Exam 9: Indirect and Mutual Holdings

Ackroyd's noncontrolling interest share for 2014 is

Use the following information to answer the question(s)below. Paint Corporation owns 82% of Achille Corporation and Achille Corporation owns 80% of Badrack Corporation.For the current year,the separate net incomes (excluding investment income)of Paint,Achille,and Badrack are $120,000,$100,000,and $50,000,respectively.The cost of each investment was equal to the book value of the investment,which was also equal to the fair value. -Noncontrolling interest share for Achille is

On January 1,2014,Singh Company acquired an 80 percent interest in Gonzalez Company for $300,000.On January 1,2014,Gonzalez's total stockholders' equity was $375,000.The fair value and book value of Gonzalez's individual assets and liabilities were equal. On January 2,2014,Gonzalez Company acquired a 10 percent interest in Singh Company for $50,000.On January 2,2014,Singh's total stockholders' equity was $500,000.The fair value and book value of Singh's individual assets and liabilities were equal. For the year ending December 31,2014,the following data is available: The treasury stock method is used to account for the mutual stock holdings between Singh and Gonzalez.The separate net incomes do not include investment income.A partial consolidating worksheet is below. Required: Prepare the elimination entries for the year ending December 31,2014. Do not enter them onto the worksheet.Instead,list them below.

Paglia Corporation owns 80% of Aburn Corporation and has separate net income of $200,000 for 2013.Aburn Corporation has separate net income of $100,000 and owns 70% of the outstanding stock of Badley Corporation.Badley Corporation has separate net income of $80,000.(Separate net incomes exclude investment income . )The cost of each investment was equal to book value and fair value.The controlling interest share of consolidated net income for 2013 is

On January 1,2014,Peabody Corporation acquired a 90% interest in Salisbury Company for $270,000 when Salisbury's stockholders' equity was $300,000;with Common stock $200,000 and Retained earnings $100,000. On January 1,2014,Salisbury purchased a 10% interest in Peabody for $70,000 when Peabody's total stockholders' equity was $700,000;with Common stock $500,000 and Retained earnings $200,000. The following data was available for the year ending December 31,2014: Use the conventional approach to account for the mutually-held stock.Assume there were no book value/fair value differentials for each investment.The separate net incomes do not include investment income. Required: 1.Prepare the journal entry for Peabody on January 1,2014. 2.Prepare the journal entry for Salisbury on January 1,2014. 3.Prepare the journal entry to record the constructive retirement of 10% of Peabody's outstanding stock due to Salisbury's purchase of Peabody's stock. 4.Determine the incomes of Peabody and Salisbury on a consolidated basis with mutual income for 2014 using simultaneous equations. 5.What is controlling interest share of consolidated net income and noncontrolling interest shares for 2014?

On January 1,2014,Pauline Company acquired 90% of Stephen Company at a cost of $90,000.On January 1,2014,Stephen Company acquired 10% of Pauline Company at a cost of $10,000. On January 1,2014,the following data is available: At December 31,2014,the following data is available: Assuming the treasury stock method is used,what elimination entry is needed for the Investment in Pauline at December 31,2014?

Page Corporation acquired a 60% interest in Ace Corporation at a price $40,000 in excess of book value and fair value on January 1,2013.On the same date,Ace acquired a 70% interest in Bader Corporation at a price $30,000 in excess of book value and fair value.The excess purchase cost paid by Page and Ace was attributed to goodwill.Separate net incomes (excluding investment income)for the three affiliates for 2013 are as follows: Page,$500,000,Ace,$300,000,and Bader,$400,000. Page's controlling interest share of consolidated net income for 2013 is

Use the following information to answer the question(s)below. Pahm Corporation owns 80% of the outstanding voting common stock of Abussi Corporation,which was purchased for $60,000 over Abussi's book value.The excess purchase price was attributable to goodwill.Abussi Corporation owns 60% of the outstanding common stock of Badock Corporation,which was purchased at book value.The separate net incomes of Pahm,Abussi,and Badock (excluding investment income)for the year are $200,000,$240,000,and $260,000,respectively.There were no fair value/book value differences in the assets and liabilities of Pahm,Abussi and Badock. -The amount of income for the current year assigned to the noncontrolling shareholders of Abussi Corporation is

Raymond Company owns 90% of Rachel Company.Rachel Company owns 10% of Raymond Company.The treasury stock method is used.On the books of Rachel Company,we maintain the Investment in Raymond using the ________ method.The ending balance in Investment in Raymond is ________ stockholders' equity in the consolidated balance sheet.

Pallet Corporation owns 80% of Adelt Corporation and Adelt owns 60% of Bajo Inc.Which of the following is correct?

On January 1,2014,Paul Corporation acquired a 90% interest in Satorius Company for $360,000 when Satorius' stockholders' equity was $400,000;with Common stock $200,000 and Retained earnings $200,000. On January 1,2014,Satorius Company purchased a 10% interest in Paul Company for $90,000 when Paul's total stockholders' equity was $900,000;with Common stock $500,000 and Retained earnings $400,000. The following data was available for the year ending December 31,2014: Use the conventional approach to account for the mutually-held stock.Assume there were no book value/fair value differentials for each investment.The separate net incomes do not include investment income. Required: 1.Prepare the journal entry for Paul on January 1,2014. 2.Prepare the journal entry for Satorius on January 1,2014. 3.Prepare the journal entry to record the constructive retirement of 10% of Paul's outstanding stock due to Satorius' purchase of Paul's stock. 4.Determine the incomes of Paul and Satorius on a consolidated basis with mutual income for 2014 using simultaneous equations. 5.What is controlling interest share of consolidated net income and noncontrolling interest shares for 2014? 6.What is consolidated net income?

Use the following information to answer the question(s)below. Paint Corporation owns 82% of Achille Corporation and Achille Corporation owns 80% of Badrack Corporation.For the current year,the separate net incomes (excluding investment income)of Paint,Achille,and Badrack are $120,000,$100,000,and $50,000,respectively.The cost of each investment was equal to the book value of the investment,which was also equal to the fair value. -Noncontrolling interest share for Badrack is

Separate earnings and investment percentages for three affiliates for 2014 are as follows: Assume the investments were acquired at a cost equal to the book value of each investment,which also equals the fair value.Separate earnings do not include investment income. Required: 1.Calculate revised net incomes for Palace,Acres,and Bain by using the conventional method. 2.Determine the controlling interest share of consolidated net income and the noncontrolling interest shares.

Paco Corporation owns 90% of Aber Corporation,Aber Corporation owns 85% of Back Corporation,and Back Corporation owns 5% of Aber Corporation.The separate net incomes (excluding investment income)of Paco,Aber,and Back are $100,000,$40,000,and $55,000,respectively.Assume the investments were acquired at a cost equal to the book value of each investment,which also equals the fair value. Required: 1.Calculate revised net incomes for Paco,Aber,and Back by using the conventional method. 2.Determine the controlling interest share of consolidated net income and the noncontrolling interest shares.

The net income reported for Pahm Corporation for the current year is

Packer Corporation owns 100% of Abel Corporation,Abel Corporation owns 95% of Bacon Corporation and Bacon Corporation owns 80% of Cab Corporation.The separate net incomes (excluding investment income)of Packer,Abel,Bacon,and Cab are $300,000,$100,000,$200,000,and $300,000,respectively.All of the investments were made at times when the investee's book values were equal to their fair values.There were no cost/book value differentials for each investment. Required: Determine the controlling interest share of consolidated net income and noncontrolling interest shares for Packer Corporation and Subsidiaries for the current year.

Controlling interest share of consolidated net income for Paint Corporation and Subsidiaries is: