Questions and Answers of Fundamentals Of Advanced Accounting

Pritano Company acquired all the net assets of Succo Company on December 31, 2023, for $2,160,000 cash. The balance sheet of Succo Company immediately prior to the acquisition showed:As part of the
The following information is available for Toys “R” Us Stores from January 2013 through January 2017. In the last column, the median industry values are reported for Retail- Hobby, Toy, and Game
A balance sheet for Bran Company on June 30, 2020, the date Jim Brown was appointed trustee, is presented here:The following information concerning the period from June 30, 2020, to December 31,
For each case, state whether it is a business or an acquisition of assets. Then support your answer.Case 1:A warehousing company provides shipping and storage services to third parties. A consumer
Pace Company purchased 20,000 of the 25,000 shares of Saddler Corporation for $525,000. On January 3, 2024, the acquisition date, Saddler Corporation’s capital stock and retained earnings account
Perke Corporation purchased 80% of the stock of Superstition Company for $1,970,000 on January 1, 2025. On this date, the fair value of the assets and liabilities of Superstition Company was equal to
Allocation of Cost and Workpaper Entries at Date of Acquisition LO2 On January 1, 2025, Porter Company purchased an 80% interest in Salem Company for $260,000. On this date, Salem Company had common
Park Company acquires an 85% interest in Sunland Company on January 2, 2025. The resulting difference between book value and the value implied by the purchase price in the amount of $120,000 is
On January 1, 2024, Pueblo Corporation purchased a 75% interest in Sanchez Company for $900,000. A summary of Sanchez Company’s balance sheet at date of purchase follows:The equipment had an
On January 1, 2024, Packard Company purchased an 80% interest in Sage Company for $600,000. On this date Sage Company had common stock of $150,000 and retained earnings of $400,000. Sage Company’s
On January 1, 2023, Piper Company acquired an 80% interest in Sand Company for $2,276,000. At that time the capital stock and retained earnings of Sand Company were $1,800,000 and $700,000,
Pascal Corporation purchased 90% of the stock of Salzer Company for $2,070,000 on January 1, 2025. On this date, the fair value of the assets and liabilities of Salzer Company was equal to their book
On January 1, 2023, Porter Company purchased an 80% interest in the capital stock of Salem Company for $850,000. At that time, Salem Company had capital stock of $550,000 and retained earnings of
P Company owns 80% of the outstanding stock of S Company. During 2024, S Company reported net income of $525,000 and declared no dividends. At the end of the year, S Company’s inventory included
Peel Company owns 90% of the common stock of Seacore Company. Seacore Company sells merchandise to Peel Company at 20% above cost. During 2024 and 2025, such sales amounted to $436,000 and $532,000,
Pruitt Corporation owns 90% of the common stock of Sedbrook Company. The stock was purchased for $540,000 on January 1, 2022, when Sedbrook Company’s retained earnings were $100,000. Preclosing
Parsons Company acquired 90% of the outstanding common stock of Shea Company on June 30, 2024, for $426,000. On that date, Shea Company had retained earnings in the amount of $60,000, and the fair
Pitts Company owns 80% of the common stock of Shannon Company. The stock was purchased for $960,000 on January 1, 2022, when Shannon Company’s retained earnings were $675,000. On January 1, 2024,
On January 1, 2025, P Company acquired a 90% interest in S Company. During 2026, S Company sold merchandise to P Company at 25% above cost in the amount (selling price) of $225,000. At the end of the
On January 1, 2023, Price Company acquired an 80% interest in the common stock of Smith Company on the open market for $750,000, the book value at that date. On January 1, 2024, Price Company
Using the information presented in Problem 7-4, prepare a consolidated financial statements workpaper for the year ended December 31, 2025, using the trial balance format.Data from problem 4Prout
P Company owns 90% of the outstanding common stock of S Company. On January 1, 2025, S Company sold land to P Company for $600,000. S Company originally purchased the land for $400,000. On January 1,
Prout Company owns 80% of the common stock of Sexton Company. The stock was purchased for $1,600,000 on January 1, 2022, when Sexton Company’s retained earnings were $800,000. On January 1, 2024,
Patterson Company owns 80% of the outstanding common stock of Stevens Company. On June 30, 2023, land costing $500,000 is sold by one affiliate to the other for $800,000.Required:Prepare in general
