Questions from Financial Accounting

Q: Reden Corporation purchased 45 percent of Montgomery Company’s common stock on January

Reden Corporation purchased 45 percent of Montgomery Company’s common stock on January 1, 20X9, at underlying book value of $288,000. Montgomery’s balance sheet contained the following stockholders’ e...

Q: Callas Corporation paid $380,000 to acquire 40 percent ownership

Callas Corporation paid $380,000 to acquire 40 percent ownership of Thinbill Company on January 1, 20X9. The amount paid was equal to Thinbill’s underlying book value. During 20X9, Thinbill reported o...

Q: Baldwin Corporation purchased 25 percent of Gwin Company’s common stock on January

Baldwin Corporation purchased 25 percent of Gwin Company’s common stock on January 1, 20X8, at underlying book value. In 20X8, Gwin reported a net loss of $20,000 and paid dividends of $10,000, and in...

Q: On December 31, 20X3, Broadway Corporation reported common stock outstanding

On December 31, 20X3, Broadway Corporation reported common stock outstanding of $200,000, additional paid-in capital of $300,000, and retained earnings of $100,000. On January 1, 20X4, Johe Company ac...

Q: Blank Corporation acquired 100 percent of Faith Corporation’s common stock on December

Blank Corporation acquired 100 percent of Faith Corporation’s common stock on December 31, 20X2, for $150,000. Data from the balance sheets of the two companies included the followin...

Q: When an existing company creates a new subsidiary and transfers a portion

When an existing company creates a new subsidiary and transfers a portion of its assets and liabilities to the new entity a. The new entity records both the assets and liabilities it received at fair...

Q: Trim Corporation acquired 100 percent of Round Corporation’s voting common stock on

Trim Corporation acquired 100 percent of Round Corporation’s voting common stock on January 1, 20X2, for $400,000. At that date, the book values and fair values of Roundâ€...

Q: Amber Corporation reported the following summarized balance sheet data on December 31

Amber Corporation reported the following summarized balance sheet data on December 31, 20X6: On January 1, 20X7, Purple Company acquired 100 percent of Amber’s stock for $500,000....

Q: On January 1, 20X3, Guild Corporation reported total assets of

On January 1, 20X3, Guild Corporation reported total assets of $470,000, liabilities of $270,000, and stockholders’ equity of $200,000. At that date, Bristol Corporation reported total assets of $190,...

Q: Potter Company acquired 90 percent of the voting common shares of Stately

Potter Company acquired 90 percent of the voting common shares of Stately Corporation by issuing bonds with a par value and fair value of $121,500 to Stately’s existing shareholders. Immediately prior...