Beruflich Dokumente
Kultur Dokumente
E3-2
1. D
2. B
3. D
4. D
5. A
6. B
7. C
E3-3
1. C. Advance to Hill $75,000 + receivable from Ward $200,000 = $275,000
2. A. Zero, goodwill has an indeterminate life and is not amortized.
3. A. Pow accounts for Sap using the equity method, therefore, consolidated retained earnings is equal to
Pow’s retained earnings, or $2,480,000. 4 d Zero, all intercompany receivables and payables are
eliminated.
E-3-4
1. Implied fair value of San ($1,800 / 90%) $2,000
Less: Book value of San (1,800)
Excess fair value over book value $200
Equipment undervalued 60
Goodwill at January 1, 2011 $140
Goodwill at December 31, 2011 = Goodwill from consolidation $140
E3-6
Preliminary computation Cost of Sli stock (Fair value) $2,500
Fair value of Sli’s identifiable net assets 2,000
Goodwill $ 500
E3-7
1. Pas Corporation and Subsidiary Consolidated
Income Statement for the year 2012 (in thousands)
Sales ($2,000 + $800) $2,800
Less: Cost of sales ($1,200 + $400) (1,600)
Gross profit 1,200
Less: Depreciation expense ($100 + $80) (180)
Other expenses ($398 + $180) (578)
Consolidated net income 442
Less: Noncontrolling interest share ($140 30%) (42)
Controlling interest share of consolidated net income $ 400
E3-8
1. Capital stock The capital stock appearing in the consolidated balance sheet at December 31, 2011 is
$3,600,000, the capital stock of Pob,the parent company.
E3-9
Pas Corporation and Subsidiary Partial
Balance Sheet at December 31, 2011 (in thousand)
Stockholders’ equity:
Capital stock, $10 par $600
Additional paid-in capital 100
Retained earnings 130
Equity of controlling stockholders 830
Noncontrolling interest 82
Total stockholders’ equity $912
Supporting computations
Computation of consolidated retained earnings:
Pas’s December 31, 2010 retained earnings $ 70
Add: Pas’s reported income for 2011 110
Less: Pas’s dividends (50)
Consolidated retained earnings December 31, 2011 $130
P3-2
1. Schedule to allocate fair value/book value differential
Cost of investment in Set $350
Implied fair value of Set ($350 / 70%) $500
Book value of Set (220)
Excess fair value over book value $280
Stockholders’ equity:
Capital stock $1,000
Retained earnings 100
Equity of controlling stockholders 1,100
Noncontrolling interest * 150 1,250
Total liabilities and stockholders’ equity $1,690
P3-3
Cost of investment in Sof January 1, 2011 $5,400
Implied fair value of Sof ($5,400 / 80%) $6,750
Book value of Sof 5,000
Excess of fair value over book value $1,750
P3-6