ADMS4520 Midterm 2 Review November 2010

ADMS4520 Midterm 2 Review November 2010 - AP/ADMS 4520 Fall...

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AP/ADMS 4520 Fall 2010 Midterm 2 Review Midterm Exam is Sunday November 14, 2010 from 3pm to 6pm in room The second midterm exam will cover Chapter 5 to 7 inclusive of the Modern Advanced Accounting in Canada textbook - edition 6. The following are areas to focus on however students are responsible for all material. Theory Highlights - two choices a parent company has on how to account for it's investment in a subsidiary - cost and equity - pros and cons of cost method and equity method - cost method journal entries - equity method journal entries - non-controlling interest - impact of intercompany transactions - realized and unrealized profits -downstream and upstream profits Problem Highlights All questions assigned on week by week schedule for homework plus additional problems attached. Additional problem #1 Additional problem #2 Chapter 7 - problem 9 Chapter 7 - problem 2 Review calculations for Consolidated Net Income, Consolidated Retained Earnings, Non Controlling Interest on Balance Sheet, and how to prepare Consolidated Financial Statements. It is imperative that the students understand the concepts in Chapters 1 to 4 as Chapters 5, 6 and 7 are a continuation of this material. 1) Business Combinations
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Additional Problem 1 Balance Sheet House Ltd. Beacon Ltd. Assets 147,800 18,300 Inventory 30,000 14,000 Investment in Beacon Ltd 21,750 0 Total Assets 199,550 32,300 Liabilities 47,000 11,500 Common Stock 50,000 10,000 Retained Earnings (Jan) 85,000 6,000 Net Income 23,550 7,300 Dividends -6,000 102,550 -2500 10,800 Liabilities and Equity 199,550 32,300 Income Statement House Ltd. Beacon Ltd. Sales 50,000 30,000 Investment Income 5,250 0 Cost of Sales -26,500 -14,700 Expenses -5,200 -8,000 Net Income 23,550 7,300 House Ltd.. purchased 100% of Beacon Ltd. Co. on January 01, 2010 for $21,750. On that date, the Acquisition differential was determined to be $3,000 which was allocated as: $2,000 to the January 01 Inventory and $1,000 to Goodwill.
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  • Fall '10
  • KONG
  • Balance Sheet, Net Income, Generally Accepted Accounting Principles, unrealized profits, House Ltd..

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