Question: On January 1, 20X7, Pillow Corporation sold

> Plint Corporation exchanged shares of its $2 par common stock for all of Sark Company’s assets and liabilities in a planned merger. Immediately prior to the combination, Sark’s assets and liabilities were as follows: Assets Cash & Equivalents …………………………

> On January 1, 20X2, Prost Company acquired all of SKK Corporation’s assets and liabilities by issuing 24,000 shares of its $4 par value common stock. At that date, Prost shares were selling at $22 per share. Historical cost and fair val

> Peal Corporation issued 4,000 shares of its $10 par value stock with a market value of $85,000 to acquire 85 percent of the common stock of Seed Company on August 31, 20X3. Seed’s fair value was determined to be $100,000 on that date. Peal had earlier pu

> Plumb Company created Stew Company as a wholly owned subsidiary by transferring assets and accounts payable to Stew in exchange for its common stock. Stew recorded the following entry when it received the assets and accounts payable: Required: a. What

> Pun Corporation concluded the fair value of Slender Company was $60,000 and paid that amount to acquire its net assets. Slender reported assets with a book value of $55,000 and fair value of $71,000 and liabilities with a book value and fair value of $20

> Pagle Corporation established a subsidiary to enter into a new line of business considered to be substantially more risky than Pagle’s current business. Pagle transferred the following assets and accounts payable to Sand Corporation in

> Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 30,000 shares of $6 par value common stock. The following infor

> Pie Corporation acquired 80 percent of Slice Company’s common stock on December 31, 20X5, at underlying book value. The book values and fair values of Slice’s assets and liabilities were equal, and the fair value of th

> Pawn Corporation purchased 30 percent of Shop Company’s common stock on January 1, 20X5, by issuing preferred stock with a par value of $50,000 and a market price of $120,000. The following amounts relate to Shop’s bal

> Select the correct answer for each of the following questions. 1. On July 1, 20X3, Barker Company purchased 20 percent of Acme Company’s outstanding common stock for $400,000 when the fair value of Acme’s net assets wa

> Potter Corporation and its subsidiary reported consolidated net income of $164,300 for 20X2. Potter owns 60 percent of the common shares of its subsidiary, acquired at book value. Non controlling interest was assigned income of $15,200 in the consolidate

> Select the correct answer for each of the following questions. 1. What is the theoretically preferred method of presenting a non controlling interest in a consolidated balance sheet? a. As a separate item within the liability section. b. As a deduction f

> Summer Company sells all its output at 25 percent above cost. Parade Corporation purchases all its inventory from Summer. Selected information on the operations of the companies over the past three years is as follows: Parade acquired 60 percent of the

> Paint Corporation owns 60 percent of Stain Company’s shares. Partial 20X2 financial data for the companies and consolidated entity were as follows: On January 1, 20X2, Paint’s inventory contained items purchased from

> On January 1, 20X1, Prize Corporation paid Morton Advertising $116,200 to acquire 70 percent of Statue Company’s stock. Prize also paid $45,000 to acquire $50,000 par value 8 percent, 10-year bonds directly from Statue on that date. Thi

> Assume the same facts as in E8-8 but prepare entries using straight-line amortization of bond discount or premium. Data from E8-8: Suspect Company issued $600,000 of 9 percent first mortgage bonds on January 1, 20X1, at 103. The bonds mature in 20 year

> Punk Corporation purchased 90 percent of Soul Company’s voting common shares on January 1, 20X2, at underlying book value. At that date, the fair value of the non controlling interest was equal to 10 percent of the book value of Soul Co

> Packed Corporation owns 70 percent of Snowball Enterprises’ stock. On January 1, 20X1, Packed sold $1 million par value, 7 percent (paid semiannually), 20-year, first mortgage bonds to Kling Corporation at 97. On January 1, 20X8, Snowball purchased $300,

> Suspect Company issued $600,000 of 9 percent first mortgage bonds on January 1, 20X1, at 103. The bonds mature in 20 years and pay interest semiannually on January 1 and July 1. Prime Corporation purchased $400,000 of Suspect’s bonds from the original pu

> Suspect Company issued $600,000 of 9 percent first mortgage bonds on January 1, 20X1, at 103. The bonds mature in 20 years and pay interest semiannually on January 1 and July 1. Prime Corporation purchased $400,000 of Suspect’s bonds from the original pu

