Chap004_class

Chap004_class - 4-1 Chapter 4 Consolidation Date of...

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
4-1 Chapter 4 Consolidation - Date of Acquisition • 100% ownership – no minority interest • consolidation worksheet – Ex 4-7, 4-8 • Elimination Entries 1 and 2
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
4-2 Consolidated Statements • separate legal entities but only ONE reporting entity – Group of corporations under common control clude only transactions with external Include only transactions with external parties liminate inter mpany transactions – Eliminate inter-company transactions
Background image of page 2
4-3 Consolidated Statements • prepared for reporting purposes only – There are no consolidated journals or ledgers – Must start with separate company adjusted trial l h balances each year ust repeat elimination entries each year – Must repeat elimination entries each year
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
4-4 Balance Sheets Before Combination Assets Cash $ 350,000 $ 50,000 ccounts Receivable 5,000 0,000 Peerless Special Foods Accounts Receivable 75,000 50,000 Inventory 100,000 60,000 Land 175,000 40,000 ildi d E i t 00 000 00 000 Buildings and Equipment 800,000 600,000 Accumulated Depreciation (400,000 (300,000 Total Assets $1,100,000 $500,000 ) ) Liabilities and Stockholders’ Equity Accounts Payable $ 100,000 $100,000 onds Payable 00,000 00,000 Bonds Payable 200,000 100,000 Common Stock 500,000 200,000 Retained Earnings 300,000 100,000 otal Liabilities and Stockholders’ Equity 1 100 000 500 000 Total Liabilities and Stockholders’ Equity $1,100,000 $500,000
Background image of page 4
4-5 Full Ownership Purchased at Book Value Investment cost $300,000 ook Value of Equity Acquired: P Book Value of Equity Acquired: Common stock--Special Foods Retained earnings--Special Foods 100% Differential S January 1, 20X1 entry:
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
4-6 Full Ownership Purchased at Book Value Investment cost $300,000 ook Value of Equity Acquired: P Book Value of Equity Acquired: Common stock--Special Foods $200,000 Retained earnings--Special Foods 100,000 100% $300,000 Total Differential S January 1, 20X1 entry:
Background image of page 6
4-7 Full Ownership Purchased at Book Value Investment cost $300,000 ook Value of Equity Acquired: P Book Value of Equity Acquired: Common stock--Special Foods $200,000 Retained earnings--Special Foods 100,000 100% $300,000 Total (300,000 ) Differential $ -0- S January 1, 20X1 entry: Investment in Special Foods Stock 300,000 Cash 300,000 (Regular JE to record purchase of Special Foods stock.)
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
4-8 Balance Sheets After Combination Assets Cash $ 50,000 $ 50,000 ccounts Receivable 5 000 0 000 Peerless Special Foods Accounts Receivable 75,000 50,000 Inventory 100,000 60,000 Land 175,000 40,000 Buildings and Equipment 800,000 600,000 Accumulated Depreciation (400,000 (300,000 Investment in Special Foods Stock 300,000 ) ) Total Assets $1,100,000 $500,000 Liabilities and Stockholders’ Equity ccounts Payable 100 000 100 000 Accounts Payable $ 100,000 $100,000 Bonds Payable 200,000 100,000 Common Stock 500,000 200,000 Retained Earnings 300,000 100,000 Total Liabilities and Stockholders’ Equity $1,100,000 $500,000
Background image of page 8
4-9 100% Purchase at Book Value Trial Balance Data Elimination Entries Account Titles Peerless Spec. Foods Debits Credits Consolidated Cash 50,000 50,000 100,000 Accounts Rec. 75,000 50,000 125,000 ventory 00,000 0,000 60,000 Inventory 100,000 60,000 160,000 Land 175,000 40,000 215,000 Bldg. and Equip. 800,000 600,000 1,400,000 Inv. in Sp. Foods 300,000 Total Debits 1,500,000 800,000 2,000,000 Accum. Depr. 400,000 300,000 700,000 Accounts Payable 100,000 100,000 200,000 Bonds Payable 200,000 100,000 300,000 Common Stock 500,000 200,000 500,000 etained Earn 00 000 00 000 00 000 Retained Earn. 300,000 100,000 300,000 Total Credits 1,500,000 800,000 2,000,000
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
4-10 10 Elimination Entry (1) No Differential ommon stock (subsidiary) xx Common stock (subsidiary) Additional PIC (subsidiary) xx Balances on ub’s Books
Background image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/01/2010 for the course MGMT 503 taught by Professor Staff during the Spring '08 term at Purdue.

Page1 / 35

Chap004_class - 4-1 Chapter 4 Consolidation Date of...

This preview shows document pages 1 - 11. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online