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 1.38P
a.
To determine
Concept Introduction:
Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.
the number of shares did P issue to acquire Stork’s assets and liabilities.
a.
Expert Solution
Answer to Problem 1.38P
The number of shares issued is
Explanation of Solution
Computation of a number of shares issued:
b.
To determine
Concept Introduction:
Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.
the total market value of the shares issued by P.
b.
Expert Solution
Answer to Problem 1.38P
The total market value of the shares issued by P is
Explanation of Solution
Computation of the total market value of the shares issued:
c.
To determine
Concept Introduction:
Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.
the fair value of inventory held by S at the date of combination.
c.
Expert Solution
Answer to Problem 1.38P
The fair value of inventory held by Stork at the date of combination is
Explanation of Solution
Computation of fair value of inventory held:
d.
To determine
Concept Introduction:
Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.
the fair value of identifiable net assets held by Stork at the date of combination.
d.
Expert Solution
Answer to Problem 1.38P
The fair value of identifiable net assets held by Stork at the date of combination is
Explanation of Solution
Computation of the fair value of identifiable net assets held:
| Particulars | Amount | |
| Cash | ||
| Inventory | ||
| Building and Equipment (Net) | ||
| Accounts Payable | ||
| Bonds Payable | ||
| Bonds Premium | ||
| Net Assets of Combined Entity | ||
| Cash | ||
| Accounts Receivable | ||
| Inventory | ||
| Building and Equipment (Net) | ||
| Accounts Payable | ||
| Bonds Payable | ||
| Bonds Premium | ||
| Net Assets of P Inc. | ||
| Net Assets of S Company |
e.
To determine
Concept Introduction:
Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.
the amount of
e.
Expert Solution
Answer to Problem 1.38P
The amount of goodwill is
Explanation of Solution
Computation of fair value of identifiable net assets held:
Total Market Value of shares of P Inc. LessNet Assets of S Company
f.
To determine
Concept Introduction:
Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.
the balance in
f.
Expert Solution
Answer to Problem 1.38P
The balance in retained earnings to be reported is
Explanation of Solution
The number is reported in its financial statement by P Inc. of
g.
To determine
Concept Introduction:
Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.
the amount of depreciation expense that will be reported on those assets in 20X2 if the average life of the assets held by S Company has an average life of
g.
Expert Solution
Answer to Problem 1.38P
The balance in retained earnings to be reported is
Explanation of Solution
Computation of depreciation amount:
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Students have asked these similar questions
Gumiho Corporation acquired Forest Company through an exchange of common shares. All of Forest's assets
and liabilities were immediately transferred to Gumiho. Gumiho's common stock was trading at P20 per share at
the time of exchange. Following selected information is also available.
Par value of shares outstanding
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P400,000
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Based on the proceeding information, what is the number of shares was issued at the time of the exchange?
25,000
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The Alhambra Company had these accounts at the time it was acquired by Kingdom Co.:
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An assumed contingent liability arising from past events with a fair value amounting…
2) On January 1, 20X5, Peery Company acquired 100 percent of Standard Company's
common shares at underlying book value. Peery uses the equity method in accounting for its
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follows:
Item
Current Assets
Depreciable Assets
Investment in Standard
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Other Expenses
Depreciation Expense
Dividends Declared
Accumulated Depreciation
Current Liabilities
Long-Term Debt
Common Stock
Retained Earnings
Sales
Income from Standard
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Peery Company
Debit
$ 238,000
300,000
100,000
90,000
30,000
32,000
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$ 120,000
50,000
120,000
100,000
175,000
200,000
25,000
Standard Company
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70,000
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$ 790,000 $ 790,000 $362,000
$ 85,000
30,000
50,000
50,000
35,000
112,000
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Required:
1. Prepare the consolidation entries needed as of December 31, 20X5, to complete a
consolidation worksheet.
2. Prepare a three-part consolidation worksheet as of December 31, 20X5.
Required information
On January 1, 20X2, Power Company acquired 80 percent of Strong Company's outstanding stock for cash. The fair value
of the noncontrolling interest was equal to a proportionate share of the book value of Strong Company's net assets at the
date of acquisition. Selected balance sheet data at December 31, 20X2 are as follows:
Total Assets
Liabilities
Common Stock
Retained Earnings
Total Liabilities & Stockholders' Equity
Multiple Choice
O
$35,200
Based on the preceding information, what amount should be reported as noncontrolling interest in net assets in Power Company's December 31, 20X2, consolidated balance sheet?
$48,200
$76,800
Power
$ 564,000
O $112,800
180,000
150,000
234,000
$ 564,000
Strong
$ 216,000
65,000
80,000
96,000
$ 241,000
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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