Questions from Advanced Accounting

Q: Haynes, Inc., obtained 100 percent of Turner Company’s common stock

Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 9,000 shares of $10 par value common stock. Haynes’s shares had a...

Q: On January 1, 2017, Alison, Inc., paid $

On January 1, 2017, Alison, Inc., paid $60,000 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $200,000 and liabilities of $75,000. A pa...

Q: Alomar Co., a consolidated enterprise, conducted an impairment review for

Alomar Co., a consolidated enterprise, conducted an impairment review for each of its reporting units. In its qualitative assessment, one particular reporting unit, Sellers, emerged as a candidate for...

Q: Milani, Inc., acquired 10 percent of Seida Corporation on January

Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2017, for $190,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2018, Milani purchased...

Q: Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1

Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2017. As of that date, Abernethy has the following trial balance: During 2017, Abernethy reported net...

Q: Maguire Company obtains 100 percent control over Williams Company. Several years

Maguire Company obtains 100 percent control over Williams Company. Several years after the takeover, consolidated financial statements are being produced. For each of the following accounts, briefly d...

Q: BuyCo, Inc. holds 25 percent of the outstanding shares of

BuyCo, Inc. holds 25 percent of the outstanding shares of Marqueen Company and appropriately applies the equity method of accounting. Excess cost amortization (related to a patent) associated with thi...

Q: On January 1, 2016, Halstead, Inc., purchased 75

On January 1, 2016, Halstead, Inc., purchased 75,000 shares of Sedgwick Company common stock for $1,480,000, giving Halstead 25 percent ownership and the ability to apply significant influence over Se...

Q: Echo, Inc., purchased 10 percent of ProForm Corporation on January

Echo, Inc., purchased 10 percent of ProForm Corporation on January 1, 2017, for $345,000 and accounted for the investment using the fair-value method. Echo acquires an additional 15 percent of ProForm...

Q: Following are selected account balances from Penske Company and Stanza Corporation as

Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018: On January 1, 2018, Penske acquired all of Stanza’s outstanding stock for...