Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Chapter 7, Problem 7.4P
Problem 7-4 (LO 3) Sale of partial, then balance of interest. On January 1, 2013, Carlos Corporation purchases 90% (18,000 shares) of the outstanding common stock of Dower Company for $504,000, Just prior to Carlos Corporation's purchase, Dower Company has the following
At this time, Dower Company's book values approximate fair values except for buildings with a 20-year life.
On January 1, 2017, Dower Company's
On July 1, 2017, Carlos Corporation sells 2,000 of its Dower Company shares to Tanner Corporation for $100,000. At the rime of this sale, Carlos has no intention of selling the balance of irs holding in Dower Company.
In an unexpected move on December 31, 2017, Carlos Corporation sells its remaining 80% interest in Dower Company to Tanner Corporation for $540,000.
Dower Company's reported income and dividends for 2017 are as follows:
Required
Prepare the determination and distribution of excess schedule for Carlos Corporation's purchase of Dower Company common stock on January 1, 2013- Then, prepare all the entries on Carlos's books needed to reflect the changes in its investment account from January 1, 2017, to December 31, 2017. (Assume Carlos uses the cost method to report its investment in Dower Company.)
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Problem 4-35 (Algo) (LO 4-2, 4-3, 4-5)
Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid $744,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $186,000 both before and after Miller’s acquisition.
On January 1, 2019, Taylor reported a book value of $464,000 (Common Stock = $232,000; Additional Paid-In Capital = $69,600; Retained Earnings = $162,400). Several of Taylor’s buildings that had a remaining life of 20 years were undervalued by a total of $61,900.
During the next three years, Taylor reports income and declares dividends as follows:
Year
Net Income
Dividends
2019
$
54,400
$
7,800
2020
70,200
11,700
2021
78,000
15,600
Determine the appropriate answers for each of the following questions:
What amount of excess depreciation expense should be recognized in the consolidated financial…
On January 02, 2022. Milk Tea Company purchased 8% P1,000,000 face value bonds of Matcha Corporation of P922.768 and designated as at fair value through profit or loss (FVTPL) Transaction costs incurred by Milk Tea Company relative to the acquisition is P30,000. These bonds mature on December 31, 2026. The bonds were purchased to yield 10%. Interest is payable semi annually every June 30 and December 31. On December 31, 2022, the bonds are quoted 99 while on December 31, 2023, the bonds are quoted @ 102. On April 30, 2024, Milk Tea Company sold P600,000 face value bonds @ 101 plus accrued interest
Which of the following is part of the entries of Milk Tea Company to be recognized in 2022?
A.) Credit Unrealized Gain on DI at FVTPL - 37,232
B.) Credit Cash - 952,768
C.) Debit Debt Investment at FVTPL - 952,768
D.) Credit Interest Revenue - 73,821.44
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Chapter 7 Solutions
Advanced Accounting
Ch. 7 - Prob. 1UTICh. 7 - Prob. 2UTICh. 7 - Prob. 3UTICh. 7 - Prob. 4UTICh. 7 - Exercise 1 (LO 1) Purchase of shares directly from...Ch. 7 - Prob. 2ECh. 7 - Prob. 3ECh. 7 - Prob. 4ECh. 7 - Prob. 5ECh. 7 - Prob. 6E
Ch. 7 - Prob. 7.1ECh. 7 - Exercise 7 (LO 4) Equity adjustments with...Ch. 7 - Prob. 8.1ECh. 7 - Prob. 8.2ECh. 7 - Prob. 8.3ECh. 7 - Prob. 7.1.1PCh. 7 - Prob. 7.1.2PCh. 7 - Prob. 7.2.1PCh. 7 - Prob. 7.2.2PCh. 7 - Prob. 7.2.3PCh. 7 - Prob. 7.2.4PCh. 7 - Problem 7-4 (LO 3) Sale of partial, then balance...Ch. 7 - Prob. 7.5PCh. 7 - Prob. 7.7.1PCh. 7 - Prob. 7.8.2PCh. 7 - Prob. 7A.1APCh. 7 - Prob. 7A.2.1APCh. 7 - Prob. 7A.2.2AP
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