Chapter 8 CONSOLIDATIONS — CHANGES IN OWNERSHIP INTERESTS Answers to Questions 1 Preacquisition earnings and dividends are the earnings and dividends applicable to an investment interest prior to its acquisition during an accounting period. Assume that P purchases an 80 percent interest in S on July 1, 2011 and that S has earnings of $100,000 between January 1 and July 1, 2011 and pays $50,000 dividends on May 1, 2011. In this case, preacquisition earnings and dividends are $100,000 and
Words: 8025 - Pages: 33
Chapter 8 CONSOLIDATIONS — CHANGES IN OWNERSHIP INTERESTS Answers to Questions 1 Preacquisition earnings and dividends are the earnings and dividends applicable to an investment interest prior to its acquisition during an accounting period. Assume that P purchases an 80 percent interest in S on July 1, 2011 and that S has earnings of $100,000 between January 1 and July 1, 2011 and pays $50,000 dividends on May 1, 2011. In this case, preacquisition earnings and dividends are $100,000 and $40,000
Words: 8458 - Pages: 34
CHAPTER 3 CONSOLIDATION SUBSEQUENT TO DATE OF ACQUISITION QUESTION SOLUTIONS 3-1. An 80 percent ownership requires the preparation of consolidated financial statements. Regardless of the method used to account for the investment on the parent’s financial records, the investment income or dividend income is replaced on the consolidated income statement by the subsidiary’s revenue and expense accounts. The equity method is required if the parent prepares separate financial statements. Search term
Words: 20856 - Pages: 84
statements Revised November 2013 Noncontrolling interests, combined financial statements, parent company financial statements and consolidating financial statements To our clients and other friends This Financial reporting developments (FRD) publication is primarily designed to help you understand financial reporting issues related to the accounting for noncontrolling interests. This publication also includes interpretive guidance on consolidation procedure and on the presentation of combined
Words: 57119 - Pages: 229
Consolidation-Date of Acquisition Chapter 4 • Consolidated statements bring together the operating results and financial position of two or more separate legal entities into a single set of statements for the economic entity as a whole. • To accomplish this, the consolidation process includes procedures that eliminate all effects of intercorporate ownership and intercompany transactions. 4-2 Consolidation As Of The Date Of Acquisition McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill
Words: 3116 - Pages: 13
EDITION ISBN: 978-1-61853-151-3 Bookstores & Faculty: to order this book, call 800-619-6473 or email customerservice@cambridgepub.com. Students: to order this book, please visit the book’s Website and order directly online. Printed in Canada. 10 9 8 7 6 5 4 3 2 1 PREFACE W elcome to Advanced Accounting. We wrote this book with two major objectives in mind. First, we seek to reflect the changing topical emphases and content in the advanced accounting course; coverage is completely updated
Words: 24336 - Pages: 98
Chapter 7 Consolidated Financial Statements - Ownership Patterns and Income Taxes Chapter Outline I. Indirect subsidiary control A. Control of subsidiary companies within a business combination is often of an indirect nature; one subsidiary possesses the stock of another rather than the parent having direct ownership. 1. These ownership patterns may be developed specifically to enhance control or for organizational purposes. 2. Such ownership patterns may also result
Words: 4034 - Pages: 17
knowledge and understanding of the financial reporting framework used by business enterprises as it relates to partnerships, variable interest entities, and parent and subsidiary companies. Specifically, you will learn the accounting procedures and reporting requirements for: partnership formation, operation, cessation and liquidation; the treatment of variable interest entities, and combining corporate entities; and the preparation of consolidated financial statements for domestic parents with domestic
Words: 1835 - Pages: 8
Possible Problem/Essay Topics Chapter 1 1) Determining amount of goodwill during an acquisition (problem that includes Figure 1-3 on page 19) * Components used in determining goodwill: * The fair value of the consideration given by the acquirer * The fair value of any interest in the acquiree already held by the acquirer * The fair value of the noncontrolling interest in the acquiree, if any * The total of these three amounts, all measured at the acquisition date
Words: 3818 - Pages: 16
Chapter 3 Consolidations – Subsequent to the Date of Acquisition Chapter Outline I. Consolidation — the Effects Created by the Passage of Time A. The present chapter examines the consolidation procedures that must be followed in subsequent periods whenever separate incorporation of the subsidiary is maintained. B. Purchase combinations will continue to require a different set of procedures than a pooling of interests because of allocations and
Words: 4065 - Pages: 17
