PP, Inc. acquires 90 percent of the 20,000 shares of SS Company's Outstanding common stock on...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
PP, Inc. acquires 90 percent of the 20,000 shares of SS Company's Outstanding common stock on December 31,2019. Of the acquisition-date fair value, it allocates $840,000 to trademarks, a figure amortized at the rate of $21,000 per year Comparative consolidated balance sheets for 2021 and 2020 are as follows: 2021 (USD) 2020 (USD) 1,365,000.00 2,310,000,00 2,919,000.00 Cash and cash equivalent 2,205,000.00 3,675,000.00 3,360,000.00 11,445,000.00 Account receivables Inventory Land, buildings, and equipment (net) 11,760,000.00 Trade mark 819,000.00 840,000.00 Total assets 21.504,000.00 19.194.000.00 Accounts payable Long-term liabilities Noncontrolling interest Preferred stock (10% cummulative) Common stock (20,000 shares outstanding) Retained earnings, 12/31 Total liabilities and stockholders' equity 3,045,000.00 6,825,000.00 396,900.00 1,050,000.00 3,108,000.00 5,775,000.00 357,000.00 1,050,000.00 5,460,000.00 5,460,000.00 4.727.100.00 3.444.000.00 21,504,000.00 19,194.000.00 Additional information for 2021 • Consolidated net income (after adjustment for all intra-entity item) was $1,869,000. • Consolidated depreciation and amortization cqualed $546,000. • On April 10, SS sold a building with $420,000 book value, receiving cash of $525,000. Later that month, PP borrowed $1,050,000 from a local bank and purchased equipment for $630,000. These transactions were all with outside parties. • During the year, PP declared and paid $420,000 dividends on its common stock and $105,000 on its preferred stock, and SS declared and paid a $210,000 dividend on its common stock. • SS has long-term convertible debt of $1,890,000 outstanding included in consolidated liabilities. It recognized interest expenses of $168,000 (net of taxes) on this debt during the year. This debt can be exchanged for 42,000 shares of the subsidiary's common stock. PP owns none of this debt. SS recorded $630,000 net income from its own operations. Noncontrolling interest in consolidated net income was S63,000 PP recorded $42,000 in profits on sales of goods to SS. These goods remain in SS's warchouse at December 31. • PP applies the equity method to account for its investment in SS. On its own book, PP recognized $506,100 equity in carnings from SS and $42,000 intra-entity gross profit in inventory from its sales to S) Required: Prepare a consolidated statement of cash flows for PP, Inc., and SS Company for the year ending December 31, 2021. Use the indirect method for determining the amount of eash provided from operations.(2 decimals if have) PP, Inc. acquires 90 percent of the 20,000 shares of SS Company's Outstanding common stock on December 31,2019. Of the acquisition-date fair value, it allocates $840,000 to trademarks, a figure amortized at the rate of $21,000 per year Comparative consolidated balance sheets for 2021 and 2020 are as follows: 2021 (USD) 2020 (USD) 1,365,000.00 2,310,000,00 2,919,000.00 Cash and cash equivalent 2,205,000.00 3,675,000.00 3,360,000.00 11,445,000.00 Account receivables Inventory Land, buildings, and equipment (net) 11,760,000.00 Trade mark 819,000.00 840,000.00 Total assets 21.504,000.00 19.194.000.00 Accounts payable Long-term liabilities Noncontrolling interest Preferred stock (10% cummulative) Common stock (20,000 shares outstanding) Retained earnings, 12/31 Total liabilities and stockholders' equity 3,045,000.00 6,825,000.00 396,900.00 1,050,000.00 3,108,000.00 5,775,000.00 357,000.00 1,050,000.00 5,460,000.00 5,460,000.00 4.727.100.00 3.444.000.00 21,504,000.00 19,194.000.00 Additional information for 2021 • Consolidated net income (after adjustment for all intra-entity item) was $1,869,000. • Consolidated depreciation and amortization cqualed $546,000. • On April 10, SS sold a building with $420,000 book value, receiving cash of $525,000. Later that month, PP borrowed $1,050,000 from a local bank and purchased equipment for $630,000. These transactions were all with outside parties. • During the year, PP declared and paid $420,000 dividends on its common stock and $105,000 on its preferred stock, and SS declared and paid a $210,000 dividend on its common stock. • SS has long-term convertible debt of $1,890,000 outstanding included in consolidated liabilities. It recognized interest expenses of $168,000 (net of taxes) on this debt during the year. This debt can be exchanged for 42,000 shares of the subsidiary's common stock. PP owns none of this debt. SS recorded $630,000 net income from its own operations. Noncontrolling interest in consolidated net income was S63,000 PP recorded $42,000 in profits on sales of goods to SS. These goods remain in SS's warchouse at December 31. • PP applies the equity method to account for its investment in SS. On its own book, PP recognized $506,100 equity in carnings from SS and $42,000 intra-entity gross profit in inventory from its sales to S) Required: Prepare a consolidated statement of cash flows for PP, Inc., and SS Company for the year ending December 31, 2021. Use the indirect method for determining the amount of eash provided from operations.(2 decimals if have)
Expert Answer:
Answer rating: 100% (QA)
Consolidated statement of cash flows for PP Inc and SS Company for the year ending December 31 2021 ... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
Posted Date:
Students also viewed these accounting questions
-
On January 1, 2010, Piranto acquires 90 percent of Slintons outstanding shares. Financial information for these two companies for the years of 2010 and 2011 follows: Assume that a tax rate of 40...
