Question
In: Accounting
Pat Inc. purchased the $100,000 face value outstanding bonds of Slinger Company, its 80%-owned subsidiary, for...
Pat Inc. purchased the $100,000 face value outstanding bonds of Slinger Company, its 80%-owned subsidiary, for $97,000 on January 1, 20X3. The bonds mature on January 1, 20X6. The bonds have a stated interest rate of 8% and were sold for $101,000 on January 1, 20X1. The bonds pay interest each January 1. Amortization of the issue premium and /or discount will be on the straight-line basis. Instruction:
1. Record the entries Slinger Company would make on its books for 20X3
2. Record the entries Pat Inc. would make on its books for 20X3
Solutions
ekkarill92 answered 4 months agoRelated Solutions
Pat Inc. purchased the $100,000 face value outstanding bonds of Slinger Company, its 80%-owned subsidiary, for...
Pat Inc. purchased the $100,000 face value outstanding bonds of
Slinger Company, its 80%-owned subsidiary, for $97,000 on January
1, 20X3. The bonds mature on January 1, 20X6. The bonds have a
stated interest rate of 8% and were sold for $101,000 on January 1,
20X1. The bonds pay interest each January 1. Amortization of the
issue premium and /or discount will be on the straight-line basis.
Instruction:
1. Record the entries Slinger Company would make on its books
for...
Complete the following partial worksheet for Pat Inc. and subsidiary Slinger Company for the first year...
Complete the following partial worksheet for Pat Inc. and
subsidiary Slinger Company for the first year subsequent to
acquisition intercompany bonds, 20X4 Pat Inc. and Subsidiary
Slinger Company Partial Consolidated Worksheet For the Year Ended
December 31, 20X4 Trial Balance Eliminations and Adjustments Pat
Slinger Dr. Cr. Interest receivable 8,000 Investments in Slinger
bonds 99,000 Interest payable (8,000) Bonds payable (100,000)
Premium on bonds payable (200) Interest income (9,000) Interest
expense 7,800 Elimination and Adjustments:
(B1) Eliminate the intercompany bonds...
Viking Inc. owned all of Quest Co. The subsidiary had bonds payable outstanding on January 1,...
Viking Inc. owned all of Quest Co. The subsidiary had bonds
payable outstanding on January 1, 2016, with a book value of $265K.
The parent acquired the bonds on that date for $288K. Subsequently,
Viking reported interest income of $25K in 2016 while Quest
reported interest expense of $29K. Consolidated financial
statements were prepared for 2017. What adjustment would be
required for the retained earnings balance as of January 1,
2017?
The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company:
The following separate income statements are for Burks Company
and its 80 percent–owned subsidiary, Foreman Company:BurksForemanRevenues$(422,000)$(322,000)Expenses373,000236,000Gain on sale of equipment0(26,000)Equity earnings of
subsidiary(63,000)0Net income$(112,000)$(112,000)Outstanding common shares60,00033,000Additional InformationAmortization expense resulting from Foreman’s excess
acquisition-date fair value is $36,000 per year.Burks has convertible preferred stock outstanding. Each of these
6,000 shares is paid a dividend of $4 per year. Each share can be
converted into four shares of common stock.Stock warrants to buy 14,000 shares of Foreman are also
outstanding. For $10,...
The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company:...
The following separate income statements are for Burks Company
and its 80 percent–owned subsidiary, Foreman Company:
Burks
Foreman
Revenues
$
(420,000
)
$
(320,000
)
Expenses
344,000
235,000
Gain on sale of equipment
0
(25,000
)
Equity earnings of
subsidiary
(62,000
)
0
Net income
$
(138,000
)
$
(110,000
)
Outstanding common shares
60,000
30,000
Additional Information
Amortization expense resulting from Foreman’s excess
acquisition-date fair value is $35,000 per year.
Burks has convertible preferred stock outstanding. Each of these...
The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company:...
The following separate income statements are for Burks Company
and its 80 percent–owned subsidiary, Foreman Company: Burks Foreman
Revenues $ (448,000 ) $ (348,000 ) Expenses 273,000 249,000 Gain on
sale of equipment 0 (39,000 ) Equity earnings of subsidiary (73,000
) 0 Net income $ (248,000 ) $ (138,000 ) Outstanding common shares
60,000 40,000
Additional Information Amortization expense resulting from
Foreman’s excess acquisition-date fair value is $49,000 per year.
Burks has convertible preferred stock outstanding. Each of these...
The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company:...
The following separate income statements are for Burks Company
and its 80 percent–owned subsidiary, Foreman Company:
Burks
Foreman
Revenues
$
(438,000
)
$
(338,000
)
Expenses
270,000
244,000
Gain on sale of equipment
0
(34,000
)
Equity earnings of
subsidiary
(68,000
)
0
Net income
$
(236,000
)
$
(128,000
)
Outstanding common shares
65,000
40,000
Additional Information
Amortization expense resulting from Foreman’s excess
acquisition-date fair value is $41,000 per year.
Burks has convertible preferred stock outstanding. Each of these...
The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company:...
The following separate income statements are for Burks Company
and its 80 percent–owned subsidiary, Foreman Company:
Burks
Foreman
Revenues
$
(400,000
)
$
(328,000
)
Expenses
220,000
239,000
Gain on sale of equipment
0
(29,000
)
Equity earnings of subsidiary
(66,000
)
0
Net income
$
(246,000
)
$
(118,000
)
Outstanding common shares
70,000
36,000
Additional Information
Amortization expense resulting from Foreman’s excess
acquisition-date fair value is $34,000 per year.
Burks has convertible preferred stock outstanding. Each of
these...
Following are separate income statements for Austin, Inc., and its 80 percent owned subsidiary, Rio Grande...
Following are separate income statements for Austin, Inc., and
its 80 percent owned subsidiary, Rio Grande Corporation as well as
a consolidated statement for the business combination as a
whole.
Austin
Rio Grande
Consolidated
Revenues
$
(760,000
)
$
(540,000
)
$
(1,300,000
)
Cost of goods sold
420,000
320,000
740,000
Operating expenses
120,000
66,000
215,000
Equity in earnings of Rio
Grande
(104,000
)
Individual company net
income
$
(324,000
)
$
(154,000
)
Consolidated net income
$
(345,000
)...
Following are separate income statements for Austin, Inc., and its 80 percent owned subsidiary, Rio Grande...
Following are separate income statements for Austin, Inc., and
its 80 percent owned subsidiary, Rio Grande Corporation as well as
a consolidated statement for the business combination as a
whole.
Austin
Rio Grande
Consolidated
Revenues
$
(739,000
)
$
(526,000
)
$
(1,265,000
)
Cost of goods sold
413,000
313,000
726,000
Operating expenses
114,000
83,000
235,000
Equity in earnings of Rio Grande
(70,000
)
Individual company net income
$
(282,000
)
$
(130,000
)
Consolidated net income
$
(304,000
)...
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