105. Thomas Inc. had the following stockholders’ equity accounts as of January
1, 2011:
Kuried Co. acquired all of the voting common stock of Thomas on January 1,
2011, for $20,656,000. The preferred stock remained in the hands of outside
parties and had a fair value of $3,060,000. A database valued at $656,000 was
recognized and amortized over five years.
During 2011, Thomas reported earning $630,000 in net income and paid $504,000
in total cash dividends. Kuried used the equity method to account for this
investment.
What was the non-controlling interest’s share of consolidated net income for the
year 2011?
106. Thomas Inc. had the following stockholders’ equity accounts as of January
1, 2011:
Kuried Co. acquired all of the voting common stock of Thomas on January 1,
2011, for $20,656,000. The preferred stock remained in the hands of outside
parties and had a fair value of $3,060,000. A database valued at $656,000 was
recognized and amortized over five years.
During 2011, Thomas reported earning $630,000 in net income and paid $504,000
in total cash dividends. Kuried used the equity method to account for this
investment.
What is the controlling interest share of Thomas’ net income for the year ended
December 31, 2011?
107. Thomas Inc. had the following stockholders’ equity accounts as of January
1, 2011:
Kuried Co. acquired all of the voting common stock of Thomas on January 1,
2011, for $20,656,000. The preferred stock remained in the hands of outside
parties and had a fair value of $3,060,000. A database valued at $656,000 was
recognized and amortized over five years.
During 2011, Thomas reported earning $630,000 in net income and paid $504,000
in total cash dividends. Kuried used the equity method to account for this
investment.
What was Kuried’s balance in the Investment in Thomas Inc. account as of
December 31, 2011?
108. Thomas Inc. had the following stockholders’ equity accounts as of January
1, 2011:
Kuried Co. acquired all of the voting common stock of Thomas on January 1,
2011, for $20,656,000. The preferred stock remained in the hands of outside
parties and had a fair value of $3,060,000. A database valued at $656,000 was
recognized and amortized over five years.
During 2011, Thomas reported earning $630,000 in net income and paid $504,000
in total cash dividends. Kuried used the equity method to account for this
investment.
Prepare all consolidation entries for 2011.
109. Jet Corp. acquired all of the outstanding shares of Nittle Inc. on January 1,
2009, for $644,000 in cash. Of this price, $42,000 was attributed to equipment
with a ten-year remaining useful life. Goodwill of $56,000 had also been
identified. Jet applied the
partial equity method
so that income would be accrued
each period based solely on the earnings reported by the subsidiary.
On January 1, 2012, Jet reported $280,000 in bonds outstanding with a book
value of $263,200. Nittle purchased half of these bonds on the open market for
$135,800.
During 2012, Jet began to sell merchandise to Nittle. During that year, inventory
costing $112,000 was transferred at a price of $140,000. All but $14,000 (at Jet’s
selling price) of these goods were resold to outside parties by year’s end. Nittle
still owed $50,400 for inventory shipped from Jet during December.
The following financial figures were for the two companies for the year ended
December 31, 2012.
Required:
110. Allen Co. held 80% of the common stock of Brewer Inc. and 40% of this
subsidiary’s convertible bonds. The following consolidated financial statements
were for 2010 and 2011.
Additional Information:
1. Bonds were issued during 2011 by the parent for cash.
2. Amortization of a database acquired in the original combination amounted to
$7,000 per year.
3. A building with a cost of $84,000 but a $42,000 book value was sold by the
parent for cash on May 11, 2011.
4. Equipment was purchased by the subsidiary on July 23, 2011, using cash.
5. Late in November 2011, the parent issued common stock for cash.
6. During 2011, the subsidiary paid dividends of $14,000.
Required:
Prepare a consolidated statement of cash flows for this business combination for
the year ending December 31, 2011. Either the direct method or the indirect
method may be used.
111. Panton, Inc. acquired 18,000 shares of Glotfelty Corp. several years ago. At
the present time, Glotfelty is reporting the following stockholders’ equity:
Glotfelty issues 5,000 shares of previously unissued stock to the public for $40
per share. None of this stock is purchased by Panton.
Describe how this transaction would affect Panton’s books.
112. Panton, Inc. acquired 18,000 shares of Glotfelty Corp. several years ago. At
the present time, Glotfelty is reporting the following stockholders’ equity:
113. Panton, Inc. acquired 18,000 shares of Glotfelty Corp. several years ago. At
the present time, Glotfelty is reporting the following stockholders’ equity:
114. Panton, Inc. acquired 18,000 shares of Glotfelty Corp. several years ago. At
the present time, Glotfelty is reporting the following stockholders’ equity:
115. Panton, Inc. acquired 18,000 shares of Glotfelty Corp. several years ago. At
the present time, Glotfelty is reporting 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.