Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Question
Chapter 1, Problem 1.4.2E
To determine
Net assets
Net assets are calculated by deducting amount of total liabilities from total assets. Amount of net assets is generally equal to the total of shareholders’ equity section of the
To choose:The correct option out of four given options.
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9. A parent company sells land to its wholly-owned subsidiary in a prior year, reporting a gain of $20,000. In the
current year, the subsidiary sells the land to an outside developer and reports a gain of $50,000. In the consolidation
working paper at the end of the current year, the elimination of this transaction will result in: Select one: a. A $70,000
decrease in land b. A $20,000 decrease in beginning retained earnings c. A $20,000 increase in gain on sale of land d.
A $50,000 increase in investment in subsidiary
The partners of the Liwa Engineering Company have decided to terminate the business. The balances of the
company's accounts prior to the liquidation are given in the Table 1.
Table 1
Book value in OMR
Cash
28,500
Plant assets (net)
75,000
Machinery and equipment (net)
2,500
Inventories
1,300
Liabilities
47,300
Capital, Partner 1
36,000
Capital, Partner 2
24,000
Additional information:
The partner 1 and the partner 2 share profits and losses in the ratio 7:3.
In the process of liquidation, the non-cash assets are sold for OMR 125,000.
Required:
A. You are asked to prepare a schedule of cash payments (Table 2), showing how cash will be distributed
between the partners as it becomes available.
B. Based on the information above (Table 2 – Schedule of Cash Payments), journalize the transactions.
On January 1, 20x1, Magnum Corp. acquired all the identifiable assets and assumed the liabilities of Colt Corp. The book values and fair values of Magnum and Colt Corp. prior to business combination are as follows:
Magnum
Colt
Book value
Fair Value
Book Value
Fair Value
Cash
6,000,000
6,000,000
1,000,000
1,000,000
Accounts Receivable
500,000
470,000
120,000
105,000
Allowance for doubtful account
(40,000)
(20,000)
Inventories
1,000,000
950,000
500,000
510,000
Land
3,000,000
3,200,000
1,200,000
1,300,000
Building
2,000,000
1,600,000
1,000,000
850,000
Accumulated Depreciation
(500,000)
(200,000)
Total
11,960,000
12,220,000
3,600,000
Accounts Payable
3,000,000
2,500,000
1,000,000
1,000,000
Notes Payable
500,000
480,000
600,000
550,000
Ordinary share - P100 par
4,000,000
1,000,000
Share premium
1,200,000
200,000…
Chapter 1 Solutions
Advanced Financial Accounting
Ch. 1 - What types of circumstances would encourage...Ch. 1 - How would the decision to dispose of a segment of...Ch. 1 - Prob. 1.3QCh. 1 - Prob. 1.4QCh. 1 - Prob. 1.5QCh. 1 - Prob. 1.6QCh. 1 - Prob. 1.7QCh. 1 - Prob. 1.8QCh. 1 - Prob. 1.9QCh. 1 - Prob. 1.10Q
Ch. 1 - Prob. 1.11QCh. 1 - Prob. 1.12QCh. 1 - Prob. 1.13QCh. 1 - Prob. 1.14QCh. 1 - Within the measurement period following a business...Ch. 1 - Prob. 1.16QCh. 1 - Prob. 1.1CCh. 1 - Prob. 1.2CCh. 1 - Prob. 1.3CCh. 1 - Prob. 1.4CCh. 1 - Risks Associated with Acquisitions Not all...Ch. 1 - Prob. 1.6CCh. 1 - Prob. 1.1.1ECh. 1 - Prob. 1.1.2ECh. 1 - Prob. 1.1.3ECh. 1 - Multiple-Choice Questions on Complex Organizations...Ch. 1 - Prob. 1.1.5ECh. 1 - Prob. 1.2.1ECh. 1 - Prob. 1.2.2ECh. 1 - Multiple-Choice Questions on Recording Business...Ch. 1 - Prob. 1.2.4ECh. 1 - Multiple-Choice Questions on Recording Business...Ch. 1 - Multiple-Choice Questions on Reported Balances...Ch. 1 - Multiple-Choice Questions on Reported Balances...Ch. 1 - Prob. 1.3.3ECh. 1 - Prob. 1.3.4ECh. 1 - Prob. 1.4.1ECh. 1 - Prob. 1.4.2ECh. 1 - Prob. 1.4.3ECh. 1 - Multiple-Choice Questions Involving Account...Ch. 1 - Prob. 1.4.5ECh. 1 - Prob. 1.5ECh. 1 - Prob. 1.6ECh. 1 - Prob. 1.7ECh. 1 - Prob. 1.8ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.10ECh. 1 - Balances Reported Following Combination Palm...Ch. 1 - Goodwill Recognition Spur Corporation reported the...Ch. 1 - Acquisition Using Debentures Planter Corporation...Ch. 1 - Bargain Purchase Using the data resented in E1-13,...Ch. 1 - Prob. 1.15ECh. 1 - Prob. 1.16ECh. 1 - Prob. 1.17ECh. 1 - Prob. 1.18ECh. 1 - Prob. 1.19ECh. 1 - Prob. 1.20ECh. 1 - Prob. 1.21ECh. 1 - Prob. 1.22ECh. 1 - Prob. 1.23ECh. 1 - Prob. 1.24PCh. 1 - Prob. 1.25PCh. 1 - Prob. 1.26PCh. 1 - Acquisition in Multiple Steps Peal Corporation...Ch. 1 - Prob. 1.28PCh. 1 - Prob. 1.29PCh. 1 - Prob. 1.30PCh. 1 - Prob. 1.31PCh. 1 - Computation of Account Balances Saspro Division is...Ch. 1 - Prob. 1.33PCh. 1 - Prob. 1.34PCh. 1 - Prob. 1.35PCh. 1 - Business Combination Following are the balance...Ch. 1 - Prob. 1.37PCh. 1 - Prob. 1.38PCh. 1 - Prob. 1.39PCh. 1 - Prob. 1.40P
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