> Select the correct answer for each of the following questions. 1. [AICPA Adapted] Wagner, a holder of a $1,000,000 Palmer Inc. bond, collected the interest due on March 31, 20X8, and then sold the bond to Seal Inc. for $975,000. On that date, Palmer, a 7

> Proctor Corporation purchased bonds of its subsidiary from a non affiliate during 20X6. Although Proctor purchased the bonds at par value, a loss on bond retirement is reported in the 20X6 consolidated income statement as a result of the purchase. Requi

> Purse Corporation owns 70 percent of Scarf Company’s voting shares. On January 1, 20X3, Scarf sold bonds with a par value of $600,000 at 98. Purse purchased $400,000 par value of the bonds; the remainder was sold to non affiliates. The bonds mature in fi

> Stallion Corporation sold $100,000 par value, 10-year first mortgage bonds to Pony Corporation on January 1, 20X5. The bonds, which bear a nominal interest rate of 12 percent, pay interest semiannually on January 1 and July 1. The current market interest

> Sibling Company issued $500,000 par value, 10-year bonds at 104 on January 1, 20X3, which Mega Corporation purchased. The coupon rate on the bonds is 11 percent. Interest payments are made semiannually on July 1 and January 1. On July 1, 20X6, Parent Com

> Pepper Enterprises owns 95 percent of Salt Corporation. On January 1, 20X1, Salt issued $200,000 of five-year bonds at 115. Annual interest of 12 percent is paid semiannually on January 1 and July 1. Pepper purchased $100,000 of the bonds on July 1, 20X3

> 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 to Skine Company in exchange for 4,000 shares of $12

> 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, at 90. On January 1, 20X8, Short purchased $100,000 of

> 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 bonds mature in 10 years and pay interest semiannually 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 on January 1, 20X2, for $300,000. The truck is expect

> 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 purchased on January 1, 20X2, for $300,000. The truck is expe

> 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 warehouse on the property in 20X3. Required: a. Give the wor

> 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 considered to have a 15-year life from January 1, 20X2, and no

> 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 made payments of $58,000 to the subsidiary. Required

> 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 voting shares. Required: a. Give the worksheet consoli

> 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 of the book value of Seat Sales. Seat Sales reported s

> Plastic Corporation purchased management consulting services from its 75 percent-owned subsidiary, Spoon Inc. During 20X3, Plastic paid Spoon $123,200 for its services. For the year 20X4, Spoon billed Plastic $138,700 for such services and collected all

> Assume the same facts as in E8-7 but prepare entries using straight-line amortization of bond discount or premium. Data from E8-7: Suspect Company issued $600,000 of 9 percent first mortgage bonds on January 1, 20X1, at 103. The bonds mature in 20 year

> Passport Manufacturing purchased an ultrasound drilling machine with a remaining 10-year economic life from a 70 percent-owned subsidiary for $360,000 on January 1, 20X6. Both companies use straight-line depreciation. The subsidiary recorded the followin

> Select the correct answer for each of the following questions. 1. Upper Company holds 60 percent of Lower Company’s voting shares. During the preparation of consolidated financial statements for 20X5, the following consolidation entry w

> Plumber Corporation owns 60 percent of Socket Corporation’s voting common stock. On December 31, 20X4, Plumber paid Socket $276,000 for dump trucks Socket had purchased on January 1, 20X2. Both companies use straight-line depreciation.

> Pocket Corporation holds 70 percent of Strap Company’s voting common stock. On January 1, 20X2, Strap paid $300,000 to acquire a building with a 15-year expected economic life. Strap uses straight-line depreciation for all depreciable assets. On December

> Parent Company holds 90 percent of Surrogate Company’s voting common shares. On December 31, 20X8, Parent recorded a loss of $16,000 on the sale of equipment to Surrogate. At the time of the sale, the equipment’s estimated remaining economic life was eig

> Pea Company purchased 70 percent of Split Company’s stock approximately 20 years ago. On December 31, 20X8, Pea purchased a building from Split for $300,000. Split had purchased the building on January 1, 20X1, at a cost of $400,000 and used straight-lin

