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Study Resources (Accounting)

3) At December 31, 2010, the stockholders' equity of Pearson Corporation and its 80%-owned subsidiary, Trompeter Corporation, are as follows: PearsonTrompeter Common stock, $10 par value$20,000$12,000 Retained earnings8,0006,000 Totals$28,000$18,000 Pearson's Investment in Trompeter is equal to 80 percent of Trompeter's book value. Trompeter Corporation issued 400 additional shares of common stock directly to Pearson on.
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11) On September 1, 2011, Beck Corporation acquired an 80% interest in Johnsen Corporation for $700,000. Johnsen's stockholders' equity at January 1, 2011 consisted of $200,000 of Common Stock and $600,000 of Retained Earnings. The book values of its assets and liabilities were equal to their respective fair values on.
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8) Peyton Corporation owns an 80% interest in Sampe Corporation's common stock. Throughout 2011, Sampe had 10,000 shares of common stock outstanding and Peyton had 100,000 shares of common stock outstanding. Sampe's only dilutive security consists of $100,000 face amount of 8% bonds payable. Each $1,000 bond is convertible into.
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15) On December 31, 2011, Dixie Corporation has the following information available: Common stock, $10 par$200,000 Additional paid-in capital60,000 Retained earnings40,000 Total stockholders' equity$300,000 On December 31, 2011, Grimsled Corporation buys an 80% interest in Dixie Corporation for $240,000. On December 31, 2011, the fair value of Dixie's assets and liabilities are equal to the.
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Exercises 1) At December 31, 2010, the stockholders' equity of Gost Corporation and its 80%-owned subsidiary, Tree Corporation, are as follows:     Gost       Tree Common stock, $10 par value$20,000$12,000 Retained earnings8,0006,000 Totals$28,000$18,000 Gost's Investment in Tree is equal to 80 percent of Tree's book value. Tree Corporation issued 225 additional shares of common stock directly.
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11) The SEC requires push-down accounting for SEC filings of subsidiaries when the subsidiary has no substantial publicly-held debt or preferred stock outstanding and A) the parent has substantial ownership (5% or greater). B) the parent has substantial ownership (20% or greater). C) the parent has substantial ownership (50% or greater). D) the parent.
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8) Pascal Corporation paid $225,000 for a 70% interest in Sank Corporation on January 1, 2011. On that date, Sank's balance sheet accounts, at book value and fair value, were as follows: Book ValueFair Value Assets Cash$25,000$25,000 Accounts receivable-net45,00055,000 Inventories40,00060,000 Plant, property and equipment-net140,000125,000 Total assets$250,000$265,000 Equities Accounts payable$40,000$40,000 Common stock120,000 Retained earnings90,000 Total liab. & equity$250,000   Both companies use the parent company.
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9) Padhy Corporation owns 80% of Abrams Corporation, Abrams Corporation owns 60% of Bacud Corporation, and Bacud Corporation owns 10% of Abrams Corporation. The separate net incomes (excluding investment income) of Padhy, Abrams, and Bacud are $300,000, $100,000, and $80,000, respectively. Assume the investments were acquired at a cost equal.
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14) On January 1, 2011, Jennifer Company acquired a 90% interest in Jayda Company for $270,000 cash. On January 1, 2011, Jayda Company had the following assets and liabilities: Book ValueFair Value Cash$10,000$10,000 Accounts Receivable50,00070,000 Inventory50,00080,000 Plant Assets100,000200,000 Total Assets$210,000$360,000 Liabilities$100,000$120,000 Capital Stock100,000 Retained Earnings10,000 Total Liabilities & Stockholders' Equity$210,000 Push-down accounting is used for the acquisition. Both companies use the entity.
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Multiple Choice Questions 1) On May 1, 2011, Deerfield Corporation purchased merchandise from a German firm for 78,000 euros when the spot rate for the euro was 1.48 euro per dollar. The account payable was denominated in the euro. Deerfield settled the account on August 1 when the spot rate for.
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16) On December 31, 2011, Lorna Corporation has the following information available: Common stock, $10 par$200,000 Additional paid-in capital60,000 Retained earnings40,000 Total stockholders' equity$300,000 On December 31, 2011, Gerald Corporation buys an 80% interest in Lorna Corporation for $240,000. On December 31, 2011, the fair value of Lorna's assets and liabilities are equal to the.
