QUESTIONOn December 31, 2020, P Company purchased a controlling interest in S. Company for $1.060,000. The consolidatedbalance sheet on December 31, 2020 reported noncontrolling interest in S Company of $265,000.On the date of acquisition, the stockholders' equity section of S Company's balance sheet was as follows:Common stockOther contributed capitalRetained earningsTotalNoncontrolling Interest Percentage is:$520,000$380,000Required:1. Compute the noncontrolling interest percentage on December 31, 2020.Otsek S$280,000$1,180,0002. Prepare the investment elimination entry made to prepare a consolidated balance sheet workpaper. Any differencebetween book value and the value implied by the purchase price relates to subsidiary PP&E.DebitCredit7 points

Investment in Splish company by price = $1,060,000Investment in Splish company - NCI =…

1. Compute the noncontrolling interest percentage on December 31, 2020. Noncontrolling Interest Percentage is: 2. Prepare the investment elimination entry made to prepare a consolidated balance sheet workpaper. Any difference between book value and the value implied by the purchase price relates to subsidiary PP&E. Credit

1. Compute the noncontrolling interest percentage on December 31, 2020. Noncontrolling Interest Percentage is: 2. Prepare the investment elimination entry made to prepare a consolidated balance sheet workpaper. Any difference between book value and the value implied by the purchase price relates to subsidiary PP&E. Credit

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 20E: The investments of Steelers Inc. include a single investment: 33,100 shares of Bengals Inc. common...

See similar textbooks

Similar questions

During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 loss
Income Statement, Lower Portion Cunningham Company reports a retained earnings balance of 365,200 at the beginning of 2019. For the year ended December 31, 2019, the company reports pretax income from continuing operations of 150,500. The following information is also available pertaining to 2019: 1. The company declared and paid a 0.72 cash dividend per share on the 30,000 shares of common stock that were outstanding the entire year. 2. The company incurred a pretax 21,000 loss as a result of an earthquake, which is not unusual for the area. This is included in the 150,500 income from continuing operations. 3. The company sold Division P (a component of the company) in May. From January through May, Division P had incurred a pretax loss from operations of 33,000. A pretax gain of 15,000 was recognized on the sale of Division P. Required: Assuming that all the pretax items are subject to a 30% income tax rate: 1. Complete the lower portion of Cunningham's 2019 income statement beginning with Pretax Income from Continuing Operations. Include any related note to the financial statements. 2. Prepare an accompanying retained earnings statement.
The investments of Steelers Inc. include a single investment: 33,100 shares of Bengals Inc. common stock purchased on September 12, 2016, for 13 per share including brokerage commission. These shares were classified as available-for-sale securities. As of the December 31, 2016, balance sheet date, the share price declined to 11 per share. a. Journalize the entries to acquire the investment on September 12 and record the adjustment to fair value on December 31, 2016. b. How is the unrealized gain or loss for available-for-sale investments disclosed on the financial statements?
On December 31, 2020, Splish Company purchased a controlling interest in Novak Company for $1,320,000. The consolidated balance sheet on December 31, 2020 reported noncontrolling interest in Novak Company of $330,000. On the date of acquisition, the stockholders' equity section of Novak Company's balance sheet was as follows: Common stock Other contributed capital Retained earnings Total (a) (b) $585,000 435,000 Common Stock - Splish 410,000 Prepare the investment elimination entry made to prepare a consolidated balance sheet workpaper. Any difference between book value and the value implied by the purchase price relates to subsidiary land. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) $1,430,000 Account Titles and Explanation Investment in Splish Company Retained Earnings - Splish Other…
On January, 2020, P Company acquired 90% of S Company in exchange for 5,400 shares of P10 par common stock having a market value of P120,600. P and S condensed balance sheet where as follows: Requirements: Compute the following:1. Partial goodwill on Jan. 1, 20202. Non-controlling interest (in net assets) on Jan. 1, 20203. Consolidated Retained Earnings, Jan. 1, 20204. Equity Holders of Parent - Retained Earnings, Jan. 1, 20205. In addition to the information, assuming that on Dec. 31, 2020, the following results were given: Dividends Paid Net IncomeP Company P 15,000 P 30,200S Company 4,000 9,400 Using cost method to record results of operations, compute the Investment balance on Dec. 31, 20206. Dividend income for 2020 using cost method.7. Non-controlling interest in Net Income on Dec. 31, 2020.8. Non-controlling interest on Dec. 31, 2020.9. Profit for the period attributable to Equity Holders of Parent on Dec. 31, 2020.10. Consolidated/Group Net Income on Dec. 31, 2020.11.…
The Ludel Company acquired the net assets of the Girl Conrad Company on January 1, 2018, and made the following entry to record the purchases:Current assets P100,000Equipment 150,000Land 50,000Buildings 300,000Goodwill 100,000Liabilities 80,000Common stock, P1 par 100,000Paid-in capital in excess of par 520,0001. Assuming that additional shares on January 1, 2020 would be issued on that date to compensate for any fall in the value of Ludel common stock below P16 per share. The settlement would be to cure the deficiency by issuing added shares based on their fair value on January 1, 2020. The fair price of the shares on January 1, 2020 was P10.What is the additional number of shares issued on January 1, 2020 to compensate for any fall in the value of the stock? a. 60,000b. 100,000c. 10,000d. 160,000 2. The Jonnie Company owns 75% of the Junior Company. On December 31, 2020, the last day of the accounting period, Junior sold to Jonnie a non-current asset for P200,000. The asset…
On 1/1/2019 P Company acquired 70% of S company for 400000 JD. On 31/12/2019 S company reported net income 43000 JD and declared dividends 13000 JD. Positive differences is 35000 JD relating to assets with 5 years life. Using the complete equity method, compute investment balance on 31/12/2019. Select one: a. 370600 b. 369200 C. 367800 d. 366400
Fill in the blanks: On January 1, 2020 Iskrambol Company purchased 20% of lce Buko Company's ordinary shares for P3,000,000.00. During 2020, Ice Buko reported a net income of P3,500,000.00 and paid a cash dividends of P2,000,000.00 on its ordinary shares. Compute a Investment Income for 2020 The balance of "Investment in associale" as of 12.31.2020 ( Previous 23 f
On 1/1/2019 P Co acquired 75% of S Co's outstanding common stock for cash The fair value of the noncontrolling interest was equal to the proportionate share of the book value of S Co's net assets at the date of acquisition. Selected balance sheet data on January 1, 2019, are as follows P S total assets 252,000 108,000 liabilities 74,000 36,000 common stock 60,000 30,000 retained earning 120,000 42,000 Based on the preceding information, what amount will P Company report as common stock in its consolidated balance sheet on 1/1/2019? Select one: a. 78, 000 b. 90, 000 c. 123,000 d. 60, 000
A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…