Questions from Financial Accounting

Q: Passenger Products purchased 65 percent of Seat Sales Company’s stock at underlying

Passenger Products purchased 65 percent of Seat Sales Company’s stock at underlying book value on January 1, 20X3. At that date, the fair value of the non controlling interest was equal to 35 percent...

Q: Paragraph Corporation purchased land on January 1, 20X1, for $

Paragraph Corporation purchased land on January 1, 20X1, for $20,000. On June 10, 20X4, it sold the land to its subsidiary, Sentence Corporation, for $30,000. Paragraph owns 60 percent of Sentence’s v...

Q: On January 1, 20X5, Potter Corporation started using a wholly

On January 1, 20X5, Potter Corporation started using a wholly owned subsidiary to deliver all its sales overnight to its customers. During 20X5, Potter recorded delivery service expense of $76,000 and...

Q: Pam Corporation holds 70 percent ownership of Spray Enterprises. On December

Pam Corporation holds 70 percent ownership of Spray Enterprises. On December 31, 20X6, Spray paid Pam $40,000 for a truck that Pam had purchased for $45,000 on January 1, 20X2. The truck was considere...

Q: Paste Corporation owns 70 percent of Stick Corporation’s voting common stock.

Paste Corporation owns 70 percent of Stick Corporation’s voting common stock. On March 12, 20X2, Stick sold land it had purchased for $140,000 to Paste for $185,000. Paste plans to build a new warehou...

Q: Pitcher Corporation purchased 60 percent of Softball Corporation’s voting common stock on

Pitcher Corporation purchased 60 percent of Softball Corporation’s voting common stock on January 1, 20X1. On December 31, 20X5, Pitcher received $210,000 from Softball for a truck Pitcher had purchas...

Q: Pitcher Corporation purchased 60 percent of Softball Corporation’s voting common stock on

Pitcher Corporation purchased 60 percent of Softball Corporation’s voting common stock on January 1, 20X1. On January 1, 20X5, Pitcher received $245,000 from Softball for a truck Pitcher had purchased...

Q: Pretzel Corporation owns 60 percent of Stick Corporation’s voting shares. On

Pretzel Corporation owns 60 percent of Stick Corporation’s voting shares. On January 1, 20X2, Pretzel Corporation sold $150,000 par value, 6 percent first mortgage bonds to Stick for $156,000. The bon...

Q: Par Corporation holds 60 percent of Short Publishing Company’s voting shares.

Par Corporation holds 60 percent of Short Publishing Company’s voting shares. Par issued $500,000 of 10 percent (paid semiannually) bonds with a 10-year maturity on January 1, 20X2,...

Q: Phoster Corporation established Skine Company as a wholly owned subsidiary. Phoster

Phoster Corporation established Skine Company as a wholly owned subsidiary. Phoster reported the following balance sheet amounts immediately before and after it transferred assets and accounts payable...