Advanced Financial Accounting
11th Edition
ISBN: 9780078025877
Author: Theodore E. Christensen, David M Cottrell, Cassy JH Budd Advanced Financial Accounting
Publisher: McGraw-Hill Education
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Chapter 7, Problem 7.37P
a
To determine
Introduction:
Intercompany transfers: When the intercompany transfer of asset occurs, the parent company must make adjustments in preparing consolidated financial statements as long as the asset is held by the acquiring company. When the asset is transferred at book value no special adjustments are needed. But when the asset is transferred at more or less than the book value, the unrealized gain or loss is deferred until the asset is sold to an unrelated party. Moreover in the consolidation, the gain or loss will be eliminated.
The consolidation entries required to prepare a three-part consolidated worksheet at December 31, 20X9
b
To determine
Introduction:
Intercompany transfers: When the intercompany transfer of asset occurs, the parent company must make adjustments in preparing consolidated financial statements as long as the asset is held by the acquiring company. When the asset is transferred at book value no special adjustments are needed. But when the asset is transferred at more or less than the book value, the unrealized gain or loss is deferred until the asset is sold to an unrelated party. Moreover in the consolidation, the gain or loss will be eliminated.
The three part consolidation worksheet for December 31, 20X9.
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Students have asked these similar questions
On January 1, 20X4, Pierce Corporation acquired 90 percent of Sharp Company's voting stock, at
underlying book value. The fair value of the noncontrolling interest was equal to 10 percent of the
book value of Sharp at that date. Pierce uses the equity method in accounting for its ownership of
Sharp. On December 31, 20X4, the trial balances of the two companies are as follows:
Item
Sales
Depreciation Expense
Other Expenses
Income from Subsidiary
Net Income
Current Assets
Investment in Sharp
Depreciable Assets
Accumulated Depreciation
Current Liabilities
Long-Term Debt
Common Stock
Retained Earnings at Jan.1
20x4
Dividends Declared
Pierce Company
Debit
$30,000
100,000
$ 200,000
139,500
300,000
30,000
$799,500
Credit
$300,000
22,500
$192,500
$ 120,000
62,000
75,000
100,000
120,000
$799,500
Sharp Corporation
Debit
$25,000
60,000
$120,000
225,000
10,000
$ 440,000
Credit
$110,000
$25,000
$75,000
25,000
90,000
75,000
65,000
$440,000
Required:
Provide Basic consolidation entry and Accumulated…
Pirate Corporation acquired 60 percent ownership of Ship Company on January 1, 20X8, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 40 percent of the book value of Ship Company. Accumulated depreciation on Buildings and Equipment was $75,000 on the acquisition date. Trial balance data at December 31, 20X8, for Pirate and Ship are as follows:
Item
Pirate Corporation
Ship Company
Debit
Credit
Debit
Credit
Cash
$ 27,000
$8,000
Accounts Receivable
65,000
22,000
Inventory
40,000
30,000
Buildings and Equipment
500,000
235,000
Investment in Row Company
40,000
Investment in Ship Company
108,000
Cost of Goods Sold
150,000
110,000
Depreciation Expense
30,000
10,000
Interest Expense
8,000
3,000
Dividends Declared
24,000
15,000
Accumulated Depreciation
$ 140,000
$ 85,000
Accounts Payable
63,000
20,000
Bonds Payable
100,000
50,000
Common Stock
200,000…
Pirate Corporation acquired 60 percent ownership of Ship Company on January 1, 20X8, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 40 percent of the book value of Ship Company. Accumulated depreciation on Buildings and Equipment was $75,000 on the acquisition date. Trial balance data at December 31, 20X8, for Pirate and Ship are as follows:
Item
Pirate Corporation
Ship Company
Debit
Credit
Debit
Credit
Cash
$ 27,000
$8,000
Accounts Receivable
65,000
22,000
Inventory
40,000
30,000
Buildings and Equipment
500,000
235,000
Investment in Row Company
40,000
Investment in Ship Company
108,000
Cost of Goods Sold
150,000
110,000
Depreciation Expense
30,000
10,000
Interest Expense
8,000
3,000
Dividends Declared
24,000
15,000
Accumulated Depreciation
$ 140,000
$ 85,000
Accounts Payable
63,000
20,000
Bonds Payable
100,000
50,000
Common Stock
200,000…
Chapter 7 Solutions
Advanced Financial Accounting
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - Prob. 7.3QCh. 7 - Prob. 7.4QCh. 7 - Prob. 7.5QCh. 7 - Prob. 7.6QCh. 7 - Prob. 7.7QCh. 7 - Prob. 7.8QCh. 7 - Prob. 7.9QCh. 7 - Prob. 7.10Q
Ch. 7 - Prob. 7.11QCh. 7 - Prob. 7.12QCh. 7 - Prob. 7.13QCh. 7 - Prob. 7.14QCh. 7 - Prob. 7.15QCh. 7 - Prob. 7.16QCh. 7 - Prob. 7.17QCh. 7 - Prob. 7.18AQCh. 7 - Prob. 7.1CCh. 7 - Prob. 7.2CCh. 7 - Prob. 7.3CCh. 7 - Prob. 7.4CCh. 7 - Prob. 7.5CCh. 7 - Prob. 7.1.1ECh. 7 - Prob. 7.1.2ECh. 7 - Prob. 7.1.3ECh. 7 - Prob. 7.1.4ECh. 7 - Prob. 7.1.5ECh. 7 - Prob. 7.2.1ECh. 7 - Prob. 7.2.2ECh. 7 - Prob. 7.2.3ECh. 7 - Prob. 7.2.4ECh. 7 - Prob. 7.2.5ECh. 7 - Prob. 7.2.6ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.5ECh. 7 - Prob. 7.6ECh. 7 - Prob. 7.7ECh. 7 - Prob. 7.8ECh. 7 - Prob. 7.9ECh. 7 - Prob. 7.10ECh. 7 - Prob. 7.11ECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Prob. 7.14ECh. 7 - Prob. 7.15ECh. 7 - Prob. 7.16ECh. 7 - Prob. 7.17ECh. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Prob. 7.20ECh. 7 - Prob. 7.21ECh. 7 - Prob. 7.22ECh. 7 - Prob. 7.23AECh. 7 - Computation of Consolidated Net Income Petime...Ch. 7 - Prob. 7.25PCh. 7 - Prob. 7.26PCh. 7 - Prob. 7.27PCh. 7 - Prob. 7.28.1PCh. 7 - Prob. 7.28.2PCh. 7 - Prob. 7.28.3PCh. 7 - Prob. 7.28.4PCh. 7 - Prob. 7.29PCh. 7 - Prob. 7.30PCh. 7 - Prob. 7.31PCh. 7 - Prob. 7.32PCh. 7 - Prob. 7.33PCh. 7 - Prob. 7.34PCh. 7 - Prob. 7.35PCh. 7 - Prob. 7.36PCh. 7 - Prob. 7.37PCh. 7 - Prob. 7.38PCh. 7 - Prob. 7.39APCh. 7 - Prob. 7.40APCh. 7 - Modified Equity Method Using the data in P7-33, on...Ch. 7 - Prob. 7.42AP
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