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

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?

What was the noncontrolling interest's share of consolidated net income for the year 2018?

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

Parent Corporation acquired some of its subsidiary's bonds on the open bond market, paying a price $40,000 higher than the bonds' carrying value.How should the difference between the purchase price and the carrying value be accounted for?

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?

What would Knight Co.report as consolidated diluted earnings per share (rounded)?

On January 1, 2018, Bast Co.had a net book value of $2,100,000 as follows: Fisher Co.acquired all of the outstanding preferred shares for $148,000 and 60% of the common stock for $1,281,000.Fisher believed that one of Bast's buildings, with a twelve-year life, was undervalued on the company's financial records by $70,000. Required: What is the amount of goodwill to be recognized from this purchase?

Which of the following statements is false concerning variable interest entities (VIEs)?

Compute the noncontrolling interest in Smith at date of acquisition.

What is the adjusted book value of Chase Company after the issuance of the shares?

How are intra-entity inventory transfers treated on the consolidation worksheet and how are they reflected in a consolidated statement of cash flows?

What would differ between a statement of cash flows for a consolidated company and an unconsolidated company using the indirect method?

Parent Corporation recently acquired some of its subsidiary's outstanding bonds at an amount which required the recognition of a loss.In what ways could the loss be allocated? Which allocation would you recommend? Why?

Where do dividends paid by a subsidiary to the parent company appear in a consolidated statement of cash flows?

Danbers Co.owned seventy-five percent of the common stock of Renz Corp.How does the issuance of a five percent stock dividend by Renz affect Danbers and the consolidation process?

On January 1, 2019, Cocker issued 10,000 additional shares of common stock for $21 per share.Popper did not acquire any of this newly issued stock.How would this transaction affect the additional paid-in capital of the parent company?

Describe how this transaction would affect Panton's books.

Stevens Company has had bonds payable of $10,000 outstanding for several years.On January 1, 2018, when there was an unamortized discount of $2,000 and a remaining life of 5 years, its 80% owned subsidiary, Matthews Company, purchased the bonds in the open market for $11,000.The bonds pay 6% interest annually on December 31.The companies use the straight-line method to amortize interest revenue and expense.Compute the consolidated gain or loss on a consolidated income statement for 2018.

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

Wolff Corporation owns 70 percent of the outstanding stock of Donald, Inc.During the current year, Donald made $75,000 in sales to Wolff.How does this transfer affect the consolidated statement of cash flows?