accounting quistion

Parent Ltd acquired equity in Subsidiary Ltd on 1 April 2009. At that date the identifiable net

assets were considered to be fairly valued and the equity of Subsidiary Ltd comprised:

Share capital

$100,000

Retained earnings

30,000

Nine years later Parent Ltd is preparing consolidated financial statements for the financial

year ended 31 March 2018 and has gathered the following information:

?

Prior years’ impairment of total goodwill amounted to $26,000. For the current year

ended 31 March 2018 the directors of Parent Ltd believe that the total goodwill has

been further impaired by $4,000.

?

During the financial year ended 31 March 2017 Subsidiary Ltd made sales to Parent

Ltd of $30,000 and recorded a profit of $5,000. Parent Ltd had not sold this purchase

of inventory as at 31 March 2017.

?

During the financial year ended 31 March 2018 Parent Ltd made sales to Subsidiary

Ltd of $7,000 and recorded a profit of $3,200. This purchase remained in the

inventory of Subsidiary Ltd as at 31 March 2018.

?

Subsidiary Ltd billed Parent Ltd $2,100 for consulting advice provided on 25 March

2018. This transaction had been recorded by both entities; it remained unpaid as at 31

March 2018.

?

The following account balances have been extracted from the financial statements of

Subsidiary Ltd at 31 March 2018:

Profit after tax

$60,000

Retained earnings-opening balance

40,000

Dividends declared and paid

15,000

Retained earnings–closing balance

85,000

Share capital

100,000

Required:

Assume Parent Ltd only acquired 40% of the equity in Subsidiary Ltd for $80,000 on 1 April

2009.

a) Prepare the notional journal entry, as at 31 March 2018, to account for Parent Ltd’s

investment in Subsidiary Ltd using the equity method as required by

NZ IAS 28 Investments

in Associates.

The directors do not believe the investment is impaired. The tax rate is 28%.

Your workings must be included on each line of your notional journal entry. Complete a ‘quick

estimate’ in the space provided.

(b) Calculate the carrying amount of the asset Investment in Subsidiary Ltd that would appear

in the equity adjusted financial statements as at 31 March 2018. Your workings must be

shown.

Ayayai Company was incorporated on January 2, 2018, but was unable to begin manufacturing activities until July 1, 2018, because new factory facilities were not completed until that date. The Land and Buildings account reported the following items during 2018. January 31 Land and building $164,600 February 28 Cost of removal of building 9,909 May 1 Partial payment of new construction 62,340 May 1 Legal fees paid 4,460 June 1 Second payment on new construction 44,000 June 1 Insurance premium 2,280 June 1 Special tax assessment 3,780 June 30 General expenses 35,298 July 1 Final payment on new construction 30,160 December 31 Asset write-up 48,889 405,716 December 31 Depreciation-2018 at 1% (4,231 ) December 31, 2018 Account balance $401,485 The following additional information is to be considered. 1. To acquire land and building, the company paid $84,600 cash and 800 shares of its 8% cumulative preferred stock, par value $100 per share. Fair value of the stock is $127 per share. 2. Cost of removal of old buildings amounted to $9,909, and the demolition company retained all materials of the building. 3. Legal fees covered the following. Cost of organization $620 Examination of title covering purchase of land 1,690 Legal work in connection with construction contract 2,150 $4,460 4. Insurance premium covered the building for a 2-year term beginning May 1, 2018. 5. The special tax assessment covered street improvements that are permanent in nature. 6. General expenses covered the following for the period from January 2, 2018, to June 30, 2018. President’s salary $31,365 Plant superintendent’s salary-supervision of new building 3,933 $35,298 7. Because of a general increase in construction costs after entering into the building contract, the board of directors increased the value of the building $48,889, believing that such an increase was justified to reflect the current market at the time the building was completed. Retained earnings was credited for this amount. 8. Estimated life of building-50 years. Depreciation for 2018-1% of asset value (1% of $423,100, or $4,231). Prepare entries to reflect correct land, buildings, and depreciation accounts at December 31, 2018. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and

Drs. Glenn Feltham and David Ambrose began operations of their physical therapy clinic, called Northland Physical Therapy, on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, was as follows (the amounts are rounded to thousands of dollars to simplify):

Transactions during 2018 (summarized in thousands of dollars) follow:

1. Borrowed $27 cash on July 1, 2018, signing a six-month note payable.
2. Purchased equipment for $30 cash on July 2, 2018.
3. Issued additional shares of common stock for $4 on July 3.
4. Purchased software on July 4, $4 cash.
5. Purchased supplies on July 5 on account for future use, $6.
6. Recorded revenues on December 6 of $62, including $10 on credit and $52 received in cash.
7. Recognized salaries and wages expense on December 7 of $35; paid in cash.
8. Collected accounts receivable on December 8, $7.
9. Paid accounts payable on December 9, $8.
10. Received a $4 cash deposit on December 10 from a hospital for a contract to start January 5, 2019.