Procter Company owns 90% of the outstanding stock of Silex Company. On January 1, 2024, Silex Company sold land to Procter Company for $350,000. Silex had originally purchased the land on June 30,
Powell Company owns 80% of the outstanding common stock of Sullivan Company. On June 30, 2024, Sullivan Company sold equipment to Powell Company for $500,000. The equipment cost Sullivan Company
On January 1, 2023, Phelps Company purchased an 85% interest in Sloane Company for $955,000 when the retained earnings of Sloane Company were $150,000. The difference between implied and book value
P Company owns 80% of the outstanding stock of S Company. The 2025 sales of S Company included revenue of $390,000 consisting of consulting services billed to P Company at cost plus 30%. P Company
Pierce Company acquired a 90% interest in Sanders Company on January 1, 2026, for $1,480,000. At this time, Sanders Company’s common stock and retained earnings balances were $1,000,000 and
During 2023, Pier One Company billed its 80% owned subsidiary, Scale Company, $700,000 for architectural services. The cost to Pier One Company of providing the services was $400,000 for salaries and
Prout Company owns 80% of the common stock of Sexton Company. The stock was purchased for $1,600,000 on January 1, 2022, when Sexton Company’s retained earnings were $800,000. On January 1, 2024,
Using the information presented in Problem 7- 10 prepare a consolidated financial statements workpaper for the year ended December 31, 2025, using the trial balance format.Data from problem 10Prout
Prout Company owns 80% of the common stock of Sexton Company. The stock was purchased for $1,600,000 on January 1, 2022, when Sexton Company’s retained earnings were $800,000. On January 1, 2024,
Trial balances for Porter Company and its subsidiary, Spitz Company, as of December 31, 2024, follow:Porter Company made the following open- market purchase and sale of Spitz Company common stock:
The accounts of Pyle Company and its subsidiary, Stern Company, are summarized below as of December 31, 2024:Pyle Company made the following open- market purchase and sale of Stern Company common
On January 1, 2024, Pace Company purchased 250,000 shares of common stock directly from its subsidiary, Sime Company, for $1.50 per share. Noncontrolling stockholders elected not to participate in
Use the data presented in Exercise 8- 2, but assume use of the complete or the partial equity method rather than the cost method.Required:A. Prepare the journal entries Papke Company will make on its
Use the data from Exercise 8- 1, but assume use of either the complete or the partial equity method rather than the cost method.Required:A. Prepare the journal entries Peck Company will make on its
Use the data provided in Exercise 8- 2.Required:A. Prepare the workpaper eliminating entries needed for a consolidated statements workpaper on December 31, 2024.B. Determine the amount of
Trial balances for Phan Company and its subsidiary Sato Company on December 31, 2023, are as follows:Sato Company issued 40,000 shares of stock on July 1, 2019, its date of incorporation. No other
Pryor Company acquired 51,000 shares of Spero Company’s common stock on January 1, 2023, for $408,000 when Spero Company had common stock ($5 par) of $300,000 and retained earnings of $200,000. On
Use the same data provided in Exercise 8- 6, with the exception that Pace Company purchased the additional shares from Sime Company on January 1, 2024, at a price of $1.30 per share rather than
On January 1, 2024, Plum Company purchased a 10% interest in Spivey Company by acquiring 30,000 shares of Spivey Company common stock for $122,100 (or $4.07 per share). At that time, Spivey Company
Trial balances for Phan Company and its subsidiary Sato Company on December 31, 2024, are as follows:Phan Company acquired its investment in Sato Company through open- market purchases of stock as
Trial balances for Phan Company and its subsidiary Sato Company on December 31, 2023, are as follows:Sato Company issued 40,000 shares of stock on July 1, 2019, its date of incorporation. No other
Trial balances for Phan Company and its subsidiary Sato Company on December 31, 2024, are as follows:Phan Company acquired its investment in Sato Company through open- market purchases of stock as
The following information is available for Claire’s Stores from January 2013 through January 2017. In the last column, the median industry values are reported for apparel and accessory stores.
On February 1, 2020, Clover Company filed a petition for reorganization under the bankruptcy statutes. The court approved the plan on September 1, 2020, including the following provisions:1.