> Post Delivery Service acquired at book value 80 percent of the voting shares of Script Real Estate Company. On that date, the fair value of the non controlling interest was equal to 20 percent of Script’s book value. Script Real Estate reported common st

> Progeny Corporation owns 75 percent of Spawn Corporation’s voting common stock. Progeny reported income from its separate operations of $90,000 and $110,000 in 20X4 and 20X5, respectively. Spawn reported net income of $60,000 and $40,000 in 20X4 and 20X5

> Playoff Corporation holds 90 percent ownership of Series Company. On July 1, 20X3, Playoff sold equipment that it had purchased for $30,000 on January 1, 20X1, to Series for $28,000. The equipment’s original six-year estimated total economic life remains

> Photo Industries has owned 80 percent of Shutter Corporation for many years. On January 1, 20X6, Photo paid Shutter $270,000 to acquire equipment that Shutter had purchased on January 1, 20X3, for $300,000. The equipment is expected to have no scrap valu

> Pester Company transferred the following assets to a newly created subsidiary, Shumby Corporation, in exchange for 40,000 shares of its $3 par value stock Required: a. Give the journal entry in which Pester recorded the transfer of assets to Shumby Cor

> For each question, select the single best answer. 1. Water Company owns 80 percent of Fire Company’s outstanding common stock. On December 31, 20X9, Fire sold equipment to Water at a price in excess of Fire’s carrying

> Pie Bakery owns 60 percent of Slice Products Company’s stock. During 20X8, Slice produced 100,000 bags of flour, which it sold to Pie Bakery for $900,000. On December 31, 20X8, Pie had 20,000 bags of flour purchased from Slice Products on hand. Slice pri

> Planner Corporation owns 60 percent of Schedule Company’s voting shares. During 20X3, Planner produced 25,000 computer desks at a cost of $82 each and sold 10,000 of them to Schedule for $94 each. Schedule sold 7,000 of the desks to unaffiliated companie

> Planet Corporation acquired 90 percent of Saturn Company’s voting shares of stock in 20X1. During 20X4, Planet purchased 40,000 Play day doghouses for $24 each and sold 25,000 of them to Saturn for $30 each. Saturn sold 18,000 of the doghouses to retail

> Planet Corporation acquired 90 percent of Saturn Company’s voting shares of stock in 20X1. During 20X4, Planet purchased 40,000 Play day doghouses for $24 each and sold 25,000 of them to Saturn for $30 each. Saturn sold all of the doghouses to retail est

> Select the correct answer for each of the following questions. Amber Corporation holds 80 percent of the stock of Movie Productions Inc. During 20X4, Amber purchased an inventory of snack bar items for $40,000 and resold $30,000 to Movie Productions for

> Select the correct answer for each of the following questions. Lorn Corporation purchased inventory from Dresser Corporation for $120,000 on September 20, 20X1, and resold 80 percent of the inventory to unaffiliated companies prior to December 31, 20X1,

> Select the correct answer for each of the following questions. Blue Company purchased 60 percent ownership of Kelly Corporation in 20X1. On May 10, 20X2, Kelly purchased inventory from Blue for $60,000. Kelly sold all of the inventory to an unaffiliated

> Select the correct answer for each of the following questions. 1. During 20X3, Park Corporation recorded sales of inventory for $500,000 to Small Company, its wholly owned subsidiary, on the same terms as sales made to third parties. At December 31, 20X3

> Assume the same facts as in E8-6 except that the company uses straight-line amortization. Required Select the correct answer for each of the following questions. 1. What amount of interest expense should be included in the 20X4 consolidated income statem

> Power Products Corporation, which sells a broad line of home detergent products, owns 75 percent of the stock of Scrub Soap Company. During 20X8, Scrub sold soap products to Power Products for $180,000, which it had produced for $120,000. Power Products

> Plump Corporation holds 60 percent ownership of Slim Company. Each year, Slim purchases large quantities of a gnarl root used in producing health drinks. Slim purchased $150,000 of roots in 20X7 and sold $40,000 of these purchases to Plump for $60,000. B

> The December 31, 20X8, balance sheets for Pint Corporation and its 70 percent-owned subsidiary Saloon Company contained the following summarized amounts: Pint acquired the shares of Saloon Company on January 1, 20X7. On December 31, 20X8, assume Pint s

