Exam 6: Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

Using the indirect method, where does the decrease in accounts receivable appear in a consolidated statement of cash flows?

A company had common stock with a total par value of $18,000,000 and fair value of $62,000,000; and 7% preferred stock with a total par value of $6,000,000 and a fair value of $8,000,000.The book value of the company was $85,000,000.Assuming ninety percent (90%) of the company's total equity is acquired, what amount must be attributed to the noncontrolling interest?

A parent company owns a controlling interest in a subsidiary whose stock has a valuation basis of $27 per share.On the last day of the year, the subsidiary issues new shares entirely to outside parties at $25 per share.The parent still holds control over the subsidiary.Which of the following statements is true?

Prepare Panton's journal entry to recognize the impact of this transaction.

What should the adjusted book value of Chase be after the treasury shares were purchased?

Net cash flow from financing activities was:

How do outstanding subsidiary stock warrants affect the calculation of consolidated earnings per share?

Which one of the following characteristics of preferred stock would make the stock a dilutive security for purposes of calculating earnings per share?

Panton, Inc.acquired 18,000 shares of Glotfelty Corp.several years ago for $30 per share when Glotfelty had a book value of $450,000.Before and after that time, Glotfelty's stock traded at $30 per share.At the present time, Glotfelty reports the following stockholders' equity: Glotfelty issues 5,000 shares of previously unissued stock to Panton for $35 per share. Required: Describe how this transaction would affect Panton's books.

Which of the following is not a potential loss or return of a variable interest entity?

What is the new percent ownership of Webb in Jones after the stock issuance?

On January 1, 2019, Cocker reacquired 8,000 of the outstanding shares of its own common stock for $34 per share.None of these shares belonged to Popper.How would this transaction have affected the additional paid-in capital of the parent company?

In preparing the consolidation worksheet as of December 31, 2018 for AHI and RMC, which of the following worksheet entry descriptions reflects what AHI should do to consolidate the financial statements?

Carlson, Inc.owns 80 percent of Madrid, Inc.Carlson reports net income for 2018 (without consideration of its investment in Madrid, Inc.) of $1,500,000.For the same year, Madrid reports net income of $705,000.Carlson had bonds payable outstanding on January 1, 2018 with a carrying value of $1,200,000.Madrid acquired the bonds on the open market on January 3, 2018 for $1,090,000.For the year 2018, Carlson reported interest expense on the bonds in the amount of $96,000, while Madrid reported interest income of $94,000 for the same bonds.Assuming there are no excess amortizations or other intra-entity transactions, what is Carlson's share of consolidated net income?

How would consolidated earnings per share be calculated if the subsidiary has no convertible securities or warrants?

A parent company owns a controlling interest in a subsidiary and on the last day of the year, the subsidiary issues new shares entirely to outside parties at $33 per share.The parent still holds control over the subsidiary.The adjusted subsidiary value at the date of the new stock issuance was $27 per share.Which of the following statements is true?

A subsidiary issues new shares of common stock at an amount below book value.Outsiders buy all of these shares.Which of the following statements is true?