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2) Partel Corporation purchased 75% of Sandford Corporation on January 1, 2011, for $230,000. Balance sheets for the two companies on this date, prepared just prior to the purchase, are provided below. PartelSandfordSandford Book ValuesBook ValuesFair Values Cash$330,000$10,000$10,000 Inventory270,00070,00090,000 Buildings & equipment-net500,000120,000190,000 Total assets$1,100,000$200,000$290,000 Common stock$300,00095,000 Retained earnings800,000105,000 Total equities$1,100,000$200,000 Required: 1. Prepare a consolidated balance sheet using the entity.
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17) On December 31, 2011, Maria Corporation has the following stockholders' equity: Common stock, $10 par$100,000 Additional paid-in capital20,000 Retained earnings80,000 Total stockholders' equity$200,000 On January 1, 2012, Maria Corporation declared and issued a 10% stock dividend when the market price per share was $50. On January 2, 2012, James Corporation purchased an 80% interest in.
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15) On January 1, 2011, Klode Corporation acquired an 80% interest in Savy Company for $400,000 when Savy's stockholders' equity was $500,000; with Common stock $400,000 and Retained earnings $100,000. On January 1, 2011, Savy purchased a 10% interest in Klode for $50,000 when Klode's total stockholders' equity was $500,000; with.
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Multiple Choice Questions Use the following information to answer the question(s) below. Pasfield Corporation acquired a 90% interest in Santini Corporation for $90,000 cash on January 1, 2011. The following information is available for Santini at that time. Book ValueFair ValueDifference Current assets$40,000$50,000$10,000 Plant assets60,00075,00015,000 Liabilities(50,000)(50,000)0 Net assets$50,000$75,000 1) Under the entity theory, a consolidated balance sheet prepared.
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3) Samford Corporation's stockholders' equity on December 31, 2010 was as follows: 8% cumulative preferred stock, $100 par value, callable at $109, with two years of dividends in arrears$100,000 Common stock, $25 par value700,000 Additional paid-in capital250,000 Retained earnings400,000 Total stockholders' equity$1,450,000 On January 1, 2011, Panera Corporation purchased a 70% interest in Samford's common stock for $1,400,000..
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Exercises 1) Saito Corporation's stockholders' equity on December 31, 2010 was as follows: 10% cumulative preferred stock, $100 par value, callable at $105, with one year dividends in arrears$10,000 Common stock, $1 par value50,000 Additional paid-in capital150,000 Retained earnings160,000 Total stockholders' equity$370,000 On January 1, 2011, Panata Corporation paid $300,000 for a 70% interest in Saito's common stock..
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5) Pancino Corporation owns a 90% interest in Sakal Corporation's common stock. Throughout 2010, Sakal had 20,000 shares of common stock outstanding and Pancino had 50,000 shares of common stock outstanding. Sakal's only dilutive security consists of 2,500 stock options, with an exercise price of $20 per share. The average.
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7) Paine Corporation owns 90% of Achan Corporation, Achan Corporation owns 85% of Badge Corporation, and Badge Corporation owns 5% of Achan Corporation. The separate net incomes (excluding investment income) of Paine, Achan, and Badge are $400,000, $160,000, and $220,000, respectively. Assume the investments were acquired at a cost equal.
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6) Pandy Corporation owns a 90% interest in Sakaj Corporation's common stock. Throughout 2010, Sakaj had 20,000 shares of common stock outstanding and Pandy had 50,000 shares of common stock outstanding. Sakaj's only dilutive security consists of 10,000 stock options, with an exercise price of $20 per share. The average.
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11) Assume a company's preferred stock is cumulative with a call provision and has dividends in arrears. The amount of stockholders' equity allocated to preferred stockholders is equal to the number of shares outstanding times the A) sum of the par value per share plus any liquidation premium per share, plus.
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16) Pretax operating incomes of Panitz Corporation and its 80%-owned subsidiary, Salazar Corporation, for the year 2011, are shown below. Panitz and Salazar belong to an affiliated group. Salazar pays total dividends of $35,000 for the year. There are no unamortized book value/fair value differentials relating to Panitz's investment in Salazar..