-
On January 1, 2012, Piranto acquires 90 percent of Slinton's outstanding shares. Financial information for these two companies for the years of 2012 and 2013 follows: Assume that a tax rate of 40...
-
On January 1, 2017, Abbey acquires 90 percent of Benjamin's outstanding shares. Financial information for these two companies for the years 2017 and 2018 follows: Assume that a tax rate of 35 percent...
-
In a recent year, the total scores for a certain standardized test were normally distributed, with a mean of 500 and a standard deviation of 10.4. Answer parts (a)-(d) below. (a) Find the probability...
-
The following bank statement for the month of May is for El Guapo Industries: The following information was taken from the books at El Guapo: Required Prepare El Guapo's May bank reconciliation and...
-
Part 1 The framework created by Professor Sidney Gray in 1988 to explain the development of a country's accounting system is presented in the chapter in Exhibit 2.8. Gray theorized that culture has...
-
Complete the priority checklist in Exhibit 10.2. What do your responses to the checklist tell you about your career choices? Personal Life Family Life goals Personal wealth Career Goals Ambition...
-
This problem requires the use of ACL software, which can be accessed by following the instructions available on the textbook website. Information about downloading and using ACL and the commands used...
-
(a) Prove, using the definition, that L{f(at)} = F() (a #0). (b) Prove, using the definition, that L{eat f(t)} = F(s-a). (c) Prove, using the definition, that the Laplace transform of the function...
-
Alice Appliance Service had net income for the year of $58,500. In addition, the balance sheet reports the following balances: Calculate the return on assets for Alice Appliance Service for the year...
-
Aramco is facing high volatility in crude oil prices. The current price is $300 per barrel with an upper forecasted ceiling of $320 and a lower forecasted floor of $280. Aramco's monthly output is...
-
Revisions to Chinas budget law, passed on 31 August 2014, represent a significant reform, providing a framework for significantly greater transparency and accountability for local government says...
-
The Africa Research Bulletin reported the results of a prefeasibility study by Ironveld plc stating that the grades for pig iron and ferro vanadium were better than expected at its project on the...
-
What is the capacitance of a parallel-plate capacitor that has a plate area \(A\) and a plate separation distance \(d\) ?
-
Increasingly, householders and small businesses are considering renewable power generation systems to decrease their costs. Most of the UK, Ireland and Scandinavia are suited to generating energy...
-
The radius of the dome on one very large Van de Graaff generator is about \(2.5 \mathrm{~m}\), and air breaks down when the field magnitude is about \(3.0 \times 10^{6} \mathrm{~V} / \mathrm{m}\)....
-
At a toll booth, vehicles arrive with a mean arrival rate of 2 vehicles per minute and they are processed with a mean rate of 6 vehicles per minute. Determine the average length of queue, the average...
-
Find the market equilibrium point for the following demand and supply functions. Demand: 2p = - q + 56 Supply: 3p - q = 34
-
Refer to the information in problem 25. Prepare a statement of cash flows in LCU for Fenwickes foreign subsidiary and then translate these amounts into U.S. dollars. In problem 25. Fenwicke Company...
-
Go to the Web site of a company that is currently in bankruptcy reorganization such as Delphi (www.delphi.com), Lexington Precision (www.lexingtonprecision.com), or WCI Communities...
-
In many cases, EPS is computed based on the parents portion of consolidated net income and parent company shares and convertibles. However, a different process must be used for some business...
-
Climate change (a) is a subject most scientists disagree about. (b) refers to the effect of greenhouse gases on atmospheric temperature. (c) refers to temperature increases in all of Earths climate...
-
Climates farther from the equator usually have (a) lower average temperatures. (b) higher solar intensity. (c) more precipitation. (d) more water.
-
What method uses records of past earthquakes to predict future earthquakes? What are the limitations of this method?
Study smarter with the SolutionInn App