Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Chapter SA1, Problem 1.1E
To determine
Business combination:
Business combination refers tothe combining of one or more business organizations in a single entity. The business combination leads to the formation of combined financial statements. After business combination, the entities having separate control merges into one having control over all the assets and liabilities. Merging and acquisition are types of business combinations.
Consolidated financial statements:
The consolidated financial statements refer to the combined financial statements of the entities which are prepared at the year-end. The consolidated financial statements are prepared when one organization is either acquired by the other entity or two organizations merged to form the new entity. The consolidated financial statements serve the purpose of both the entities about financial information.
:
Prepare the adjustment in books of Company T on December 31, 2017 and December 31, 2018 to account for its investment in Company L.
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What is the retained earnings balance on January 1,2019 before restatement?
AL Company provided the following information for the year ended December 31, 2019
PROFIT
2,000,000
TOTAL ASSESTS
14,950,000
SHARE CAPITAL
5,600,000
SHARE PREMIUM
2,400,000
DIVIDENDS EARNED
1,200,000
PRIOR PERIOD ADJUSTMENT FOR 2018 OVER DEPRECIATION
500,000
The debt to equity ration is 30% at December 31,2019
The following trial balance relates to Selt.plc for the year ended 31 December 2021:
Equity shares of £1 each
Share Premium
Retained earnings at 1 January 2021
Property at cost
Depreciation on property at 1 January 2021
Plant and equipment at cost
Depreciation on plant and equipment at 1 January 2021
Inventory at 1 January 2021
Trade receivables
Cash and cash equivalents
Trade payables
5% Loan repayable 2026
Revenue
Purchases
Distribution costs
Administrative expenses
Research and development expenditure
Loan Interest paid
Dividend paid
Further notes:
£'000
34,800
22,800
Required:
A Statement of Profit or Loss for the year ended 31 December 2021.
A Statement of Financial Position as at 31 December 2021
4,900
4,000
6,840
155,000
22,050
12,750
19,600
300
4,000
287,040
£'000
56,000
2,000
7,780
3,200
4,500
1,560
12,000
200,000
287,040
2)
1) Inventory was valued at £3,800,000 on 31 December 2021. (This valuation is before note (4) below is considered).
Property includes land valued at…
What amount of income from the investment should be
Problem 17-11 (AICPA Adapted)
On July 1, 2021, Focus Company purchased 30,000 shares of
Eagle Company's 100,000 outstanding ordinary shares for
P200 per share.
On December 15, 2021, Eagle Company paid P1,000,000
dividends. Eagle Company's net income for 2021 wee
P5,000,000 earned evenly throughout the year.
reported for the current year?
a. 500,000
b. 300,000
c. 750,000
d. 150,000
518
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