Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 7, Problem 3Q
To determine
Determine the income which actually accrues to the consolidated entity from each of these companies after considering the various non-controlling interests.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Best Appliances owns 90% of the voting stock of Wratchet, Inc. Which of the following is true?
a. The financial statements of Best would be consolidated into Wratchet.
b. Wratchet would be considered the parent entity.
c. Best would be considered the parent entity.
d. Both a and c are correct.
Best Appliances owns 90% of the voting stock of Wratchet, Inc. Which of the following is true?
The financial statements of Best would be consolidated into Wratchet.
Wratchet would be considered the parent entity.
Best would be considered the parent entity.
Both a and c are correct.
Smart owns 80% of Simple. Where is the noncontrolling interest in Simple’s positive net income reported on the consolidated income statement (under the acquisition method)?
Chapter 7 Solutions
Advanced Accounting
Ch. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - Prob. 3QCh. 7 - How does the presence of an indirect ownership...Ch. 7 - Prob. 5QCh. 7 - In accounting for mutual ownerships, what is the...Ch. 7 - Prob. 7QCh. 7 - Prob. 8QCh. 7 - Prob. 9QCh. 7 - Prob. 10Q
Ch. 7 - Prob. 11QCh. 7 - Jones acquires Wilson, in part because the new...Ch. 7 - Prob. 13QCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Which of the following is correct for two...Ch. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Prob. 9PCh. 7 - Prob. 10PCh. 7 - Prob. 11PCh. 7 - Prob. 13PCh. 7 - Prob. 14PCh. 7 - Prob. 15PCh. 7 - Prob. 16PCh. 7 - Prob. 17PCh. 7 - Prob. 18PCh. 7 - Prob. 19PCh. 7 - Prob. 20PCh. 7 - Prob. 23PCh. 7 - Prob. 24PCh. 7 - Prob. 26P
Knowledge Booster
Similar questions
- Highpoint owns a 95 percent majority voting interest in Middlebury. In turn, Middlebury owns an 80 percent majority voting interest in Lowton. In the current year, each firm reports the following income and dividends. Separate Company income figures do not include any investment or dividend income.In addition, in computing its income on a full accrual basis, Middlebury's acquisition of Lowton necessitates excess acquisition-date fair value over book value amortizations of $25,000 per year. Similarly, Highpoint's acquisition of Middlebury requires $20,000 of excess fair-value amortizations. Required Prepare an Excel spreadsheet that computes the following: 1. Middlebury's net income including its equity in Lowton earnings. 2. Highpoint's net income including its equity in Middlebury's total earnings. 3. Total entity net income for the three companies. 4. Net income attributable to the noncontrolling interests. 5. Difference between these elements: • Highpoint's net income. • Total…arrow_forwardGardner Corp. owns 80% of the voting common stock of Lockhart Co. Lockhart owns 70% of Canning Co. Gardner and Lockhart both use the initial value method to account for their investments. The following information is available from the financial statements and records of the three companies: Separate company net income before investment income Dividend income from investment in subsidiary Deferral of intra-entity gains Amortization expense related to excess fair value over book value of investment Gardner Lockhart Corp. Co. $900,000 $650,000 $150,000 250,000 120,000 110,000 80,000 What amount should be reported for consolidated net income? 40,000 Canning Co. 20,000 25,000 Separate company net income includes intra-entity gains before the consolidating deferral but does not include dividend income from investment in subsidiary.arrow_forwardPanther Company is about to acquire a 100% interest in Snake Company. Snake has identifiable net assets with book and fair values of $300,000 and $500,000, respectively. As payment, Panther will issue common stock with a fair value of $750,000. How would the transaction be recorded if the acquisition is: a. An acquisition of net assets? b. An acquisition of Snake’s common stock and Snake remains a separate legal entity?arrow_forward
- Choose the correct.Arryn, Inc., owns 95 percent of Stark Corporation’s voting stock. The acquisition price exceeded book and fair value by $85,500 which was appropriately attributed to goodwill. Stark holds 15 percent of Arryn’s voting stock. The price paid for the shares by Stark equaled 15 percent of the parent’s book value and the net fair values of its assets and liabilities.During the current year, Arryn reported separate operating income of $228,000 and dividend income from Stark of $52,500. At the same time, Stark reported separate operating income of $78,000 and dividend income from Arryn of $18,000.What is the net income attributable to the noncontrolling interest under the treasury stock approach?a. $4,800b. $2,700c. $24,600d. $26,700arrow_forwardDuke Corporation owns a 70 percent equity interest in Salem Company, a subsidiary corporation. During the current year, a portion of this stock is sold to an outside party. Before recording this transaction, Duke adjusts the book value of its investment account. What is the purpose of this adjustment? How would Duke account for the remainder of its investment subsequent to the sale of this partial interest?arrow_forwardSeseg Appliances owns 90% of the voting stock of Juan Co. Of the three following statements, which of the statements are true? Statements: (1) The financial statements of Seseg would be consolidated into Juan (2) Seseg would be considered the parent entity (3) Juan would be considered the parent entity A. 1 is true B. 2 is true C. 3 is true D. None of the above are truearrow_forward
- Company P owns 90% of Company S’s shares. Assume Company S then purchases 2% of Company P’s outstanding shares of common stock. When consolidating, what happens to the 2% holding in the consolidated financial statements?arrow_forwardArryn, Inc., owns 95 percent of Stark Corporation’s voting stock. The acquisition price exceeded book and fair value by $85,500 which was appropriately attributed to goodwill. Stark holds 15 percent of Arryn’s voting stock. The price paid for the shares by Stark equaled 15 percent of the parent’s book value and the net fair values of its assets and liabilities. During the current year, Arryn reported separate operating income of $228,000 and dividend income from Stark of $52,500. At the same time, Stark reported separate operating income of $78,000 and dividend income from Arryn of $18,000.What is the net income attributable to the noncontrolling interest under the treasury stock approach?a. $4,800b. $2,700c. $24,600d. $26,700arrow_forwardHow does joint control differ from control as applied on consolidation? Oceania Limited acquired 100% of the share capital of Broadwater Limited. Broadwater had total shareholder's equity of $500 000. The book values of Broadwater Limited's assets were: buildings $300 000, machinery $180 000. The fair values of these assets were: buildings $360 000, machinery $200 000. The tax rate is 30%. The fair value of the identifiable net assets is: a. $580 000 b. $420 000 c. $556 000 d. $444 444arrow_forward
- PT K and PT L own 27 percent and 15 percent of the common shares of PT M, having voting rights at the shareholders general meeting. PT L also owns 80 percent of the common shares of PT K, having voting rights at the shareholders general meeting. It is determined that PT K is a subsidiary of PT L. Following an analysis, PT K and PT L do not control or jointly control PT M. Required: Determine whether PT K and PT L have significant influence over PT M. Please explain.arrow_forwardPepper owns 70% of Spray. Where is the noncontrolling interest in Spray's positive net income reported on the consolidated income statement (under the acquisition method)? As an addition to consolidated net income As a deduction from consolidated net income As an addition to Spray's dividends As a deduction from Spray's dividendsarrow_forwardAubergine Ltd. currently owns 12% of the outstanding common shares of Benz Ltd. Borchoi Ltd. and Brink Ltd. respectively own 52% and 23% of the outstanding common shares of Benz Ltd with remaining shares held by miscellaneous smaller shareholders. Benz Ltd. has had several years of large losses. What is the minimum percentage of additional common shares of Benz Ltd. that Aubergine Ltd. must purchase in order that there be an acquisition of control? (Enter in whole numbers; do not type the % sign).arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