> Pistol Corporation acquired 70 percent of Scope Corporation’s voting stock on May 18, 20X1. The companies reported the following data with respect to intercompany sales in 20X4 and 20X5: Pistol reported operating income (excluding inc

> Player Company acquired 60 percent ownership of Scout Company’s voting shares on January 1, 20X2. During 20X5, Player purchased inventory for $20,000 and sold the full amount to Scout Company for $30,000. On December 31, 20X5, Scout&aci

> Pie Bakery owns 60 percent of Slice Products Company’s stock. On January 1, 20X9, inventory reported by Pie included 20,000 bags of flour purchased from Slice at $9 per bag. By December 31, 20X9, all the beginning inventory purchased from Slice Products

> Select the correct answer for each of the following questions: 1. Perez Inc. owns 80 percent of Senior Inc. During 20X2, Perez sold goods with a 40 percent gross profit to Senior. Senior sold all of these goods in 20X2. For 20X2 consolidated financial st

> Server Corporation is a majority-owned subsidiary of Proxy Corporation. Proxy acquired 75 percent ownership on January 1, 20X3, for $133,500. At that date, Server reported common stock outstanding of $60,000 and retained earnings of $90,000, and the fair

> Prophet Corporation acquired 75 percent of Seer Corporation’s voting common stock on December 31, 20X4, for $390,000. At the date of combination, Seer reported the following: At December 31, 20X4, the book values of Seerâ€&

> Professor Corporation acquired 70 percent of Scholar Corporation’s common stock on December 31, 20X4, for $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of

> Pale Company was established on January 1, 20X1. Along with other assets, it immediately purchased land for $80,000, a building for $240,000, and equipment for $90,000. On January 1, 20X5, Pale transferred these assets, cash of $21,000, and inventory cos

> Problem Company owns 90 percent of Solution Dairy’s stock. The balance sheets of the two companies immediately after the Solution acquisition showed the following amounts: The fair value of the non controlling interest at the date of

> Statue Corporation’s balance sheet at January 1, 20X7, reflected the following balances: Prize Corporation entered into an active acquisition program and acquired 80 percent of Statue’s common stock on January 2, 20X

> On June 10, 20X8, Private Corporation acquired 60 percent of Secret Company’s common stock. The fair value of the non controlling interest was $32,800 on that date. Summarized balance sheet data for the two companies immediately after t

> Select the correct answer for each of the following questions. 1. A 70 percent owned subsidiary company declares and pays a cash dividend. What effect does the dividend have on the retained earnings and non controlling interest balances in the parent com

> On December 31, 20X4, Puzzle Corporation acquired 90 percent of Sunday Inc.’s common stock for $864,000. At that date, the fair value of the non controlling interest was $96,000. Of the $240,000 differential, $5,000 related to the increased value of Sund

> Putt Corporation acquired 80 percent of Slice Company’s voting common stock on January 1, 20X4, for $138,000. At that date, the fair value of the noncontrolling interest was $34,500. Slice’s balance sheet at the date o

> Purse Corporation acquired 70 percent of Scarf Corporation’s ownership on January 1, 20X8, for $140,000. At that date, Scarf reported capital stock outstanding of $120,000 and retained earnings of $80,000, and the fair value of the non controlling intere

> Purple Corporation acquired 75 percent of Socks Corporation’s common stock on January 1, 20X8, for $435,000. At that date, Socks reported common stock outstanding of $300,000 and retained earnings of $200,000, and the fair value of the

> This exercise is a continuation of E5-13. Proud Corporation acquired 80 percent of Spirited Company’s voting stock on January 1, 20X3, at underlying book value. The fair value of the non controlling interest was equal to 20 percent of t

> Proud Corporation acquired 80 percent of Spirited Company’s voting stock on January 1, 20X3, at underlying book value. The fair value of the non controlling interest was equal to 20 percent of the book value of Spirited at that date. As

> Select the correct answer for each of the following questions. 1. Popper Company established a subsidiary and transferred equipment with a fair value of $72,000 to the subsidiary. Popper had purchased the equipment with a 10-year expected life 4 years ea

> Server Corporation was created on January 1, 20X0, to develop computer software. On January 1, 20X5, Proxy Company acquired 90 percent of Server’s common stock at its underlying book value. At that date, the fair value of the noncontrol

