Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Chapter 3, Problem 3.4.4E
To determine
Introduction:
By consolidation it means the amalgamation of two different entities into a single company in resultant which would further encompass a parent or holding entity and subsidiary company itself. Consolidation can take place either by acquisition or purchase of voting stock or by merger.
To choose: The option that correctly explains the result of the ownership of 51% of the outstanding voting stock of a company.
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Chapter 3 Solutions
Advanced Financial Accounting
Ch. 3 - What is the basic idea underlying the preparation...Ch. 3 - How might consolidated statements help an investor...Ch. 3 - Prob. 3.3QCh. 3 - Prob. 3.4QCh. 3 - Prob. 3.5QCh. 3 - Prob. 3.6QCh. 3 - Prob. 3.7QCh. 3 - Prob. 3.8QCh. 3 - Prob. 3.9QCh. 3 - Prob. 3.10Q
Ch. 3 - Prob. 3.11QCh. 3 - Prob. 3.12QCh. 3 - What is meant by indirect control? Give an...Ch. 3 - Prob. 3.14QCh. 3 - Prob. 3.15QCh. 3 - Prob. 3.16QCh. 3 - Prob. 3.17QCh. 3 - Prob. 3.18QCh. 3 - Prob. 3.1CCh. 3 - Prob. 3.2CCh. 3 - Prob. 3.1.1ECh. 3 - Prob. 3.1.2ECh. 3 - Prob. 3.1.3ECh. 3 - Prob. 3.1.4ECh. 3 - Multiple-Choice Question on Variable Interest...Ch. 3 - Multiple-Choice Question on Variable Interest...Ch. 3 - Prob. 3.2.3ECh. 3 - Prob. 3.2.4ECh. 3 - Prob. 3.3.1ECh. 3 - Prob. 3.3.2ECh. 3 - Prob. 3.3.3ECh. 3 - Prob. 3.4.1ECh. 3 - Prob. 3.4.2ECh. 3 - Prob. 3.4.3ECh. 3 - Prob. 3.4.4ECh. 3 - Balance Sheet Consolidation On January 1, 20X3,...Ch. 3 - Prob. 3.6ECh. 3 - Prob. 3.7ECh. 3 - Prob. 3.8ECh. 3 - Prob. 3.9ECh. 3 - Reporting for a Variable Interest Entity Gamble...Ch. 3 - Prob. 3.11ECh. 3 - Prob. 3.12ECh. 3 - Prob. 3.13ECh. 3 - Prob. 3.14ECh. 3 - Prob. 3.15ECh. 3 - Prob. 3.16ECh. 3 - Prob. 3.17ECh. 3 - Prob. 3.18ECh. 3 - Prob. 3.19.1PCh. 3 - Prob. 3.19.2PCh. 3 - Prob. 3.20PCh. 3 - Prob. 3.21PCh. 3 - Prob. 3.22PCh. 3 - Prob. 3.23PCh. 3 - Prob. 3.24PCh. 3 - Prob. 3.25PCh. 3 - Prob. 3.26PCh. 3 - Prob. 3.27PCh. 3 - Prob. 3.28PCh. 3 - Prob. 3.29PCh. 3 - Consolidated Worksheet at End of the First Year of...Ch. 3 - Prob. 3.31P
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Peer Company acquired of the common stock of Sight Company on January 1, year one, for On that date, Sight had the following trial balance: account debit Additional paid in capital Building (12-year life) Common stock Current assets Equipment (6-yr life) Land Liabilities (due in 4 years) Retained earnings 1/year 1 Totals $250,000 170,000 160,000 110,000 $690,000 During year one, Sight reported net income of During year two, Sight reported net income of During year one, Sight paid dividends of During year two, Sight paid dividends of Building Equipment credit $100,000 170,000 300,000 120,000 $690,000 On January 1, year one, fair values of some Sight's accounts were: Land $122,000 $274,000 $196,000 There was no impairment of any goodwill arising from the acquisition. Peer uses the equity method for this investment. Part A. Use the data for the Peer Company acquisition of the Sight Company to prepare the consolidation journal entries (such as entry S, A,....) for December 31 of year one.…arrow_forward8. During the post-merger integration of two companies, which of the following activities support a successful change? a. implementing the merger integration plan as soon as possible b. ensuring key profit levers are under control c. constant communications d. a and c only e. all of the abovearrow_forwardQuestions: a. How much is the Consolidated Net Income? b. Using the same problem, how much is the Goodwill to be presented in the consolidated financial statements at December 31, 2022? c. Using the same problem, how much is the Consolidated Shareholders’ Equity at December 31, 2022? -------arrow_forward
