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 5, Problem 5.1.4E
To determine
Concept Introduction:
Consolidation of accounts: When a company acquires significant influence in another company then that company is known as holding company. Holding company is needed to consolidate its accounts with the subsidiary.
To choose: The correct option.
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Please Assist in this question (a) During the current period SP Ltd sold inventory to its wholly owned subsidiary, Jaza Ltd, for $15 000. These items previously cost Sp Ltd $12 000. JazaLtd subsequently sold half the items to Nanjing Ltd for $8000. The tax rate is 30%. The group accountant for SP Ltd, Steve yu, maintains that the appropriate consolidation adjustment entries are as follows: Required (i) Discuss whether the entries suggested Steve Yu are correct, explaining on a line-by-line basis the correct adjustment entry. (ii)Determine the consolidation worksheet entries in the following year, assuming the inventory has been –sold, and explain the adjustments on a line-by-line basis. (b) On 1 July 2016 Henna Ltd sold an item of plant to Jordy Ltd for $450000 when its’ carrying value in Henna Ltd book was $600000 (costs $900000, accumulated depreciation $300000). This plant has a remaining useful life of five (5) years form the date of sale. The group measures its property plants and…
How does joint control differ from control as
applied on consolidation?
Oceania Limited acquired 100% of the share
capital of Broadwater Limited. Broadwater had
total shareholder's equity of $500 000. The book
values of Broadwater Limited's assets were:
buildings $30o 000, machinery $180 000. The fair
values of these assets were: buildings $360 000,
machinery $200 000. The tax rate is 30%. The fair
value of the identifiable net assets is:
a. $580 000 b. $420 000 c. $556 000 d. $444 444
P Ltd acquired 80% of S Ltd and 30% of A Ltd in June 20x7. For the year
ended 31 December 20x8, S Ltd reported "Profit after tax $100 million"
and A Ltd reported "Profit after tax $50 million". There were no purchase
price allocation issues and no intragroup transactions. The 20x8
consolidation adjusting entries for the profit after tax should be:
S Ltd: Dr Non-controlling interest (CPL) $20 million, Cr Non-controlling interest
(CBS) $20 million
A Ltd: Dr Cash $15 million, Cr Dividend income $15 million
S Ltd: Dr Non-controlling interest (CPL) $20 million, Cr Non-controlling interest
(CBS) $20 million
A Ltd: Dr Investment in associate $15 million, Cr Share of associate's profit $15
million
O None of the listed choices.
S Ltd: Dr Cash $80 million, Cr Dividend income $80 million
A Ltd: Dr Cash $15 million, Cr Dividend income $15 million
S Ltd: Dr Cash $80 million, Cr Dividend income $80 million
A Ltd: Dr Investment in associate $15 million, Cr Share of associate's profit $15
million
Chapter 5 Solutions
Advanced Financial Accounting
Ch. 5 - Where is the balance assigned to the...Ch. 5 - Why must a noncontrolling interest be reported in...Ch. 5 - Prob. 5.3QCh. 5 - Prob. 5.4QCh. 5 - Prob. 5.5QCh. 5 - Prob. 5.6QCh. 5 - Prob. 5.7QCh. 5 - Prob. 5.8QCh. 5 - Prob. 5.9QCh. 5 - Prob. 5.10Q
Ch. 5 - Under what Circumstances would a parent company...Ch. 5 - Prob. 5.12QCh. 5 - Prob. 5.13QCh. 5 - Prob. 5.14AQCh. 5 - Prob. 5.15AQCh. 5 - Consolidation Worksheet Preparation The newest...Ch. 5 - Prob. 5.2CCh. 5 - Prob. 5.3CCh. 5 - Prob. 5.4CCh. 5 - Prob. 5.5CCh. 5 - Prob. 5.1.1ECh. 5 - Prob. 5.1.2ECh. 5 - Prob. 5.1.3ECh. 5 - Prob. 5.1.4ECh. 5 - Prob. 5.2.1ECh. 5 - Prob. 5.2.2ECh. 5 - Prob. 5.2.3ECh. 5 - Prob. 5.2.4ECh. 5 - Prob. 5.2.5ECh. 5 - Prob. 5.3ECh. 5 - Prob. 5.4ECh. 5 - Balance Sheet Worksheet Problem Company owns 90...Ch. 5 - Prob. 5.6ECh. 5 - Prob. 5.7ECh. 5 - Prob. 5.8.1ECh. 5 - Prob. 5.8.2ECh. 5 - Prob. 5.8.3ECh. 5 - Prob. 5.8.4ECh. 5 - Prob. 5.8.5ECh. 5 - Prob. 5.8.6ECh. 5 - Prob. 5.8.7ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10ECh. 5 - Prob. 5.11ECh. 5 - Prob. 5.12ECh. 5 - Prob. 5.13ECh. 5 - Prob. 5.14ECh. 5 - Prob. 5.15ECh. 5 - Prob. 5.16ECh. 5 - Prob. 5.17AECh. 5 - Prob. 5.18AECh. 5 - Prob. 5.19PCh. 5 - Prob. 5.20PCh. 5 - Prob. 5.21.1PCh. 5 - Multiple-Choice Questions on Applying the Equity...Ch. 5 - Prob. 5.21.3PCh. 5 - Prob. 5.21.4PCh. 5 - Prob. 5.22PCh. 5 - Computation of Account Balances Pencil Company...Ch. 5 - Prob. 5.24PCh. 5 - Equity Entries with Differential On January 1,...Ch. 5 - Equity Entries with Differential Plug Corporation...Ch. 5 - Prob. 5.27PCh. 5 - Prob. 5.28PCh. 5 - Prob. 5.29P
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