Questions from Financial Accounting

Q: Pot Company acquired 65 percent of Seed Corporation’s voting common stock on

Pot Company acquired 65 percent of Seed Corporation’s voting common stock on June 20, 20X2, at underlying book value. At that date, the fair value of the noncontrolling interest was...

Q: Using the data in P7-33, on December 31,

Using the data in P7-33, on December 31, 20X7, Prime Company recorded the following entry on its books to adjust its investment in Suspect Company from the fully adjusted equity method to the modified...

Q: Plug Corporation purchased $100,000 par value bonds of its

Plug Corporation purchased $100,000 par value bonds of its subsidiary, Spark Company, on December 31, 20X5, from Lemon Corporation for $102,800. The 10-year bonds bear a 9 percent coupon rate, and Spa...

Q: Pea Corporation acquired 80 percent of Split Company’s stock on January 1

Pea Corporation acquired 80 percent of Split Company’s stock on January 1, 20X1, at underlying book value. At that date, the fair value of the non controlling interest was equal to 2...

Q: School Perfume Company issued $300,000 of 10 percent bonds

School Perfume Company issued $300,000 of 10 percent bonds on January 1, 20X2, at 110. The bonds mature 10 years from issue and have semiannual interest payments on January 1 and July 1. Parsons Corpo...

Q: Purple Manufacturing purchased 60 percent of the ownership of Socks Corporation stock

Purple Manufacturing purchased 60 percent of the ownership of Socks Corporation stock on January 1, 20X1, at underlying book value. At that date, the fair value of the non controlling interest was equ...

Q: Patio Corporation owns 60 percent of the stock of Stone Container Company

Patio Corporation owns 60 percent of the stock of Stone Container Company, which it acquired at book value in 20X1. At that date, the fair value of the non controlling interest was equal to 40 percent...

Q: Puzzle Corporation purchased 75 percent of Sunday Company’s common stock at underlying

Puzzle Corporation purchased 75 percent of Sunday Company’s common stock at underlying book value on January 1, 20X3. At that date, the fair value of the non controlling interest was...

Q: Private Manufacturing Company acquired 90 percent of Secret Corporation’s outstanding common stock

Private Manufacturing Company acquired 90 percent of Secret Corporation’s outstanding common stock on December 31, 20X5, for $1,152,000. At that date, the fair value of the non contr...

Q: Select the correct answer for each of the following questions.

Select the correct answer for each of the following questions. 1. Companies often acquire ownership in other companies using a variety of ownership arrangements. The investor should use equity-method...