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3) Pashley Corporation purchased 75% of Sargent Corporation on January 1, 2011, for $115,000. Balance sheets for the two companies on this date, prepared just prior to the purchase, are provided below. PashleySargentSargent Book ValuesBook ValuesFair Values Cash$165,000$5,000$5,000 Inventory135,00035,00045,000 Buildings & equipment-net250,00060,00095,000 Total assets$550,000$100,000$145,000 Common stock$150,000$47,500 Retained earnings400,00052,500 Total equities$550,000$100,000 Required: Prepare a consolidated balance sheet using the entity theory of.
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6) Partridge Corporation purchased an 80% interest in Sandy Corporation for $840,000 on January 1, 2011. Sandy's balance sheet book values and accompanying fair values on this date are shown below. Entity Company TheoryTheory Push-Push- Down Down BookFairBalanceBalance   Value     Value     Sheet       Sheet   Cash$30,000$30,000________________ Receivables200,000200,000________________ Inventory300,000360,000________________ Land50,00090,000________________ Plant assets-net250,000300,000________________ Total Assets$830,000$980,000________________ Current liabilities$180,000$180,000________________ Other liabilities120,000100,000________________ Common Stock400,000________________ Retained Earnings130,000________________________ Total Liab. &.
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Multiple Choice Questions 1) Pallet Corporation owns 80% of Adelt Corporation and Adelt owns 60% of Bajo Inc. Which of the following is correct? A) Bajo should not be consolidated because noncontrolling interests hold 52%. B) Bajo should be consolidated because the 60% of Bajo stock is held in the affiliate structure. C) Pallet.
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10) Patch Corporation has a 50% undivided interest in Saric Corporation, a joint venture. Patch accounts for its interest in Saric by the equity method and also prepares consolidated financial statements for external reporting purposes. Patch follows specialized industry practices and uses proportionate consolidation for its interest in Saric. Separate.
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7) Party Corporation acquired an 80% interest in Sang Corporation on January 1, 2011 for $20,000. Balance sheet and fair value information on this date is summarized as follows: Party Book ValueSang Book ValueSang Fair Value Current assets$15,000$9,000$9,000 Land and Building-net35,0007,0007,000 Equipment8,0004,0006,000 Total assets$58,000$20,000$22,000 Liabilities$27,000$10,00010,000 Capital stock18,0004,000 Retained earnings13,0006,000 Total liab. & equity$58,000$20,000 Required: 1. Prepare an entry on the books.
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14) Stello Corporation's stockholders' equity on December 31, 2010 was as follows: 10% cumulative preferred stock, $100 par value, callable at $110, with no dividends in arrears$100,000 Common stock, $1 par value300,000 Additional paid-in capital40,000 Retained earnings160,000 Total stockholders' equity$600,000 On January 1, 2011, Kaprelian Corporation paid $300,000 for a 90% interest in Stello's common stock. On.
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12) On January 1, 2011, Jeff Company acquired a 90% interest in Margaret Company for $198,000 cash. On January 1, 2011, Margaret Company had the following assets and liabilities: Book ValueFair Value Cash$5,000$5,000 Accounts Receivable30,00035,000 Inventory40,00050,000 Plant Assets60,00080,000 Total Assets$135,000$170,000 Liabilities$25,000$25,000 Capital Stock100,000 Retained Earnings10,000 Total Liabilities & Stockholders' Equity$135,000 Push-down accounting is used for the acquisition. Required: 1. Assume both companies use the.
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Exercises 1) Paice Corporation owns 80% of the voting common stock of Accardi Corporation. Paice owns 60% of the voting common stock of Badger Corporation. Accardi owns 20% of the voting common stock of Badger. There are no cost/book value/fair value differentials to consider. The separate net incomes (excluding investment income).
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Multiple Choice Questions Use the following information to answer the question(s) below. On December 31, 2010, Parminter Corporation owns an 80% interest in the common stock of Sanchez Corporation and an 80% interest in Sanchez's preferred stock. On December 31, 2010, Sanchez's stockholders' equity was as follows: 10% preferred stock, cumulative, $10 par.
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13) At January 1, 2010, the stockholders' equity of Raven Corporation and its 60%-owned subsidiary, Trunk Corporation, are as follows: RavenTrunk Common stock, $10 par value$700,000$400,000 Retained earnings800,00050,000 Totals$1,500,000$450,000 Trunk's net income for 2010 was $40,000. No dividends were declared or paid in 2010. Raven's Investment in Trunk account balance on December 31, 2010 was.
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7) Parker Corporation owns an 80% interest in Sample Corporation's common stock. Throughout 2010, Sample had 10,000 shares of common stock outstanding and Parker had 100,000 shares of common stock outstanding. Sample's only dilutive security consists of $50,000 face amount of 8% bonds payable. Each $1,000 bond is convertible into.
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3) Paik Corporation owns 80% of Acdol Corporation and 60% of Ben Corporation. Acdol Corporation owns 10% of Ben Corporation. All subsidiary investments were acquired at book value. There are no fair value/book value differentials associated with each investment. Separate net incomes (excluding investment income) of the affiliated companies for.
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16) On January 1, 2011, Paul Corporation acquired a 90% interest in Satorius Company for $360,000 when Satorius' stockholders' equity was $400,000; with Common stock $200,000 and Retained earnings $200,000. On January 1, 2011, Satorius Company purchased a 10% interest in Paul Company for $90,000 when Paul's total stockholders' equity was.
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16) On January 1, 2011, Gregory Company acquired a 90% interest in Subway Company for $200,000 cash. On January 1, 2011, Subway Company had the following assets and liabilities: Book ValueFair Value Cash$5,000$5,000 Accounts Receivable30,00035,000 Inventory40,00050,000 Other Current Assets10,00010,000 Plant Assets60,00080,000 Total Assets$145,000$180,000 Liabilities$25,000$25,000 Common Stock100,000 Retained Earnings20,000 Total Liabilities & Stockholders' Equity$145,000 The plant assets have 20 years of useful life remaining..
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9) Johnsen Corporation paid $225,000 for a 70% interest in Jonas Corporation on January 1, 2011. On that date, Jonas's balance sheet accounts, at book value and fair value, were as follows: Book ValueFair Value Assets Cash$25,000$25,000 Accounts receivable-net45,00055,000 Inventories40,00060,000 Plant, property and equipment-net140,000125,000 Total assets$250,000$265,000 Equities Accounts payable$40,000$40,000 Common stock120,000 Retained earnings90,000 Total liab. & equity$250,000 Required: 1. Prepare the journal entry necessary.
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  Use the following information to answer the question(s) below. Pahm Corporation owns 80% of the outstanding voting common stock of Abussi Corporation, which was purchased for $60,000 over Abussi's book value. The excess purchase price was attributable to goodwill. Abussi Corporation owns 60% of the outstanding common stock of Badock Corporation,.
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13) Sandy Corporation's stockholders' equity on December 31, 2010 was as follows: 10% cumulative preferred stock, $100 par value, callable at $105, with one year dividends in arrears$100,000 Common stock, $1 par value200,000 Additional paid-in capital40,000 Retained earnings160,000 Total stockholders' equity$500,000 On January 1, 2011, Bombard Corporation paid $200,000 for a 90% interest in Sandy's common stock..
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9) Olson Corporation paid $62,000 to acquire 100% of Towing Corporation's outstanding voting common stock at book value on May 1, 2011. The stockholders' equity of Towing on January 1, 2011 consisted of $40,000 Capital Stock and $20,000 Retained Earnings. Towing's total dividends for 2011 were $6,000, paid equally on.
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7) At December 31, 2012 year-end, Arnold Corporation's investment in Oakes Inc. was $200,000 consisting of 80% of Oakes's $250,000 stockholders' equity on that date. On April 1, 2013, Arnold sold 20% interest (one-fourth of its holdings) in Oakes for $65,000. During 2013, Oakes had net income of $75,000 (earned.
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11) Peter Corporation owns 90% of the common stock of Subsidiary Subway. The following data is available: PeterSubway Net income for 2011$150,000$50,000 Preferred dividends for 2011$10,000 Common dividends for 2011$15,000 Number of common shares outstanding 200,00020,000 10% Preferred Stock, $100 par$100,000 The preferred stock is cumulative and convertible. The annual preferred dividends are $10,000. Required: 1. Subway's preferred stock.
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9) Pane Corporation owns 100% of Alder Corporation, 85% of Ball Corporation, 70% of Cake Corporation, 40% of Dash Corporation, and 10% of Eager Corporation. All of these corporations are domestic corporations. Pane, Alder and Ball belong to an affiliated group. Pane's marginal income tax rate is 35%. All investees.
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