Premium Essay

Advance Accounting

In: Business and Management

Submitted By Waelelmgirbi
Words 637
Pages 3
Problem 14
Year 9 income statements P Company S Company
Sales 630,000 340,000
Interest income 1,850
Investment income 15,339
Gain on sale of land 7,000 Total revenues 652,339 341,850
Cost of sales 485,000 300,000
Interest expense 17,000
Selling and admin. expense 50,000 20,000
Income tax expense 34,000 8,740 Total expenses 586,000 328,740
Net income 66,339 13,110

Bonds payable – P Company
Issued Jan. 1, Year 2 200,000 (a)
Discount Jan. 1, Year 2 10,000)
Amortized – Years 2 to 8 (10,000 / 10 ( 7) (7,000) – to July 1, Year 9 (1,000 ( ½) (500) 2,500
Balance, July 1, Year 9 197,500 (b)
Discount amortization July to Dec., Year 9 500
Balance, Dec. 31, Year 9 198,000

Investment in bonds – S Company
Par value July 1, Year 9 40,000
Purchase discount, July 1, Year 9 (40,000 – 38,750) 1,250)
Amortized, Year 9 (1,250 / 2½ ( ½) (250) (c) 1,000
Balance, Dec. 31, Year 9 39,000
Cost of intercompany bonds July 1, Year 9 38,750
Par value 40,000
Gain on bond – S Company (before tax) 1,250 (d)

Par value, July 1, Year 9 40,000
Book value ((b) 197,500 ( 20%) 39,500
Loss on bonds – P Company (before tax) 500 (e)

Gain to entity, July 1, Year 9 ((d) 1,250 – (e) 500) 750 (f)

Before tax 40% tax After tax
Entity
Gain July 1, Year 9 (f) 750 300 450
Interest elimination gain Year 9* 150 60 90 (g)
Balance gain Dec. 31, Year 9 600 240 360 (h)

P Company
Gain (loss) July 1, Year 9 (e) (500) (200) (300)
Interest elimination gain (loss) Year 9* (100) (40) (60)
Balance gain (loss), Dec. 31, Year 9 (400) (160) (240) (i)

S Company
Gain July 1, Year 9 (d) 1,250 500 750
Interest elimination gain Year 9* 250 100 150
Balance gain Dec. 31, Year 9 1,000 400 600 (j)

* ½ year amortization, 2½ years to maturity

Intercompany revenues and…...

Similar Documents

Free Essay

Advance Accounting 1 Solman

...Law 1 – Annulment Case SP. PROC. CASE No. ONA-1005 For Annulment/Declaration of Nullity of Marriage The annulment case happens in the Philippines that will be mention stated below of this sentence. This happened in the Regional Trial Court in the 7th Judicial Region Branch 25, Danao City in Cebu. SUMMONS BY PUBLICATION ANTONIO A GULTIANO,JR.- No. 662 Ipag Mariveles, Bataan WHEREAS on December 02, 2010, petitioner through counsel filed with this court a complaint as follows: COMPLAINT PETITIONER, by counsel unto this Honorable court, respectfully states under oath that: Petitioner Hazel A. Escosio-Gultiano is a Filipino of legal age, married and a resident of Goldenville countryside Homes, Santo Niño, Barangay Sabang, Danao City, Cebu. She is represented in the instant action by the undersigned counsel whom she may be served with notices and other court processes. Respondent Antonio A. Gultiano, Jr. is a Filipino, of legal age, married and a resident of 662 Mariveles, Bataan, where he may be served with summons and other court processes; Petitioner’s selfelss sacrifices to save her family resulted her subjection to emotional and psychological abuse from the respondent. Respondent’s intolerablecharacter and moral defect were already beyong the stretch of petitoner’s patience. Thus petitioner pursued any means of raising a child through the help of parents in order to scratch a living away from home. Such identified personality traits or mental problems is the......

Words: 479 - Pages: 2

Free Essay

Advance Accounting

...Writing Methodology To: Pastor and his wife Date: February 10, 2013 Facts: TICKET TO HEAVEN Your client a pastor has not filed tax returns for 2010, 2009, 2008, 2007, 2006, 2005, and 2004. He is married. Their combined income is follows: | |Wife |Pastor |Parsonage Allowance | |2004 |15500 |22000 |8500 | |2005 |16000 |24000 |8700 | |2006 |16500 |26000 |9500 | |2007 |16500 |30000 |12000 | |2008 |20100 |35000 |18000 | |2009 |25000 |38500 |24000 | |2010 |26500 |42000 |30000 | Pastor built his own home in 2008 and there was no mortgage on the house. He has promised you that if make him clean with the IRS, he will guarantee you a place in heaven. Law and Analysis: Publication 517 Social Security and Other Information for Members of the Clergy and Religious Workers Ministerial Services Ministerial service, in general, is......

Words: 3527 - Pages: 15

Premium Essay

Advance Accounting

... Use the following information in answering questions 12 and 13. Manet Corporation exchanges 150,000 shares of newly issued $1 value common stock with a fair market value of $25 per share for of the outstanding $5 par value common stock of Gardner Inc Gardner is then dissolved. Manet paid the following costs expenses related to the business combination: Costs of special shareholders’ meeting to vote on the merger Registering and issuing securities Accounting and legal fees Salaries of Manet’s employees assigned to the implementation of the merger Cost of closing duplicate facilities par all and and $13,000 14,000 9,000 15,000 11,000 12. In the business combination of Manet and Gardner a. the costs of registering and issuing the securities are included as part of the purchase price for Gardner. b. only the salaries of Manet's employees assigned to the merger are treated as expenses. c. all of the costs except those of registering and issuing the securities are included in the purchase price of Gardner. d. only the accounting and legal fees are included in the purchase price of Gardner. 13. In the business combination of Manet and Gardner a. all of the items listed above are treated as expenses. b. all of the items listed above except the cost of registering and issuing the securities are expensed. c. the costs of registering and issuing the securities are deducted from the fair market value of the common stock used to acquire Gardner. d. only the costs of......

