Master of the Universe
Saturn Inc. (Saturn) and Venus Inc. (Venus), two unrelated parties, form Jupiter, a
joint venture. Saturn owns 51 percent of Jupiter and Venus owns 49 percent of Jupiter.
The purpose of Jupiter is to own and operate organi
1. Parent purchased Subsidiary on January 1, 2014. The excess of investment cost over book value
of $210,000 was allocated entirely to a 10-year royalty agreement.
Subsidiary regularly sells merchandise to Parent. In 2015, inter-company sales amounted to
Fargus Corporation owned 51% of the voting common stock of Sanatee, Inc. The parent's interest was
acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with
On January 1, 2013, Musial Corp. sold equipment to Matin Inc. (a wholly-owned subsidiary) for
$168,000 in cash. The equipment originally cost $140,000 but had a book value of only $98,000 when
transferred. On that date, the equipment had a five-year remai
POW for Chapter 1ib
1. Charlie Co. owns 30% of the voting common stock of Turf Services Inc. Charlie uses the equity
method to account for its investment. On January 1, 2013, the balance in the investment account was
$624,000. During 2013, Turf Services r
Matthews Co. acquired all of the common stock of Jackson Co. on January 1, 2012. As of that date,
Jackson had the following trial balance:
Additional paid -in capital
On January 1, 2014, Jannison Inc. acquired 90% of Techron Co. by paying $477,000 cash. There is no
active trading market for Techron stock. Techron Co. reported a Common Stock account balance of
$140,000 and Retained Earnings of $280,000 at that dat
The following are preliminary financial statements for Black Co. and Blue Co. for the year ending
December 31, 2013.
Retained earnings, January 1, 2013
ADVANCED FINANCIAL REPORTING
The exam is due by 5 PM on Thursday, February 25, 2016.
You may type your answers in Word or Excel or assemble neatly handwritten
pages into a single document. The document must be stapled with
Information for Problems 1 and 2:
Several years ago Polar Inc. acquired an 80% interest in Icecap Co. The book values of Icecap's asset and
liability accounts at that time were considered to be equal to their fair values. Polars acquisition value