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Manal Elkhoshkhany
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1 On January 1, 2011, Price Company purchased an 80% interest

Customer Question

1 On January 1, 2011, Price Company purchased an 80% interest in the common stock of Stahl Company for $1,040,000, which was $60,000 greater than the book value of equity acquired. The difference between implied and book value relates to the subsidiary’s land.

The following information is from the consolidated retained earnings section of the consolidated statements workpaper for the year ended December 31, 2011:


STAHL CONSOLIDATED
COMPANY BALANCES
1/01/11 retained earnings $300,000 $1,400,000
Net income 220,000 680,000
Dividends declared (80,000) (140,000)
12/31/11 retained earnings $440,000 $1,940,000

Stahl’s stockholders’ equity includes only common stock and retained earnings.

Required:

A. Prepare the workpaper eliminating entries for a consolidated statements workpaper on December 31, 2011. Price uses the cost method.

B. Compute the total noncontrolling interest to be reported on the consolidated balance sheet on December 31, 2011.


4-2 On October 1, 2011, Packer Company purchased 90% of the common stock of Shipley Company for $290,000. Additional information for both companies for 2011 follows:

PACKER SHIPLEY
Common stock $300,000 $90,000
Other contributed capital 120,000 40,000
Retained Earnings, 1/1 240,000 50,000
Net Income 260,000 160,000
Dividends declared (10/31) 40,000 8,000

Any difference between implied and book value relates to Shipley’s land. Packer uses the cost method to record its investment in Shipley. Shipley Company’s income was earned evenly throughout the year.

Required:

A. Prepare the workpaper entries that would be made on a consolidated statements workpaper on December 31, 2011. Use the full year reporting alternative.

B. Calculate the controlling interest in consolidated net income for 2011.

5-1 Phillips Company purchased a 90% interest in Standards Corporation for $2,340,000 on January 1, 2010. Standards Corporation had $1,650,000 of common stock and $1,050,000 of retained earnings on that date.

The following values were determined for Standards Corporation on the date of purchase:

Book Value Fair Value
Inventory $240,000 $300,000
Land 2,400,000 2,700,000
Equipment 1,620,000 1,800,000

Required:
A. Prepare a computation and allocation schedule for the difference between the implied and book value in the consolidated statements workpaper.

B. Prepare the January 1, 2010, workpaper entries to eliminate the investment account and allocate the difference between implied and book value.


5-2 Pullman Corporation acquired a 90% interest in Sleeper Company for $6,500,000 on January 1 2010. At that time Sleeper Company had common stock of $4,500,000 and retained earnings of $1,800,000. The balance sheet information available for Sleeper Company on January 1, 2010, showed the following:

Book Value Fair Value
Inventory (FIFO) $1,300,000 $1,500,000
Equipment (net) 1,500,000 1,900,000
Land 3,000,000 3,000,000

The equipment had a remaining useful life of ten years. Sleeper Company reported $240,000 of net income in 2010 and declared $60,000 of dividends during the year.

Required:
Prepare the workpaper entries assuming the cost method is used, to eliminate dividends, eliminate the investment account, and to allocate and depreciate the difference between implied and book value for 2010.
7-1 Parker Company, a computer manufacturer, owns 90% of the outstanding stock of Santo Company. On January 1, 2011, Parker sold computers to Santo for $500,000. The computers, which are inventory to Parker, had a cost to Parker of $350,000. Santo Company estimated that the computers had a useful life of six years from the date of purchase.

Santo Company reported net income of $310,000, and Parker Company reported net income of $870,000 from its independent operations (including sales to affiliates) for the year ended December 31, 2011.

Required:
A. Prepare in general journal form the workpaper entries necessary because of the intercompany sales in the consolidated statements workpaper for both 2011 and 2012.

B. Calculate controlling interest in consolidated net income for 2011.


7-2 On January 1, 2008, Penny Company purchased a 90% interest in Stein Company for $800,000, the same as the book value on that date. On January 1, 2011, Stein sold new equipment to Penny for $16,000. The equipment cost $11,000 and had a five year estimated life as of January 1, 2011.

During 2012, Penny sold merchandise to Stein at 20% above cost in the amount (selling price) of $126,000. At the end of the year, Stein had one-third of this merchandise in its ending inventory. At the beginning of 2012, Stein had $48,000 of inventory purchased in 2011 from Penny

Required:
A. Prepare all workpaper entries necessary to eliminate the effects of the intercompany sales on the consolidated financial statements for 2012.

B. Calculate the amount of noncontrolling interest to be deducted from consolidated net income in the consolidated income statement for 2012. Stein Company reported $40,000 of net income in 2012.


