Prepare consolidation spreadsheet for intercompany sale of land - Equity method Assume a parent company acquired...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Prepare consolidation spreadsheet for intercompany sale of land - Equity method Assume a parent company acquired its subsidiary on January 1, 2020, at a purchase price that was $360,000 in excess of the book value of the subsidiary's Stockholders' Equity on the acquisition date. Of that excess, $240,000 was assigned to an unrecorded Patent owned by the subsidiary that is being amortized over a 10-year period. The [A] Patent asset has been amortized as part of the parent's equity method accounting. The remaining $120,000 was assigned to Goodwill. In 2021, the wholly owned subsidiary sold Land to the parent for $144,000. The Land was reported on the subsidiary's balance sheet for $96,000 on the date of sale. The parent uses the equity method to account for its Equity Investment. Financial statements of the parent and its subsidiary for the year ended December 31, 2022 are presented in d. below. a. Show the computation to yield the $60,000 of Income (loss) from subsidiary reported by the parent for the year ended December 31, 2022 Note: Use a negative sign with an answer to indicate a reduction in the computation. Net income of subsidiary b. Show the computation to yield the $636,000 Equity Investment account balance reported by the parent on December 31, 2022. Note: Use a negative sign with an answer to indicate a reduction in the computation. Common stock APIC EOY Retained earnings EOY Unamortized AAP Gain on Intercompany sale Equity investment 0 0 0 0 0 0 0 0 0 Prepare consolidation spreadsheet for intercompany sale of land - Equity method Assume a parent company acquired its subsidiary on January 1, 2020, at a purchase price that was $360,000 in excess of the book value of the subsidiary's Stockholders' Equity on the acquisition date. Of that excess, $240,000 was assigned to an unrecorded Patent owned by the subsidiary that is being amortized over a 10-year period. The [A] Patent asset has been amortized as part of the parent's equity method accounting. The remaining $120,000 was assigned to Goodwill. In 2021, the wholly owned subsidiary sold Land to the parent for $144,000. The Land was reported on the subsidiary's balance sheet for $96,000 on the date of sale. The parent uses the equity method to account for its Equity Investment. Financial statements of the parent and its subsidiary for the year ended December 31, 2022 are presented in d. below. a. Show the computation to yield the $60,000 of Income (loss) from subsidiary reported by the parent for the year ended December 31, 2022 Note: Use a negative sign with an answer to indicate a reduction in the computation. Net income of subsidiary b. Show the computation to yield the $636,000 Equity Investment account balance reported by the parent on December 31, 2022. Note: Use a negative sign with an answer to indicate a reduction in the computation. Common stock APIC EOY Retained earnings EOY Unamortized AAP Gain on Intercompany sale Equity investment 0 0 0 0 0 0 0 0 0
Expert Answer:
Answer rating: 100% (QA)
a Computation of Income Loss from Subsidiary for 2022 Given Purchase price excess 360000 Excess allo... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
6. What is the effect size (use the formula for the adjusted r)? (1 point) 7. You decide that your next step is to perform a multiple regression analysis. Choose an orthogonal variable to add to your...
-
Assume a parent company acquired its subsidiary on January 1, 2009, at a purchase price that was $320,000 in excess of the book value of the subsidiary's Stockholders' Equity on the acquisition date....
-
Assume a parent company acquired its subsidiary on January 1, 2015, at a purchase price that was $222,000 in excess of the book value of the subsidiarys Stockholders Equity on the acquisition date....
-
Suppose that Q(x, y) is a function such that 1/Q(x, y) is continuous for all (x, y). Which of the following statements are true? (a) Q(x, y) is continuous for all (x, y). (b) Q(x, y) is continuous...
-
ALLOCATING OPERATING EXPENSEMILES DRIVEN Herbert Quiong owns a furniture store that offers free delivery of merchandise delivered within the local area. Mileage records for the three sales...
-
Write method distance to calculate the distance between two points (x1, y1) and (x2, y2). All numbers and return values should be of type double. Incorporate this method into an application that...
-
List three ways to get input from the console and convert that input to the desired data type.
-
An inexperienced accountant prepared this condensed income statement for McDowell Company, a retail firm that has been in business for a number of years. As an experienced, knowledgeable accountant,...
-
The money supply process involves various factors, including the actions of commercial banks, the central bank's monetary policy, and the public's demand for money. My questions are: How do these...
-
The U.S. Department of Commerce publishes a series of census documents referred to as Current Industrial Reports. Included in these documents are the manufacturers shipments, Inventories, and orders...
-
QUESTION TWO (30 MARKS) You have been challenged to create a custom chat application that allows two users to communicate by sending messages to each other using a Socket and ServerSocket in Java....
-
what happened to the U.S dollars exchange rate with the euro and the British pound over the past year.what are thethe explanations for any vhanges .what does it mean to Americans
-
you are close to reaching your daily production goal and close to finishing your shift. you discover that the packaging is not lining up correctly and is out of specifications, but it is a small...
-
Jeremy Norton is a property investor and the owner of a French bakery in Balmain. All payments are fully substantiated Receipts Cash Sales 275,240 Cash received from Debtors 15,700 Rent received (See...
-
What happens in the immediate short run and over a period of time when rent control is abolished in any city?
-
You will be creating a full page ad for your New Shoes company (DOPE SHOES). Follow the guidelines below to ensure that the ad is competed in its entirety Ensure that your ad addresses the...
-
Given P(A) = 0.3, P(B) = 0.5, and P(A B) = 0.7, then P(B | A) is?
-
Suppose the market is semistrong form efficient. Can you expect to earn excess returns if you make trades based on? a. Your brokers information about record earnings for a stock? b. Rumors about a...
-
FASB assumes that if the number of shares issued in a stock dividend is large enough to materially reduce the per-share market value, it is inappropriate to record the impact using the firms market...
-
On January 1, 2006, Pabst Company acquired 80% of Secor Companys common stock and 30% of Secor Companys 10% preferred stock. Pabst Company paid $680,000 for the common stock and $135,000 for the...
-
Distinguish between an expense and an expenditure.
-
What might be problematic about these responses to interview questions? How might the answers be improved? a. Q: Tell me about yourself. A: Im really easy-going and casual. b. Q: I noticed that you...
-
Revise the follow-up message below to be more professional and effective, based on the principles in this chapter. December 2, 2021 Ms. Charlotte LeClaire Pebble Creek Publishing Inc. New York, NY...
-
Write a follow-up email message or letter after an office visit or plant trip. Thank your hosts for their hospitality; relate your strong points to things you learned about the company during the...
Study smarter with the SolutionInn App