Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 10, Problem 10.24P
To determine
Consolidated statement of cash flow: consolidated entities, as with individual companies, must present a statement of cash flow when they issue a complete set of financial statements. A consolidated statement of
preparation of consolidated statement of cash flows for 20X6using indirect method.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Comparative consolidated balance sheet data for Iverson, Inc., and its 80 percent-owned subsidiary Oakley Co. follow:
Cash
Accounts receivable (net)
Merchandise inventory
Buildings and equipment (net)
Trademark
Totals
Accounts payable
Notes payable, long-term
Noncontrolling interest
Common stock, $10 par
Retained earnings (deficit)
Totals
2018
$ 34,100
64,000
95,450
93,300
103,200
$ 390,050
$ 106,050
62,250
200,000
21,750
$ 390,050
2017
$ 17,750
46,000
51,250
111,000
121,500
$347,500
$ 86,750
31,800
53,250
200,000
(24,300)
$ 347,500
Additional Information for Fiscal Year 2018
• Iverson and Oakley's consolidated net income was $68,250.
• Oakley paid $6,000 in dividends during the year. Iverson paid $12,000 in dividends.
Oakley sold $16,900 worth of merchandise to Iverson during the year.
• There were no purchases or sales of long-term assets during the year.
In the 2018 consolidated statement of cash flows for Iverson Company:
Net cash flows from operating activities were
The separate condensed balance sheets of Patrick Corporation and its wholly-owned subsidiary, Sean Corporation, are as
follows:
Cash
Accounts receivable (net)
Inventories
BALANCE SHEETS
December 31, 2020
Plant and equipment (net)
Investment in Sean
Total assets
Accounts payable
Long-term debt
Common stock ($10 par)
Additional paid-in capital
Retained earnings
Total liabilities and
shareholders' equity
Additional Information:
Patrick
76,000
148,000
96,000
632,000
462,000
$1,414,000
$
Sean
$ 56,000
24,000
80,000
270,000
$430,000
98,000
22,000
66,000
8,000
832,000
236,000
$1,414,000 $ 430,000
142,000
110,000
330,000
• On December 31, 2020, Patrick acquired 100 percent of Sean's voting stock in exchange for $462,000.
• At the acquisition date, the fair values of Sean's assets and liabilities equaled their carrying amounts, respectively,
except that the fair value of certain items in Sean's inventory were $20,000 more than their carrying amounts.
In the December 31, 2020, consolidated…
Pratt Company acquired all of the outstanding shares of Spider, Inc., on December 31, 2021, for $531,550 cash. Pratt will operate
Spider as a wholly owned subsidiary with a separate legal and accounting identity. Although many of Spider's book values
approximate fair values, several of its accounts have fair values that differ from book values. In addition, Spider has internally
developed assets that remain unrecorded on its books. In deriving the acquisition price, Pratt assessed Spider's fair and book
value differences as follows:
Computer software
Equipment
Client contracts
In-process research and development
Notes payable
Cash
Receivables
Inventory
Investment in Spider
Computer software
Buildings (net)
Equipment (net)
At December 31, 2021, the following financial information is available for consolidation (credit balances in parentheses):
Client contracts
Goodwill
Total assets
Accounts payable
Notes payable
Common stock
Additional paid-in capital
Retained earnings
Total liabilities…
Chapter 10 Solutions
Advanced Financial Accounting
Ch. 10 - Prob. 10.1QCh. 10 - Why are dividend payments to noncontrolling...Ch. 10 - Prob. 10.3QCh. 10 - Why are changes in inventory balances not shown in...Ch. 10 - Prob. 10.5QCh. 10 - How is an increase in inventory included in the...Ch. 10 - What portion of the sales of an acquired company...Ch. 10 - Prob. 10.8QCh. 10 - Prob. 10.9QCh. 10 - Prob. 10.10Q
Ch. 10 - Prob. 10.11QCh. 10 - Prob. 10.12QCh. 10 - Prob. 10.13QCh. 10 - Prob. 10.14QCh. 10 - How do interperiod income tax allocation...Ch. 10 - How does the use of interperiod tax allocation...Ch. 10 - Prob. 10.17QCh. 10 - Prob. 10.18QCh. 10 - Prob. 10.19QCh. 10 - When a subsidiary’s convertible bond is treated as...Ch. 10 - Prob. 10.21QCh. 10 - What effect does the presence of a noncontrolling...Ch. 10 - Prob. 10.3CCh. 10 - Consolidated Cash Flows Analysis The consolidated...Ch. 10 - Prob. 10.1ECh. 10 - Prob. 10.2ECh. 10 - Prob. 10.3ECh. 10 - Prob. 10.4ECh. 10 - Prob. 10.5ECh. 10 - Direct Method Cash Flow Statement Using the data...Ch. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - Prob. 10.9ECh. 10 - Prob. 10.10ECh. 10 - Prob. 10.11ECh. 10 - Prob. 10.12ECh. 10 - Prob. 10.13ECh. 10 - Prob. 10.14ECh. 10 - Effect of Convertible Bonds on Earnings per Share...Ch. 10 - Effect of Convertible Preferred Stock on Earnings...Ch. 10 - Prob. 10.17PCh. 10 - Prob. 10.18PCh. 10 - Preparing a Statement of Cash Flows—Direct Method...Ch. 10 - Prob. 10.20PCh. 10 - Prob. 10.21PCh. 10 - Prob. 10.22PCh. 10 - Prob. 10.23PCh. 10 - Prob. 10.24PCh. 10 - Prob. 10.25PCh. 10 - Prob. 10.26PCh. 10 - Prob. 10.27PCh. 10 - Prob. 10.28PCh. 10 - Prob. 10.29PCh. 10 - Prob. 10.30PCh. 10 - Prob. 10.31PCh. 10 - Prob. 10.32PCh. 10 - Prob. 10.33P
