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 5.8.1P
1.
To determine
Introduction: Consolidation is a process in which financial statements of a subsidiary is merged with financial statements of the parent. In this process, the effect of intercompany transactions is eliminated.
To show: The dollar effect of the transactions between Company P and Company S.
2.
To determine
Introduction: Consolidation is a process in which financial statements of a subsidiary is merged with financial statements of the parent. In this process, the effect of intercompany transactions is eliminated.
To show: The dollar effect of the transactions between Company P and Company S.
3.
To determine
The dollar effect of the transactions between Company P and Company S.
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Students have asked these similar questions
On January 1, 2024, Presidio Company acquired 100 percent of the outstanding common stock of Mason Company. To
acquire these shares, Presidio Issued to the owners of Mason $329,000 in long-term liabilities and 20,000 shares of
common stock having a par value of $1 per share but a fair value of $10 per share. Presidio paid $32,500 to
accountants, lawyers, and brokers for assistance in the acquisition and another $17,000 in connection with stock
Issuance costs.
Prior to these transactions, the balance sheets for the two companies were as follows:
Cash
Presidio
Company
Mason
Company
$ 36,200
Items
$ 81,900
Receivables
290,000
151,000
Inventory
378,000
178,000
Land
284,000
272,000
Buildings (net)
469,000
280,000
Equipment (net)
194,000
71,100
Accounts payable
(179,000)
(47,700)
Long-term
liabilities
Common stock-$1 par
value
Common stock-$20 par
value
Additional paid-in
capital
Retained earnings,
1/1/24
(462,000) (329,000)
(110,000)
в
0 (120,000)
(360,000)
(585,900) (491,600)
Note:…
a) Prepare the worksheet for preparing a consolidated statement of financial position on the date of acquisition. You may add accounts to the worksheet that may be necessary.b) Prepare a consolidated statement of financial position for Parker Company and subsidiary on January 2, 2020.
Week 1You are the audit manager of Overseas Explorer Ltd (OEL), which acquired the small proprietarycompany Local Pty Ltd (Local) on 30 June 2018. The price of the acquisition was agreed at $5 million,on the condition that OEL is satisfied with the financial records of Local. As Local is a small proprietarycompany, it has not prepared statutory financial reports or undergone an audit since its incorporationin 2016. However, Local has agreed to allow your firm, which is the auditor of OEL, to access its booksand records. The CEO of OEL, Wendy Champion, has requested that your firm provide assurance onthe following three items: The management accounts for the year ended 30 June 2017 All transactions occurring from the date negotiations commenced until the settlement date, toensure that all transactions were within the normal course of operations The financial report prepared at the acquisition date of 30 June 2018In order to clarify your responsibilities, you requested that OEL…
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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