- a.Which of the following statement/s regarding the method of consolidation is true: (1) Subsidiaries are consolidated in full (2) Associates are equity accounted Select one: a. Neither statement b. Statement (1) only c. Both statements d. Statement (2) Q2. Which of the following is a characteristic of the cost method of accounting for subsidiary operations? Select one: a. Parent company net income equals consolidated net income. b. More working paper eliminations are required than for the equity method of accounting. c. Consolidated amounts differ from the comparable amounts under the equity method of accounting. d. None of the above Q3. How soon does goodwill acquired in a business combination need to be tested after an acquisition? Select one: a. The year after acquisition b. The year of acquisition c. Two years after acquisition d. None of the abovearrow_forwardWhy must the eliminating entries be entered in the consolidation worksheet each time consolidated statements are prepared?How is the beginning-of-period non-controlling interest balance determined?How is the end-of-period non-controlling interest balance determined? Provide an example.arrow_forwardChoose the correct. A company acquires a subsidiary and will prepare consolidated financial statements for external reporting purposes. For internal reporting purposes, the company has decided to apply the equity method. Why might the company have made this decision?a. It is a relatively easy method to apply.b. Operating results appearing on the parent’s financial records reflect consolidated totals.c. GAAP now requires the use of this particular method for internal reporting purposes.d. Consolidation is not required when the parent uses the equity method.arrow_forward
- 1. what is the basis for consolidation?2. is goodwill being remeasured to fair value at each reporting period? if false, what is the correct answer?3.a. Before consolidation, entity A's retained is how much? 3.b.he consolidated earning is how much?this is the scenario for #3a and b:entity A acquired 90% interest in ENtity B on January 1, 20x1 when entity B's net assets had a fair value of 100. On December 31, 20x2, Entity B's net assets increased to 200 after adjustments for acquisition date fair values, net of depreciation.arrow_forward33. A purchaser of a business will generally prefer which of the following? An asset purchase to receive new basis for depreciation A stock purchase because the seller will receive capital gains Utilizing a §338(g) election If the selling entity is an S Corporation making a joint §338(h)(10) election All of the above A,C,&D What form is required to report the allocation of the purchase price? ____________arrow_forwardWhich of the following is NOT included in the cost of an acquired company? (applying section 19 of IFRS for SMEs) a. Contingent consideration determinable at the consummation date of the combination b. Finder’s fee for arranging the combination c. Cost of registering and issuing equity securities d. None of the abovearrow_forward
- Choose the correct. According to the acquisition method of accounting for business combinations, costs paid to attorneys and accountants for services in arranging a merger should bea. Capitalized as part of the overall fair value acquired in the merger.b. Recorded as an expense in the period the merger takes place. c. Included in recognized goodwill.d. Written off over a five-year maximum useful life.arrow_forwardWhere the parent company does not hold 100 percent equity of the subsidiary company, what portion of the intra-group transactions between the parent entity and the subsidiary entity will need to be eliminated on consolidation? What is a non-controlling interest, and how should it be disclosed? How are non-controlling interests affected by intra-group transactions? What are the three steps we use to calculate total non-controlling interest? answer all the points with refrence. This is a full question. Thanksarrow_forwardQUESTION: What amount of gain or loss does Ernesto recognize if the transaction is structured as a Type A merger?arrow_forward
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