On September 30, 2019, SRP Company filed a petition for reorganization with a bankruptcy court. The plan was approved by the court and all parties of interest on January 2, 2020, when SRP Company’s
The January 1, 2020, trial balance, the calendar- year 2020 budget, and the 2020 transactions of the City of Roseburg are presented here:Transactions of the City of Roseburg that affected the General
Pasquale Company is a manufacturer of oil drilling equipment located in Canada. The company is 90% owned by a U.S. parent company. The accounting department of Pasquale Company accumulated the
Prost Company has filed a bankruptcy petition. Its account balances at December 31, 2020, are presented here:The following additional information is available:1. All notes receivable with the
The accounts of Pyle Company and its subsidiary, Stern Company, are summarized below as of December 31, 2024:Pyle Company made the following open- market purchase and sale of Stern Company common
On January 2, 2023, Pullen Company purchased, on the open market, 135,000 shares of Souza Company common stock for $665,000. At that time, Souza Company had common stock ($2 par value) of $300,000
On January 1, 2023, Purdy Company acquired 84% of the capital stock of Sally Company for $840,000. On that date, Sally Company’s stockholders’ equity was:The difference between implied and book
Padilla Company acquired 80% of the outstanding common stock of Skon Company on January 1, 2022, for $132,000. At the date of purchase, Skon Company had a balance in its $2 par value common stock
P Company holds an 80% interest in S Company. Determine the effect (that is, increase, decrease, no change, not determinable) on both the total carrying value of the noncontrolling interest and the
Ball Company is facing bankruptcy proceedings. A balance sheet dated June 30, 2020, and other information are presented below:Required:Prepare a statement of affairs and determine the estimated
The following balance sheet was prepared for Crane Company on December 31, 2020:Crane Company has had operating difficulties, accumulating a deficit over several years before 2020. During 2020,
A receiver was appointed by the court to manage the affairs of Davis Manufacturing Company on March 31, 2020. On this date, the following balance sheet applied:Additional Information:1. The cash
TRX Company has been forced into receivership, and you have been appointed trustee. You decide to open your own set of books in order to distinguish more clearly between transactions occurring before
British Petroleum’s income statement was prepared using IFRS is presented below (in $ millions).Required:A. Are expenditures reported on BP’s income statement reported by function or by nature of
The following information is available for Casper Sleep Inc. for the three years ending December 31, 2020 (dollars in thousands).Required:a. Using the information provided, use Altman’s bankruptcy
The following information is available for GameStop for the three years ending December 31, 2021 (dollars in millions).Required:A. Using the information provided, use Altman’s bankruptcy model
The first two lines of Unilever Group’s 2017 consolidated income statement (using IFRS) report the following amounts (in millions of euros):Required:A. On the income statement, the first two lines
Consider the following information:1. On December 1, 2024, a U.S. firm contracts to sell equipment (with an asking price of 1,000,000 pesos) in Mexico. The firm will take delivery and will pay for
This problem is a continuation of the problem in Section 10.5 of the chapter. In the chapter, the workpaper was prepared for the year of the acquisition. In this problem, the consolidated statements
On October 1, 2024, Fairchange Corporation ordered some equipment from a supplier for 300,000 euros. Delivery is to occur on November 15, 2024, while payment is expected to occur on December 15,
Consider the following information:1. On December 1, 2022, a U.S. firm plans to sell a piece of equipment [with an asking price of 200,000 units of a foreign currency (FC)] during January of 2023.
