,000. During 2018, Siedel earned income of $80,000 while declaring $20,000 in dividends. Also, at the beginning of 2018, Siedel issued 4,000 new shares of common stock for $38 per share to finance the expansion of its corporate facilities. Aronsen purchased none of these additional shares and…
Chapter 5 Solutions
Soft Bound Version for Advanced Accounting 13th Edition
Ch. 5 - Prob. 1QCh. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - James, Inc., sells inventory to Matthews Company,...Ch. 5 - Prob. 6QCh. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - Prob. 10Q
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - Use the same information as in problem (5) except...Ch. 5 - Angela, Inc., holds a 90 percent interest in Corby...Ch. 5 - Prob. 8PCh. 5 - Thomson Corporation owns 70 percent of the...Ch. 5 - Prob. 10PCh. 5 - What is the total of consolidated cost of goods...Ch. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - What is the consolidated total for inventory at...Ch. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 5 - Akron, Inc., owns all outstanding stock of Toledo...Ch. 5 - Prob. 22PCh. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 - Prob. 25PCh. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Following are financial statements for Moore...Ch. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Prob. 33PCh. 5 - Prob. 34PCh. 5 - Prob. 35PCh. 5 - Prob. 36PCh. 5 - Prob. 1DYSCh. 5 - Hamilton Hawks Players Association and Mr....
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- On January 1, 2015, Pomegranate Company acquired 80% of the voting stock of Starfruit Company for $70,000,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was $9,400,000. Starfruit's book value was $11,600,000 at the date of acquisition. Starfruit's assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10-year life, straight-line) was overvalued by $13,000,000. Starfruit Company had previously unreported intangible assets, with a market value of $16,000,000 and 5-year life, straight-line, which were capitalized following GAAP. Additional information: Pomegranate uses the complete equity method to account for its investment in Starfruit on its own books. Goodwill recognized in this acquisition was impaired by a total of $3,000,000 in 2015 and 2016, and by $1,000,000 in 2017. It is now December 31, 2017, the accounting year-end. Here is Starfruit Company's trial balance at…arrow_forwardOn January 1, 2015, Pomegranate Company acquired 80% of the voting stock of Starfruit Company for $47,100,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was 16,900,000. Starfruit's book value was $12,000,000 at the date of acquisition. Starfruit's assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10-year life, straight-line) was overvalued by $13,000,000, Starfruit Company had previously unreported intangible assets, with a market value of $16,000,000 and 5-year life, straight-line. which were capitalized following GAAP If Pomegranate follows IFRS and uses the alternative method of valuing the noncontrolling interest, at the date of acquisition the noncontrolling interest in Starfruit appears in the equity section of the consolidated balance sheet in the amount of O$7,800,000 O$6,300,000 O$3,000,000 O$1,300,000arrow_forwardOn January 1, 2018, Johnsonville Enterprises, Inc., acquired 80 percent of Stayer Company’s outstanding common shares in exchange for $3,000,000 cash. The price paid for the 80 percent ownership interest was proportionately representative of the fair value of all of Stayer’s shares.At acquisition date, Stayer’s books showed assets of $4,200,000 and liabilities of $1,600,000. The recorded assets and liabilities had fair values equal to their individual book values except that a building (10-year remaining life) with book value of $195,000 had an appraised fair value of $345,000. Stayer’s books showed a $175,500 carrying amount for this building at the end of 2018.Also, at acquisition date Stayer possessed unrecorded technology processes (zero book value) with an estimated fair value of $1,000,000 and a 20-year remaining life. For 2018 Johnsonville reported net income of $650,000 (before recognition of Stayer’s income), and Stayer separately reported earnings of $350,000. During 2018,…arrow_forward
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