64 Chapter 2
(Estimated Time: 45 to 65 Minutes) Following are the account balances of Miller Company and
Richmond Company as of December 31. The fair values of Richmond Companys assets and
liabilities are also listed.
To illustrate the recording of an annual budget in the accounts of a general fund, assume
that the Town of Verdant Glen is June 205 adopted the following condensed annual
budget for its General Fund for the fiscal year ending June 30, 2006.
Journal Entries for the General Fund of the Town of Verdant Glen;
Estimated Other Financing Sources
Estimated Other Financing Uses
Budgetary Fund Balance
To record annual budget adopte
Guidelines for Revenue Recognition
Revenue Recognition Classified by Type of Transaction
Separate organizations tied together through common control
Financial statements which represent more than one corporation are
known as consolidated financial statements.
The company which exerts control is known as the parent.
Business Combination, Chapter 3,
Company X paid $800,000 cash for 100% (all) of the outstanding shares of Y Company.
Assume Ys net income is $100,000 and it declared and paid $40,000 cash dividends.
Y Corporations financial information at date of acquisit
Preliminary Data: Book value and Fair value
Company P purchased Company S
Buildings and equipment (net)
In - Process research and development
Common stock - $20par value
Chapter 10-PPE Kieso
ACCOUNTING FOR NONMONETARY EXCHANGES
NONMONETARY EXCHANGE FLOWCHART
EXCHANGE OF SIMILAR NONMONETARY ASSETS
(WITH AND WITHOUT BOOT)
SUMMARY OF COSTS SUBSEQUENT TO ACQUISITION
OF PROPERTY, PLANT, AND EQUIPMEN
Consolidation Worksheet ,Dec. 31, 2010
Cost of goods sold
EXAMPLE Gamble Company exchanges its delivery trucks and $100,000 for similar type delivery trucks fr Company. Relevant information on the date of exchange is as follows:
Gamble trucks Accumulated depreciation Book V