Knowledge Booster
Learn more about
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
- On January 1, 2021, Casey Corporation exchanged $3,209,000 cash for 100 percent of the outstanding voting stock of Kennedy Corporation. Casey plans to maintain Kennedy as a wholly owned subsidiary with separate legal status and accounting information systems. At the acquisition date, Casey prepared the following fair-value allocation schedule: $ 3,209,000 Fair value of Kennedy (consideration transferred) Carrying amount acquired 2,600,000 609,000 Excess fair value to buildings (undervalued) to licensing agreements (overvalued) to goodwill (indefinite life) Accounts Cash Accounts receivable Inventory Investment in Kennedy Buildings (net) Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from their separate financial records (credit balances in parentheses). Licensing agreements Goodwill Total assets Accounts payable Long-term debt Common stock Additional paid-in capital Retained earnings Total liabilities and equities $…arrow_forwardA parent acquired a subsidiary by issuing $2000,000 common stock and $1000,000 long term debt. This acquisition affects the cash flow statement as flow: A. Not affect the cash flow statement. B. Increase cash under investing activity section by $3000,000. C. Increase cash under financing activity section by $2000,000. D. Increase cash under financing activity section by $3000,000arrow_forwardNewly Corporation Consolidated Balance Sheet (in thousands except share data) Fiscal Year Ended Dec. 31, 2008 Dec. 31, 2007 ASSETS Current assets: Cash and cash equivalents Accounts receivable, net $ 369 $ 427 58 76 Inventories 489 481 Prepaid expenses and other current assets Deferred income taxes, net 107 226 43 40 Total current assets 1,066 Property, plant and equipment, net Other assets 1,250 3,287 1,661 5,137 1,168 TOTAL ASSETS 7,371 2$ 6,198 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable Accrued compensation and related costs Accrued taxes Current portion of long-term debt $ 429 $ 242 104 98 132 141 89 82 Total current liabilities 754 563 Long-term debt 2,630 2,630 Total liabilities 3,384 3,192 Shareholders' equity: Common stock ($0.1 par value)-authorized, 4,000,000 shares; issued and outstanding, 3,500,000. Paid-in capital in excess of par Retained earnings 350 350 2,415 1,222 2,415 241 Total shareholders' equity 3,987 3,006 TOTAL LIABILITIES AND…arrow_forward
- Consolidated Cash Flow Statement of Pineda Corporation and its subsidiary Swamy Corporation as of December 2019 and 2020: Assets 2020 2019 Net Change Incr. (Decr.) $ $ $ Cash 313,000 195,000 118,000 Marketable equity securities (at cost) 175,000 175,000 Allowance to reduce marketable equity securities to market (13,000) (24,000) 11,000 Accounts receivable (net) 418,000 440,000 (22,000) Inventories 595,000 525,000 70,000 Land 385,000 170,000 215,000 Plant and equipment 755,000 690,000 65,000 Accumulated depreciated (199,000) (145,000)…arrow_forwardThe balance sheets of E Ltd. and J Ltd. on December 30, Year 6, were as follows: Cash and receivables Inventory Plant assets (net) Intangible assets Current liabilities Long-term debt Common shares Retained earnings (deficit) Costs of arranging the acquisition Costs of issuing shares. On December 31, Year 6, E Ltd. issued 497 shares, with a fair value of $26 each, for 70% of the outstanding shares of J Ltd. Costs involved in the acquisition, paid in cash, were as follows: Plant assets Long-term debt The carrying amounts of J Ltd.'s net assets were equal to fair values on this date except for the following: Assets Liabilities and Equity J Ltd. $ 20,900 9,700 71,900 7,400 $ 109,900 $ 64,400 $ 30,100 98,900 45,200 155,800 46,600 91,500 (12,000) $ 410,600 $ 109,900 Fair value $ 65,700 42,800 E Ltd. was identified as the acquirer in the combination. Required: (a) Prepare the consolidated balance sheet of E Ltd. on December 31, Year 6, under the identifiable net assets method. Assets E Ltd.…arrow_forwardAn analysis of Karman Corporation's Investment in Marketable Securities account during Year 2 disclosed the following: Debit entries Credit entries Karman's Year 2 income statement included a $40,000 gain on sale of marketable securities and $30,000 dividend income from marketable securities. All payments and proceeds relating to marketable securities transactions were in cash. $ 160,000 240,000 The cash proceeds received by Karman Corporation in Year 2 for the sale of marketable securities was: Select one: a. $240,000. b. $280,000. c. $230,000. d. $160,000. $arrow_forward
- An analysis of R Corporation's Investment in Marketable Securities account during 20x6 disclosed the following: Debit Entries P175,000 Credit Entries P245,000 The company's come statement included a P35,000 gain on sale of marketable securities and P20,000 dividend income from marketable securities. All payments and proceeds relating to marketable securities transactions were in cash. 1. Cash Paid for the purchase of marketable securities 2. Cash proceeds recerved for the sale of marketable securities 3. Cash flow from operating activities 4. Cash flow from investing activities. Usc negative sign if your answer is net cash used.arrow_forwardRequired information Skip to question [The following information applies to the questions displayed below.] In preparation for developing its statement of cash flows for the year ended December 31, 2024, Rapid Pac, Incorporated, collected the following information: ($ in millions) Fair value of shares issued in a stock dividend $ 104.0 Payment for the early extinguishment of long-term bonds (book value: $90.0 million) 95.0 Proceeds from the sale of treasury stock (cost: $26.0 million) 31.0 Gain on sale of land 3.5 Proceeds from sale of land 10.5 Purchase of Microsoft common stock 160.0 Declaration of cash dividends 60.0 Distribution of cash dividends declared in 2023 57.0 2. In Rapid Pac’s statement of cash flows, what were net cash inflows (or outflows) from financing activities for 2024? Note: Cash outflows should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).arrow_forwardRequired information Skip to question [The following information applies to the questions displayed below.] In preparation for developing its statement of cash flows for the year ended December 31, 2024, Rapid Pac, Incorporated, collected the following information: ($ in millions) Fair value of shares issued in a stock dividend $ 104.0 Payment for the early extinguishment of long-term bonds (book value: $90.0 million) 95.0 Proceeds from the sale of treasury stock (cost: $26.0 million) 31.0 Gain on sale of land 3.5 Proceeds from sale of land 10.5 Purchase of Microsoft common stock 160.0 Declaration of cash dividends 60.0 Distribution of cash dividends declared in 2023 57.0 Required: 1. In Rapid Pac’s statement of cash flows, what were net cash inflows (or outflows) from investing activities for 2024? Note: Cash outflows should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as…arrow_forward
- During the year, an entity had the following activities: Payment for the early payment of long-term bonds payable of P5,000,000 4,000,000 Payment of cash dividend declared in prior year 2,000,000 Preference share capital converted into ordinary share capital 1,000,000 Proceeds from sale of treasury shares (cost of treasury shares P1,000,000) 1,500,000 What amount should be reported as net cash used in financing activities? a. 4,500,000 b. 3,500,000 c. 2,500,000 d. 5,500,000arrow_forward1. Given below are the consolidated statements of financial position and the consolidated statement of comprehensive income for Pelangi Berhad and its subsidiary Mentari Berhad: Consolidated Statement of Financial Position as at 31 December 2020 2019 RM'000 RM'000 Property, plant and equipment 1,350 1,300 Investment in associates company 1,000 900 Inventory 900 500 Trade receivables 500 700 Bank 300 150 4,050 3,550 Ordinary shares of RM1 each 2,500 2,500 Retained profits 560 260 Non-controlling interest 590 490 Trade payables 400 300 4,050 3,550 Consolidated Statement of Comprehensive Income for the year ended 31 December 2020 2020 RM'000 Profit 495 Share of profits of associate company (less impairment of goodwill) 130 Profit before tax 625 Тах (50) Profit after tax 575 Profit after tax attributable to: Equity holders of parent company 425 Non-controlling interest 150 575 Additional information: i. Tax charge for the year has been paid. ii. Group depreciation on property, plant and…arrow_forwardSeamus Industries Inc. buys and sells investments as part of its ongoing cash management. The following investment transactions were completed during the year: Dec. 31. At the end of the accounting period, the fair value of the remaining 600 shares of Tetts Co.'s stock was $85.35 per share. The fair value of the remaining 1,750 shares for Issaxson Co.'s stock was equal to its cost of 436.04 per share. Journalize the entry for this transactions.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education