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15) On January 1, 2014, 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, 2014, Savy purchased a 10% interest in Klode for $50,000 when Klode's total stockholders' equity was $500,000; with.
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9) Johnsen Corporation paid $225,000 for a 70% interest in Jonas Corporation on January 1, 2014. 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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13) Sandy Corporation's stockholders' equity on December 31, 2014 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, 2015, Bombard Corporation paid $200,000 for a 90% interest in Sandy's common stock..
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12) On December 15, 2014, Electronix Company purchased inventory from a foreign supplier for 2,000,000 foreign currency units (fcu's). Payment will be made on February 13, 2012. On December 15, 2014, to hedge the transaction, Electronix signed a forward contract to buy 2,000,000 fcu's in 60 days. Electronix uses a.
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5) Pancino Corporation owns a 90% interest in Sakal Corporation's common stock. Throughout 2014, 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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16) On January 1, 2014, 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, 2014, Satorius Company purchased a 10% interest in Paul Company for $90,000 when Paul's total stockholders' equity was.
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14) The table below provides either a direct or indirect quote for a given foreign currency unit, and the related units of that foreign currency. Quote Foreign Currency Units U.S. Dollars 1 fcu : $0.0065 40,000 fcu $1 : .0098 fcu 980 fcu 1 fcu : $0.0796 80,000 fcu $1 : .0688 fcu 55,040 fcu 1 fcu : $0.3597 110,000 fcu $1 : .8443.
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11.2   Exercises 1) On July 1, 2013, Parslow Corporation acquired a 75% interest in Sanderson Corporation for $150,000. Sanderson's net assets on this date had a book value of $140,000 and a fair value of $160,000. The excess of fair value over book value at acquisition was due to understated plant.
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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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11) On January 1, 2014, Penny Company acquired a 90% interest in Lampire Company for $180,000 cash. On January 1, 2014, Lampire Company had the following assets and liabilities: Book ValueFair Value Cash$10,000$10,000 Accounts Receivable30,00035,000 Inventory40,00050,000 Plant Assets60,00080,000 Total Assets$140,000$175,000 Liabilities$25,000$25,000 Capital Stock100,000 Retained Earnings15,000 Total Liabilities & Stockholders' Equity$140,000 Push-down accounting is used for the acquisition. Required: 1. Assume both companies use the.
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13.1   Multiple Choice Questions 1) Which of the following hedging strategies would a business most likely use? A) An importer will want to hedge his foreign denominated accounts receivable and will purchase forward contracts to hedge an exposed net asset position. B) An importer will want to hedge his foreign denominated accounts payable.
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3) Samford Corporation's stockholders' equity on December 31, 2014 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, 2015, Panera Corporation purchased a 70% interest in Samford's common stock for $1,400,000..
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7) Parker Corporation owns an 80% interest in Sample Corporation's common stock. Throughout 2014, 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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20) Meric Corporation (a U.S. company) began operations on January 1, 2014, when the owner borrowed $150,000 to start the company. In the first month of operations, Meric had the following transactions: January 3, 2014Bought inventory for 100,000 Brazilian real on account. Must be paid with Brazilian               real January 8, 2014Sold.
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10.2   Exercises 1) Saito Corporation's stockholders' equity on December 31, 2014 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, 2015, Panata Corporation paid $300,000 for a 70% interest in Saito's common.
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3) Pashley Corporation purchased 75% of Sargent Corporation on January 1, 2014, 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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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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15) Pretax operating incomes of Pang Corporation and its 70%-owned subsidiary, Sala Corporation, for the year 2014, are shown below. Sala pays total dividends of $60,000 for the year. There are no unamortized book value/fair value differentials relating to Pang's investment in Sala. During the year, Pang sold land to.
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8) Peyton Corporation owns an 80% interest in Sampe Corporation's common stock. Throughout 2014, 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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10.1   Multiple Choice Questions Use the following information to answer the question(s) below. On December 31, 2013, 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, 2013, Sanchez's stockholders' equity was as follows: 10% preferred stock, cumulative, $10.
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5) On November 1, 2013, Mayberry Corporation, a U.S. corporation, purchased from Cantata Corporation, a Mexican company, some machinery that cost 1,000,000 pesos. The invoice was payable in pesos on January 30, 2014. To hedge against rapid changes in the peso, Mayberry entered into a forward contract on November 1,.