> You want to produce three 1.00-mm-diameter cylindrical wires, each with a resistance of 1.00 Ω at room temperature. One wire is gold, one is copper, and one is aluminum. Refer to Table 25.1 for the resistivity values. Table 25.1: (a). Wha

> Copper has 8.5 × 1028 free electrons per cubic meter. A 71.0-cm length of 12-gauge copper wire that is 2.05 mm in diameter carries 4.85 A of current. (a). How much time does it take for an electron to travel the length of the wire? (b). Repeat part (a)

> An 18-gauge copper wire (diameter 1.02 mm) carries a current with a current density of 3.20 × 106 A/m2. The density of free electrons for copper is 8.5 × 1028 electrons per cubic meter. Calculate (a). the current in the wire and (b). the drift velocity

> A 5.00-A current runs through a 12-gauge copper wire (diameter 2.05 mm) and through a light bulb. Copper has 8.5 × 1028 free electrons per cubic meter. (a). How many electrons pass through the light bulb each second? (b). What is the current density in

> A parallel-plate capacitor has plates with area 0.0225 m2 separated by 1.00 mm of Teflon. (a). Calculate the charge on the plates when they are charged to a potential difference of 12.0 V. (b). Use Gauss’s law (Eq. 24.23) to calculate the electric fiel

> A parallel-plate capacitor has capacitance C0 = 8.00 pF when there is air between the plates. The separation between the plates is 1.50 mm. (a). What is the maximum magnitude of charge Q that can be placed on each plate if the electric field in the regi

> A parallel-plate capacitor has capacitance C = 12.5 pF when the volume between the plates is filled with air. The plates are circular, with radius 3.00 cm. The capacitor is connected to a battery, and a charge of magnitude 25.0 pC goes onto each plate. W

> When a 360-nF air capacitor (1 nF = 10-9 F) is connected to a power supply, the energy stored in the capacitor is 1.85 × 10-5 J. While the capacitor is kept connected to the power supply, a slab of dielectric is inserted that completely fills the space b

> Polystyrene has dielectric constant 2.6 and dielectric strength 2.0 × 107 V/m. A piece of polystyrene is used as a dielectric in a parallel-plate capacitor, filling the volume between the plates. (a). When the electric field between the plates is 80% of

> The charged plates of a capacitor attract each other, so to pull the plates farther apart requires work by some external force. What becomes of the energy added by this work? Explain.

> A constant potential difference of 12 V is maintained between the terminals of a 0.25-µF, parallel-plate, air capacitor. (a) A sheet of Mylar is inserted between the plates of the capacitor, completely filling the space between the plates. W

> Some cell walls in the human body have a layer of negative charge on the inside surface and a layer of positive charge of equal magnitude on the outside surface. Suppose that the charge density on either surface is ±0.50 × 10-3 C/m2, the cell wall is 5.0

> The dielectric to be used in a parallel-plate capacitor has a dielectric constant of 3.60 and a dielectric strength of 1.60 × 107 V/m. The capacitor is to have a capacitance of 1.25 × 10-9 F and must be able to withstand a maximum potential difference of

> A budding electronics hobbyist wants to make a simple 1.0-nF capacitor for tuning her crystal radio, using two sheets of aluminum foil as plates, with a few sheets of paper between them as a dielectric. The paper has a dielectric constant of 3.0, and the

> Two parallel plates have equal and opposite charges. When the space between the plates is evacuated, the electric field is E = 3.20 × 105 V/m. When the space is filled with dielectric, the electric field is E = 2.50 × 105 V/m. (a). What is the charge de

> A parallel-plate air capacitor has a capacitance of 920 pF. The charge on each plate is 3.90 µC. (a). What is the potential difference between the plates? (b). If the charge is kept constant, what will be the potential difference if the plate separation

> A 0.350-m-long cylindrical capacitor consists of a solid conducting core with a radius of 1.20 mm and an outer hollow conducting tube with an inner radius of 2.00 mm. The two conductors are separated by air and charged to a potential difference of 6.00 V

> For the capacitor network shown in Fig. E24.29, the potential difference across ab is 220 V. Find Fig. E24.29: (a). the total charge stored in this network; (b). the charge on each capacitor; (c). the total energy stored in the network; (d). the ene