Amortization of fair value over cost reduces the investment account 3. After allocating cost in excess of book value‚ which asset or liability would not be amortized over a useful life? A. Cost of goods sold B. Property‚ plant‚ & equipment C. Patents D. Goodwill E. Bonds payable 4. A company should always use the equity method to account for an investment if A. it has the ability to exercise significant influence over the operating policies of the investee. B. it owns 30% of another company’s stock. C
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Property‚ Plant and Equiptment * The property‚ plant and equipment portion of the Consolidated Balance Sheet of Sterling Homex shows a significant increase from 1970 to 1971. The Major contributor to its drastic increase is the “Buildings” account. From 1‚702‚924.00 it increased to 4‚822‚055.00‚ the movement was not explained in the notes though it may be attributed to the expansion of Homex in 1971. This is the time wherein they doubled their manufacturing facilities and created the U.S. Shelter
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The Impact of Assets Impairment on Company Accounts Assignment 1 ACCT 20054 – Company Accounting Term 2‚ 2012 Prepared & Submitted by Jobish Mathew S0214315 Tutor: Davood Alizadeh Due date: 24th August 2012 Submitted date: 24th August 2012 Executive Summary The study ‘The Impact of Assets Impairment on Company Accounts’ presents the cotemporary issues facing by major five Australian companies Qantas‚ Ten Networks‚ Billabong‚ Bluescope steel and Harvey Norman. This research
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prepaid accounts fall under this. Rule- Dr. the receiver Cr. the giver 2. Real Accounts- All assets‚ tangible & intangible come under this. Tangible assets like land & building‚ plant & machinery‚ furniture etc. and Intangible assets like goodwill‚ patents‚ trademarks etc. Rule- Dr. what comes in Cr. what goes out 3. Nominal Accounts- All expenses‚ losses‚ incomes and gains come under this. Rent‚ wages‚ salaries‚ interest‚ bad debts etc. are some examples. Rule- Dr. all expenses
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• Consolidation journals are posted into the consolidation worksheet in “adjustment” columns as follows: Extract only Parent P Ltd. $’000 Subsidiary S Ltd. $’000 Adjustments DR Lecture 9 part b Consolidation: Wholly owned subsidiaries Prepared by Emma Holmes and Rick Newby Land Invt in S Ltd Receivables Cash 400 120 200 40 760 150 Share capital Retained earnings Creditors 500 160 100 760 100 20 50 170 Cons. Balances CR XX XX XX
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this consolidation general entry for the business combination: Dr. | Land | $ 21‚000‚000 | | | | Dr. | PPE | $ 7‚000‚000 | | | | Dr. | IPR&D | $ 15‚000‚000 | | | | Dr. | Trademark | $ 3‚000‚000 | | | | Dr. | Goodwill | $ 122‚750‚000 | | | | | | | Cr. | Cash | $40‚000‚000 | | | | Cr. | C/S | $70‚000‚000 | | | | Cr. | APIC | $ 5‚000‚000 | | | | Cr. | NCI | $ 33‚750‚000 | Here are the reasons that I suggest to make that general entry:
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The Reporting Entity and the Consolidation of Less-than-Wholly-Owned Subsidiaries with No Differential P3-33 (Page 144-145) Consolidated Worksheet and Balance Sheet on the Acquisition Date (Equity Method) Peanut Company acquired 90 percent of Snoopy Company’s outstanding common stock for $270‚000 on January 1‚ 20X8‚ when the book value of Snoopy’s net assets was equal to $300‚000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of January 1
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liability at each step for the purposes of calculating a portion of goodwill has been removed. Instead‚ goodwill is measured as the difference at acquisition date between the fair value of any investment in the business held before the acquisition‚ the consideration transferred and the net assets acquired. • Acquisition-related costs. Acquisition-related costs are generally recognised as expenses (rather than included in goodwill). • Contingent consideration. Contingent consideration must be recognised
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Preparation of Consolidated Statement of Financial Position 1 The consolidation process • Before consolidating‚ it may be necessary to adjust subsidiary’s financial statements where: 1. The subsidiary’s end of reporting period is different to the parent’s. In such cases the subsidiary is required to prepare adjusted financial statements as at the parent’s reporting date. 2. The subsidiary’s accounting policies are different to the parent’s. In such cases the subsidiary is required to
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combination of the income statements and balance sheets the overall ROE which consists of Square Ds 18.9% and Schneider’s net of 9.1% would net out to an 11.4%. If the savings were included the rate would move up to 12.9%. This is of course excluding any goodwill‚ write-downs and restructuring charges. Obviously Square Ds earnings of $115 million on and equity of $603 million (18.9%) are an attractive addition to Schneider’s balance sheet‚ but it does appear that they are more interested in gaining the distribution
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