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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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14) Stello Corporation's stockholders' equity on December 31, 2014 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, 2015, Kaprelian Corporation paid $300,000 for a 90% interest in Stello's common stock. On.
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6) Partridge Corporation purchased an 80% interest in Sandy Corporation for $840,000 on January 1, 2014. Sandy's balance sheet book values and accompanying fair values on this date are shown below. Parent 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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13.2   Exercises 1) On November 1, 2014, Portsmith Corporation, a calendar-year U.S. corporation, invested in a purely speculative contract to purchase 1 million yen on January 30, 2015, from the Karoke Trading Company, a Japanese brokerage firm. Portsmith agreed to purchase 1,000,000 yen from Karoke at a fixed price of $0.0100.
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13) On January 1, 2014, Jeff Company acquired a 90% interest in Marian Company for $198,000 cash. On January 1, 2014, Marian 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.
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10) Paradise Corporation owns 100% of Aldred Corporation, 90% of Balme Corporation, 80% of Calder Corporation, 75% of Dale Corporation, 20% of East Corporation, and 8% of Faber Corporation. Paradise, Aldred, Balme and Calder belong to an affiliated group. All of these corporations are domestic corporations. During 2014, Paradise Corporation.
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12) Jeff Corporation owns 90% of the common stock of Subsidiary Jordan. The following data is available: JeffJordan Net income for 2014$250,000$150,000 Preferred dividends for 2014$20,000 Common dividends for 2014$25,000 Number of common shares outstanding 200,00020,000 10% Preferred Stock, $100 par$200,000 The preferred stock is cumulative and convertible. The annual preferred dividends are $20,000. Required: 1. Jordan's preferred stock.
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7) On November 1, 2013, Stateside Company (a U.S. manufacturer) sold an airplane for 1 million New Zealand dollars (NZ$) to New Zealand company Aukland Corporation. Stateside will receive payment on January 30, 2014 in New Zealand dollars. In order to hedge the accounts receivable position, Stateside entered into a.
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12) Lincoln Corporation, a U.S. manufacturer, both imports needed materials and exports finished products. Their receivables and payables are listed below, prior to year-end adjustments or preparation of the closing entries. Foreign Currency Units Rate at Date of Transaction Per Books in U.S. Dollars Current Rate at 12/31/14 ACCOUNTS RECEIVABLE Japanese yen 14,678,000 $0.0109007 160,000 $0.0120 Euros 50,000 1.2372 61,860 1.4235 Hungarian forint 50,000,000 0.0044 220,000 0.0053   TOTAL 441,860 ACCOUNTS PAYABLE Euros 50,000 1.2378 61,890 $1.4235 Mexican pesos 1,250,000 0.0799 99,875 0.0845 Indian.
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Exercises 1) On September 1, 2014, Bylin Company purchased merchandise from Himeji Company of Japan for 20,000,000 yen payable on October 1, 2014. The spot rate for yen was $0.0079 on September 1 and the spot rate was $0.0077 on October 1. The purchase was paid on October 1, 2014. Required: 1. Did.
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18) Plymouth Corporation (a U.S. company) began operations on September 1, 2014, when the owner borrowed $250,000 to establish the business. Plymouth then had the following import and export transactions with unaffiliated Chinese companies: September 6, 2014Bought material inventory for 100,000 yuan on account. Invoice denominated in               yuan September 18, 2014Sold.
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11) Piel Corporation (a U.S. company) began operations on January 1, 2015, when common stock was issued for $250,000. In the first two months of operations, Piel had the following transactions: January 15, 2015Bought inventory for 100,000 Mexican pesos on account January 26, 2015Sold 70% of inventory acquired on 1/15/15 for 44,000.
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11) Wild West, Incorporated (a U.S. corporation) sold inventory to a company in the Philippines for 1,600,000 pesos on account on February 1, 2014, with payment expected in 90 days. Wild West entered into a forward contract to hedge this transaction, and properly accounts for the transaction as a cash.
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12.1   Multiple Choice Questions 1) On May 1, 2014, 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.
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15) On January 1, 2014, Brody Company acquired an 80% interest in Kristin Company for $240,000 cash. On January 1, 2014, Kristin Company had the following assets and liabilities: Book ValueFair Value Cash$10,000$10,000 Accounts Receivable50,00050,000 Inventory50,00070,000 Plant Assets100,000100,000 Total Assets$210,000$230,000 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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11.1   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, 2014. 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.
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7) Party Corporation acquired an 80% interest in Sang Corporation on January 1, 2014 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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