Course Hero Logo

The consolidation worksheet will only eliminate all

Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. This preview shows page 8 - 10 out of 12 pages.

The consolidation worksheet will only eliminate all of the Investment in Subsidiary account when theparent owns 100 percent of the subsidiary’s stock.TrueFalse
When the parent acquired 100 percent of the subsidiary’s stock for book value during the current period,consolidated net income is always the sum of the parent’s net income and the subsidiary’s net incomefor the entire reporting period.
PP Corporation acquired 70% of SS on January 1, 2019. At that date, SS had equipment (10-yearremaining life) with a market value and book value of P80,000 and P60,000 respectively. SS's income in2019 and 2020 were P15,000 and P22,000, respectively while dividends paid were P6,000 and P9,000,respectively. Parent accounts for the investment under the cost method. What amount of adjustment tothe investment account is necessary to convert the cost method investment account (and retainedearnings account) to the equity method balance at December 31, 2020 (or January 1, 2021)?
PP Incorporated acquires all of the outstanding stock of SS Company on January 1, 2019. On that date, SSowns only three assets and has no liabilities. Inventory: Book value - P40,000; Fair value - P50,000.Equipment (10 year life): Book value - P80,000; Fair value - P75,000. Building (20-year life): Book value -P200,000; Fair value - P300,000. If PP pays P450,000 in cash for SS, what amount would be representedas the subsidiary's Equipment in consolidation at December 31, 2021, assuming the book value at thatdate is still P80,000?
P75,000P70,000PP Incorporated acquires all of the outstanding stock of SS Company on January 1, 2019. On that date, SSowns only three assets and has no liabilities. Inventory: Book value - P40,000; Fair value - P50,000.Equipment (10 year life): Book value - P80,000; Fair value - P75,000. Building (20-year life): Book value -P200,000; Fair value - P300,000. If PP pays P450,000 in cash for SS, what allocation should be assigned tothe subsidiary's Equipment in preparing for consolidation at December 31, 2021, assuming the bookvalue at that date is still P80,000?P3,500P73,500P75,000P5,000

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 12 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Fall
Professor
N/A
Tags
Balance Sheet, Generally Accepted Accounting Principles, SS Company

Newly uploaded documents

Show More

Newly uploaded documents

Show More

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture