Question
In: Accounting
Fargus Corporation owned 61% of the voting common stock of Sanatee, Inc. The parent's interest was...
Fargus Corporation owned 61% of the voting common stock of
Sanatee, Inc. The parent's interest was acquired several years ago
on the date that the subsidiary was formed. Consequently, no
goodwill or other allocation was recorded in connection with the
acquisition price.
On January 1, 2010, Sanatee sold $1,800,000 in ten-year bonds to
the public at 108. The bonds pay a 10% interest rate every December
31. Fargus acquired 40% of these bonds on April 1, 2012, for 95% of
the face value. Both companies utilized the straight-line method of
amortization.
Prepare amortization tables for Fargus (4/1/2012 to 12/31/2013) and Sanatee (1/1/2010 to 12/31/2013)?
Determine whether this is gain/loss on retirement of bond on April 1 2012?
Determine the consolidated interest expense on Dec 31 2012?
If Fargus has net income $200,000 and Sanatee has net income $50,000 in 2012, how much is the consolidated net income?
What consolidation entry would be recorded in connection with these intra-entity bonds on December 31, 2012?
What consolidation entry would be recorded in connection with these intra-entity bonds on December 31, 2013?
Solutions
Expert Solution
Fargus Corporation owned 61% of the voting common stock of
Sanatee, Inc.
ekkarill92 answered 2 years agoRelated Solutions
Fargus Corporation owned 51% of the voting common stock of Sanatee, Inc. The parent's interest was...
Fargus Corporation owned 51% of the voting common stock of
Sanatee, Inc. The parent's interest was acquired several years ago
on the date that the subsidiary was formed. Consequently, no
goodwill or other allocation was recorded in connection with the
acquisition price.
On January 1, 2010, Sanatee sold $1,400,000 in ten-year bonds to
the public at 108. The bonds pay a 10% interest rate every December
31. Fargus acquired 40% of these bonds on April 1, 2012, for 95% of...
Fargus Corporation owned 51% of the voting common stock of Sanatee, Inc. The parent's interest was...
Fargus Corporation owned 51% of the voting common stock of
Sanatee, Inc. The parent's interest was acquired several years ago
on the date that the subsidiary was formed. Consequently, no
goodwill or other allocation was recorded in connection with the
acquisition price.
On January 1, 2017, Sanatee sold $1,400,000 in ten-year bonds to
the public at 108. The bonds pay a 10% interest rate every December
31. Fargus acquired 40% of these bonds on January 1, 2019, for 95%
of...
Cairns owns 80 percent of the voting stock of Hamilton, Inc. The parent's interest was acquired...
Cairns owns 80 percent of the voting stock of Hamilton, Inc.
The parent's interest was acquired several years ago on the date
that the subsidiary was formed.
Consequently, no goodwill or other allocation was recorded in
connection with the acquisition.
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subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition price.
On January 1, 2017 S sold $1,400,000 in ten-year bonds to the
public at 106. The bonds pay a 10% interest rate every December 31.
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