Questions from Advanced Accounting


Q: Pam Corporation acquired a 70 percent interest in Sun Corporation’s outstanding voting

Pam Corporation acquired a 70 percent interest in Sun Corporation’s outstanding voting common stock on January 1, 2016, for $980,000 cash. The stockholders’ equity...

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Q: How are the workpaper procedures for the investment in subsidiary, income

How are the workpaper procedures for the investment in subsidiary, income from subsidiary, and subsidiary’s stockholders’ equity accounts alike?

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Q: If a parent uses the equity method but does not amortize the

If a parent uses the equity method but does not amortize the difference between fair value and book value on its separate books, its net income and retained earnings will not equal its share of consol...

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Q: Son Corporation’s outstanding capital stock (and paid in capital) has

Son Corporation’s outstanding capital stock (and paid in capital) has been $200,000 since the company was organized in 2016. Son’s retained earnings account since 2...

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Q: Are workpaper adjustments and eliminations entered on the parent’s books? The

Are workpaper adjustments and eliminations entered on the parent’s books? The subsidiary’s books? Explain.

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Q: The financial statement and trial balance workpaper approaches illustrated in the chapter

The financial statement and trial balance workpaper approaches illustrated in the chapter generate comparable information, so why learn both approaches?

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Q: When is it necessary to adjust the parent’s retained earnings account in

When is it necessary to adjust the parent’s retained earnings account in the preparation of consolidation workpapers? In answering this question, explain the relationship between parent-retained earni...

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Q: What approach would you use to check the accuracy of the consolidated

What approach would you use to check the accuracy of the consolidated retained earnings and noncontrolling interest amounts that appear in the balance sheet section of completed consolidation workpape...

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Q: Controlling share of consolidated net income is a measurement of income to

Controlling share of consolidated net income is a measurement of income to the stockholders of the parent, but does a change in cash as reflected in a statement of cash flows also relate to other stoc...

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Q: Can the method used by a parent company in accounting for its

Can the method used by a parent company in accounting for its subsidiary investments be determined by examining the separate financial statements of the parent and subsidiary companies?

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