7-3 Pringle Company owns 104,000 of the 130,000 shares outstanding of Seely Corporation. Seely Corporation sold equipment to Pringle Company on January 1, 2011 for $740,000. The equipment was originally purchased by Seely Corporation on January 1, 2010 for $1,280,000 and at that time its estimated depreciable life was 8 years. The equipment is estimated to have a remaining useful life of four years on January 1, 2011. Both companies use the straight-line method to depreciate equipment. In 2012 Pringle Company reported net income from its independent operations of $3,270,000, and Seely Corporation reported net income of $820,000 and declared dividends of $60,000. Pringle Company uses the cost method to record the investment in Seely Company.

Required:
A. Prepare, in general journal form, the workpaper entries relating to the intercompany sale of equipment that are necessary in the December 31, 2012 consolidated financial statements workpapers.

B. Calculate the amount of noncontrolling interest to be deducted from consolidated net income in the consolidated income statement for 2012.

C. Calculate controlling interest in consolidated net income for 2012.
8-1 Piper Company purchased Snead Company common stock through open-market purchases as follows:
Acquired
Date Shares Cost
1/1/09 1,500 $ 50,000
1/1/10 3,300 $ 90,000
1/1/11 6,600 $250,000

Snead Company had 12,000 shares of $20 par value common stock outstanding during the entire period. Snead had the following retained earnings balances on the relevant dates:

January 1, 2009 $ 90,000
January 1, 2010 30,000
January 1, 2011 150,000
December 31, 2011 300,000

Snead Company declared no dividends in 2009 or 2010 but did declare $60,000 of dividends in 2011. Any difference between cost and book value is assigned to subsidiary land. Piper uses the equity method to account for its investment in Snead.

Required:
A. Prepare the journal entries Piper Company will make during 2010 and 2011 to account for its investment in Snead Company.
B. Prepare workpaper eliminating entries necessary to prepare a consolidated statements workpaper on December 31, 2011.


8-2 On January 1, 2008, Patel Company acquired 90% of the common stock of Seng Company for $650,000. At that time, Seng had common stock ($5 par) of $500,000 and retained earnings of $200,000.

On January 1, 2010, Seng issued 20,000 shares of its unissued common stock, with a market value of $7 per share, to noncontrolling stockholders. Seng’s retained earnings balance on this date was $300,000. Any difference between cost and book value relates to Seng’s land. No dividends were declared in 2010.

Required:
A. Prepare the entry on Patel’s books to record the effect of the issuance assuming the cost method.
B. Prepare the elimination entries for the preparation of a consolidated statements workpaper on December 31, 2010 assuming the cost method.
Submitted: 3 years ago.
Category: Homework
Expert:  Manal Elkhoshkhany replied 3 years ago.

Hello

 

Please note that the amount offered would not compensate for the work involved. Please post one question per post, or offer a combined amount for all questions, or offer a bonus

 

Thank you

Customer: replied 3 years ago.

 

 

I need this today until 6PM....,so how much for all questions ?

Customer: replied 3 years ago.

 

 

 

I am looking the solution of those questions, today before 6PM.

 

Thank you,

Expert:  Manal Elkhoshkhany replied 3 years ago.

A fair price is usually between $9 & $16 per question, but please advise the

name of the book you are using: Title, author's name, and edition. This would allow me to post solutions faster

 

Thank you

Customer: replied 3 years ago.
Advance accuonting
jeter/chaney
2010 custom edition


Also....tell me the total net price?



Customer: replied 3 years ago.

 

 

still I am waiting your answer.....

 

 

 

thank you

solomon

Customer: replied 3 years ago.

 

 

 

Those question , my due date is tomorrow...as soon as posible

I need by tomorrow morning.....

Expert:  Manal Elkhoshkhany replied 3 years ago.

Hello

 

I am sorry for the late reply, I had an emergency last night and could not get back to you until now. As I have advised you, the post is way underpriced, and I think that between $9 and $16 per problem (A total of between $81 and $144) would be fair).

 

I cannot start on the assignment before I hear back from you as this is a real long assignment, so hopefully I will hear from you before your deadline. You can either edit the amount offered or you can leave the offer as it is and add the difference as a bonus.

 

Please advise your decision as we do not have much time left

 

Thank you and I apologize again for responding late

Customer: replied 3 years ago.

 

 

I will offer you .....$63.00......and also the solution urgently...by today until 9PM.

please send me a solution as soon as posible , I need urgently ...

and also tell me the payement method!

 

 

thank you

solomon

Customer: replied 3 years ago.

 

 

I will offer you .....$81.00......and also the solution urgently...by today until 9PM.

please send me a solution as soon as posible , I need urgently ...

and also tell me the payement method!

 

 

thank you

solomon

Expert:  Manal Elkhoshkhany replied 3 years ago.

I will agree because I owe you one (By getting back to you late :), and also because those are a lot of questions, but please for future posts take the number of questions into consideration when making your offer.

 

After I post the solutions, please click the accept button. Once you do that, you will have the option to add a bonus, so please add the difference as a bonus

 

Give me just a couple of minutes and I will post the answers. I am actually done with them, but I need to finish something I am working on now

 

Thank you

 

 

Expert:  Manal Elkhoshkhany replied 3 years ago.
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