On January 2, 2024, P Company, a U.S.- based company, acquired for 2,000,000 francs an 80% interest in SFr Company, a Swiss company. On January 2, 2024, SFr Company reported a retained earnings
Select the best answer choice for each of the following items.1. Perez Company’s operations are unrelated to the operations of its subsidiary. Certain balance sheet accounts of the foreign
On January 1, 2024, a U.S. company purchased 100% of the outstanding stock of Ventana Grains, a company located in Latz City, New Zealand. Ventana Grains was organized on January 1, 2005. All the
Select the best answer for each of the following items:1. Golf Company acquired 80% of the outstanding stock of Ping Company, a foreign company, in an acquisition accounted for as a purchase
1. On June 1, 2024, a U.S. firm contracts to sell equipment (with an asking price of 2,000,000 krona) in Sweden. The firm will take delivery and will pay for the equipment on August 1, 2024.2. Spot
The following table provides a revenue analysis for Crocs Inc. from 2019 to 2020. In this table, Crocs reports their wholesale revenues recognized by each of its three reportable segments (and
On January 1, 2024, Trenten Systems, a U.S.- based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland. The acquisition was treated as a purchase
Dorsey Corporation purchased 90% of the common stock of Lansing Company on January 1, 2018. The cost of the investment was equal to the book value interest acquired. Lansing Company operates two
Babbit, Inc., a multinational corporation based in the United States, owns an 80% 2024 in Nakima Company, which is located in Sydney, Australia. The acquisition occurred on January 1, 2024. The
On January 2, 2024, P Company, a U.S.- based company, acquired for 2,000,000 francs an 80% interest in SFr Company. On January 2, 2024, SFr Company reported a retained earnings balance of 480,000
In its financial reports, Cracker Barrel states that their stores represent a single, integrated operation with two related substantially integrated product lines. The operating expenses of the
On April 18, 2011, Eli Lilly and Co. reported first- quarter profits for 2011 of $.95 per share. Analysts projected earnings to be $1.16 or $1.17 per share. However, Lilly reported non- GAAP earnings
Pacheco Industries is comprised of four separate profit centers, which are distributed throughout the United States. Relevant data for each profit center are summarized for 2024:Common costs of
Find GE’s 2021 annual report and read the segment footnote (it is labeled “Note 23: Operating Segments”). The link to obtain the file is: https://www.ge.com/investor- relations/annual- report1.
Below are examples of statements from the annual reports of companies reporting constant currency. Assume the prior year was the reference year.A. Hewlett Packard Enterprise reported that net revenue
What types of information must be disclosed about foreign operations under ASC 280-10-50-40?
Actual quarterly earnings and quarterly estimates of annual earnings for Sloan Company for the year ended December 31, 2024 are as follows:The combined state and federal tax rate for 2024 is 30%.
Spur Company’s actual earnings for the first two quarters of 2024 and its estimate during each quarter of its annual earnings are:Spur Company estimated its permanent differences between accounting
LAX Inc. has the following income before income tax and estimated effective annual income tax rates for the first three quarters of 2024.Required:What should be LAX’s income tax provision in the
The following information is available for Bailey Company for 2024:1. On January 2, 2024, Bailey paid property taxes amounting to $60,000 on its plant and equipment for the calendar year 2024. In
Bismac Industries is a diversified company whose operations are conducted in five product lines, L, M, N, O, and P. Segmented financial information is to be included with the December 31, 2024 annual
Kate Spade, in 2016, operated in three reportable segments: Kate Spade North America, Kate Spade International, and Adelington Design Group. Late in 2016, Coach acquired Kate Spade. One of the
The following information concerns the operations of Blane Company for the year ended December 31, 2024.Required:Determine the operating profit (loss) for each of Blane’s two segments for 2024. Net
Branson Industries conducts operations in five major industries, A, B, C, D, and E. Financial data relevant to each industry for the year ending December 31, 2024, are as follows:Included in the
Find Mattel’s 2020 annual report and read the segment footnote (it is labeled “Note 13: Segment Information”).Required:a. Mattel reports three reportable segments, what are they?b. In your
Day and Night formed an accounting partnership in 2024. Capital transactions for Day and Night during 2024 are as follows:Partnership net income for the year ended December 31, 2024; is $68,400
List the relevant paragraph in the Codification that describes the minimum disclosure requirements for personal financial statements.
On January 1, 2024, Tony and Jon formed T&J Personal Financial Planning with capital investments of $480,000 and $340,000, respectively. The partners wanted to draft a profit and loss agreement
Part A.Baker, Strong, and Weak have called on you to assist them in winding up the affairs of their partnership. You are able to gather the following information.1. The trial balance of the
The trial balance for the General Fund of the City of Fairfield as of December 31, 2020, is presented here:Transactions for the year ended December 31, 2021, are summarized as follows: 1. The City
Select the best answer for each of the following.1. Jon and Joe formed a partnership on July 1, 2024, and invested the following assets:The realty was subject to a mortgage of $25,000, which was

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