Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Chapter 5, Problem 3UTI
Plessor Industries acquired 80% of the outstanding common stock of Slammer Company on January 1, 2015. for S320,000. On that date, Slammer’s book values approximated fair values. and the balance of its
On January 1, 2016. Slammer signed a 5-year lease with Plessor for the rental of a small factory building with a 10-year life. Payments of $25000 are due at the beginning of each year on January 1, and Slammer is expected to exercise the $5,000 bargain purchase option at the end of the fifth year. The fair value of the factory was $103,770 at the start of the lease term. Plessor’s implicit rate on the lease is 12%. A second lease agreement. for the rental of production equipment with an 8-year life, was signed by Slammer on January 1, 2017. The terms of this 4-year lease require a payment of $15,000 at the beginning of each year on January 1. The present value of the lease payments at Plessor’s 12% implicit rate was equal to the fair value of the equipment, $52,298, when the lease was signed. The cost of the equipment to Plessor was $45,000, and there is a $2,000 bargain purchase option. Eight-year, straight-line depreciation is being used, with no salvage value.
The following
Required
Prepare the worksheet necessary to produce the consolidated financial statements of Plessor Industries and its subsidiary for the year ended December 31. 2017. Include the determination and distribution of excess and income distribution schedules.
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Year
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2015
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2016
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2017
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2018
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How much will the Investment in Associate account be debited/credited in 2018?
Group of answer choices
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Chapter 5 Solutions
Advanced Accounting
Ch. 5 - Prob. 1UTICh. 5 - Subsidiary Company S has $1000,000 of bonds...Ch. 5 - Plessor Industries acquired 80% of the outstanding...Ch. 5 - Company P purchased $100,000 of subsidiary Company...Ch. 5 - Prob. 5UTICh. 5 - Prob. 6UTICh. 5 - Prob. 7UTICh. 5 - Prob. 1ECh. 5 - Prob. 2ECh. 5 - Prob. 3.1E
Ch. 5 - Prob. 3.2ECh. 5 - Prob. 4ECh. 5 - Carlton Company is an 80%- owned subsidiary of...Ch. 5 - Carlton Company is an 80%- owned subsidiary of...Ch. 5 - Prob. 6.1ECh. 5 - Prob. 6.2ECh. 5 - Prob. 7.1ECh. 5 - Prob. 7.2ECh. 5 - Prob. 7.3ECh. 5 - Prob. 8.1ECh. 5 - Prob. 8.3ECh. 5 - Prob. 9ECh. 5 - Prob. 5.1.1PCh. 5 - Prob. 5.1.2PCh. 5 - Prob. 5.2PCh. 5 - Prob. 5.3PCh. 5 - Prob. 5.4PCh. 5 - Prob. 5.5PCh. 5 - Prob. 5.6PCh. 5 - Prob. 5.7PCh. 5 - Prob. 5.8.1PCh. 5 - Prob. 5.8.2PCh. 5 - Prob. 5.9PCh. 5 - Prob. 5.10PCh. 5 - Prob. 5.14PCh. 5 - Prob. 5.2.1CCh. 5 - Prob. 5.2.2CCh. 5 - Prob. 5.3.1CCh. 5 - Prob. 5.3.2CCh. 5 - Prob. 5.3.3CCh. 5 - Prob. 5.3.4C
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