Assume Large Corporation Invested $ 600,000 for Small Corporation and the estimated Fair Market Values of Assets,
Question:
- Assume Large Corporation Invested $ 600,000 for Small Corporation and the estimated Fair Market Values of Assets, Liabilities and Equity Accounts are as follows:
Assets | Amount $ | Liabilities | Amount $ |
Account Receivable Inventory LT Marketable Securities PP & E | 125,000 50,000 55,000 170,000 400,000 | Account Payables Retained Earnings Commons Stock | 180,000 120,000 100,000 400,000 |
Required: (2+3 Marks)
a.Determine the Amount of Goodwill or Bargain Purchase.
b.What is the Journal Entry in the book of Large Corporation?
2.From the following Table pass Basic Elimination Entry under Equity Method in the book of Parent Company: (5 Marks)
Total Book Value | = Common Stock | + Additional Paid in Capital | + Retained Earnings | |
Beginning Book Value + Net Income
| 600 200 (50) | 150 | 550 | (100) 200 (50) |
Ending Book Value | 750 | 150 | 550 | 50 |
3.Consolidated financial statements present the financial position and results of operations for controlling entity and one or more controlled entities. 'Consolidated Financial Statement has some advantages but at the same time it is not free from limitations.' Elaborate this statement. (5 Marks)
Canadian Income Taxation Planning And Decision Making
ISBN: 9781259094330
17th Edition 2014-2015 Version
Authors: Joan Kitunen, William Buckwold