Data for adjusting journal entries on December 31:

11. Amortization for 2018, $1.
12. Supplies of $4 were counted on December 31, 2018.
13. Depreciation for 2018, $2.
14. Accrued interest of $1 on notes payable.
15. Salaries and wages incurred but not yet paid or recorded, $2.
16. Income tax expense for 2018 was $5 and will be paid in 2019.

1. 9-a. How much net income did the physical therapy clinic generate during 2018? What was its net profit margin?

2. 9-b. Is the business financed primarily by liabilities or stockholders’ equity?

3. 9-c. What is its current ratio?

REQUIRED:
9A. How much net income did the physical therapy clinic generate during 2018? What was its net profit margin?

9B. Is the business financed primarily by liabilities or stockholders’ equity? Yes or no

9C. What is its current ratio?

Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 10,500 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $110,750. However, its equipment (with a five-year remaining life) was undervalued by $8,850 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $37,900, although no value had been recorded on Turner’s books. The customer list had an estimated remaining useful life of 10 years. The following balances come from the individual accounting records of these two companies as of December 31, 2017: Haynes Turner Revenues $ (686,000 ) $ (318,000 ) Expenses 490,000 149,000 Investment income Not given 0 Dividends declared 100,000 80,000 The following balances come from the individual accounting records of these two companies as of December 31, 2018: Haynes Turner Revenues $ (799,000 ) $ (390,000 ) Expenses 516,000 180,500 Investment income Not given 0 Dividends declared 110,000 60,000 Equipment 571,000 359,000 a. What balance does Haynes’s Investment in Turner account show on December 31, 2018, when the equity method is applied? b. What is the consolidated net income for the year ending December 31, 2018? c-1. What is the consolidated equipment balance as of December 31, 2018? c-2. Would this answer be affected by the investment method applied by the parent? d. Prepare entry *C for the beginning of the Retained Earnings account on a December 31, 2018 by using initial value, partial equity and equity method. Req A to C2Req D a. What balance does Haynes’s Investment in Turner account show on December 31, 2018, when the equity method is applied? b. What is the consolidated net income for the year ending December 31, 2018? c-1. What is the consolidated equipment balance as of December 31, 2018? c-2. Would this answer be affected by the investment method applied by the parent? Show less a. Investment in Turner account b. Consolidated net income c-1. Consolidated equipment c-2. Would this answer be affected by the investment method applied by the parent? Prepare entry *C for the beginning of the Retained Earnings account on a December 31, 2018 by using initial value, partial equity and equity method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Consolidation Worksheet Entries Prepare entry *C if the parent used the initial value method. Note: Enter debits before credits. Date Accounts Debit Credit December 31, 2018

Issue 3:

My next issue relates to the sale of non-current assets within the Group. The adjustments to Depreciation and Accumulated Depreciation in the worksheet is very confusing. I don’t understand why we should be making any adjustments to these accounts which have nothing to do with the sale of a non-current asset. Why do we need this entry?

Is Aspirin polar or non-polar?

In my thin layer chromotography lab the aspirin traveled far up the silica gel plate which would mean it's non-polar.

But looking that the chemical structure it looks to me like it is polar.

Why would it travel up the plate so far if it is a polar molecule or is it not polar for some other reason?

Discuss the idea that unemployment is a "non-problem".

Jean-Baptiste Say, the classical economists, and some contemporary economists would argue that a discussion of unemployment is a "non-problem." Discuss the position that France or Germany really has no "unemployment problem." Hint: examine union rules, customs, and lifestyles, and compare union-management bargaining positions in France or Germany with those in Ireland or Spain.

During chapters 9, 13, 15, and 16, the class was introduced to reconciling the fund financial statements to the government wide financial statements.  The class was also introduced to non profit accounting. From these chapters, please select one aspect of government wide financial statements, the reconciliation to the government wide financial statements, or non profit accounting standards to discuss.

In class we discussed three non-traditional banking companies (Goldman Sachs, Mutual of Omaha and

BMW Financial) Identify two more non-traditional banking companies and conduct a similar analysis.

Provide a brief history, an overview of their business model and briefly comment on their recent financial

performance. Do you believe they are a successful institution? Why or why not.

In your own words, the debate over unisex or non-gendered bathroom has been a hot issue lately. Do you think someone who is transgender should have to pick between male or female? Do you support unisex or non-gendered bathrooms? Do you think it’s more controversy than it should be? Debate.