Words: 3667 - Pages: 15

Premium Essay

Advance Managerial Accounting

...ACCT3039 Advanced Managerial Accounting Graded Tutorial Activity No.3 Worth 5% of the overall grade Due by March 19th 2014. N.B. Students should note that this tutorial assignment should be submitted on a Word document by the due date stated above at the appropriate drop box on the Learning exchange. H is an investment group which owns a number of subsidiary companies. Each subsidiary produces a particular product, product range or service. For the purposes of management control, subsidiaries are organised into 3 sectors. 1) Consulting and Services (CS): comprising a consultancy practice which provides advice on product design, manufacturing technique and material usage both to H group companies as well as businesses outside the group. Salaries comprise about 95% of the costs in CS sector. 2) Heavy Engineering (HE): comprising 2 subsidiary companies producing machinery, equipment and tools used in a variety of industrial applications. These companies require a major investment in the form of factory premises, plant and transport facilities. 3) Light Engineering (LE): comprising 4 subsidiaries which produce a range of small mechanical and electrical components, many of which are designed into the products of HE sector companies. The production of these components is generally considered to be labour intensive. At the start of 2012 the management of H decides to prepare a five year plan strategic plan for the group. A team of H executives is assembled to prepare this plan. At......

Words: 429 - Pages: 2

Premium Essay

Advance Accounting

...|1a) |  |  |  | | | | |Colton Company Sales | |300,000 | | | | | |Mota Company Sales | |172,000 | | | | | | | |472,000 | | | | | |2008 Colton Sales |-50,000 | | | | | | |2008 Mota Sales |-100,000 | | | | | | | | |-150,000 | | | | | |Sales reported in 2008 | |322,000 | | | | | |  |  |  |  |  |  | | |1b) | | | | | | ......

Words: 660 - Pages: 3

Free Essay

Advance Management Accounting

...VMWM Research Department, March 31, 2014 WEEKLY STOCK PICKS Disclaimer: The following stock picks are for information purposes only. The information stated herein may reflect the opinion and views of VM Wealth Management in relation to market conditions and does not constitute any representation or warranties in relation to investment returns and the credibility of the sources of information relied upon in the preparation of this report, without further research and verification. Before making any investment decision, please consult a VM Wealth Management Advisor. STOCK STOCK DATA LAST TRADED PRICE: $18.05 4 WEEK PRICE MOVEMENT NCBJ RECOMMENDATION & RATIONALE RECOMMENDATION: BUY RATIONALE: The Company reported relatively flat earnings for the 3 months ended Dec 31. However, our outlook for NCBJ over the medium- to long-term is positive on the basis of an improving economy and ongoing structural changes at the Company, which could lower operating costs. NCBJ National Commercial Bank Jamaica YTD CHANGE: 0.28% P/E RATIO: 5.16x 20 19 18 17 P/B RATIO: 0.61x LAST TRADED PRICE: J$8.60 YTD CHANGE: 2.14% DCOVE Dolphin Cove Ltd P/E RATIO: 13.29x DCOVE 9 8.5 8 RECOMMENDATION: BUY RATIONALE: The majority of the Company's income is in US currency, which provides a good currency hedge for investors. The improving global economy should also provide tailwinds. The Company’s continuing expansion plans should continue to result in significant revenue and...

Words: 1566 - Pages: 7

Premium Essay

Advance Accounting Chapter 10

...CHAPTER 10 SUGGESTED ANSWERS EXERCISES Exercise 10 - 1 |1. Assets, other than goodwill |550,000 | | | Goodwill |196,000 | | | Liabilities | |230,000 | | Ordinary Share Capital | |516,000 | | | |Co. A |Co. B |Co. C |Total | | |Net asset contribution |P 90,000 |P120,000 |P110,000 |P320,000 | | |Goodwill contribution | | | | | | | Average earnings |P 16,000 |P 20,000 |P 22,000 | | | | Normal earnings | 10,800 | 14,400 | 13,200 | | | | Excess earnings |P 5,200 |P 5,600 |P 8,800 | | | | Capitalization rate | 10% | ...

Words: 2470 - Pages: 10

Premium Essay

Advance Accounting

... | |determining the fair value of the consideration given and in allocating the total implied fair value to specific assets and liabilities. | | | |In the case of a less than wholly owned company, valuation of net assets at implied fair value violates the cost principle of conventional accounting | |and results in the reporting of subsidiary assets and liabilities using a different valuation procedure than that used to report the assets and | |liabilities of the parent company. | |14. The economic entity is more consistent with the principles addressed in the FASB’s conceptual framework. It is an integral part of the FASB’s | |conceptual framework and is named specifically in SFAC No. 5 as one of the basic assumptions in accounting. The economic entity assumption views | |economic activity as being related to a particular unit of accountability, and the standard indicates that a parent and its subsidiaries represent one | |economic entity even though they may include several legal entities. | |15. The FASB’s conceptual framework provides the guidance for new standards. The quality of......

Words: 2271 - Pages: 10

Premium Essay

Advance Accounting

...information on a company’s investments in equity securities to answer questions 1- 4 below. The company’s accounting year ends December 31. | |Date of acquisition|Cost |Fair value |Date sold |Selling price | |Investment | | |12/31/10 | | | |Ajax Company stock |6/20/10 |$40,000 |$36,000 |2/10/11 |$34,000 | |Bril Corporation stock |5/1/10 | 20,000 |N/A |11/15/10 | 23,000 | |Coy Company stock |8/2/10 | 16,000 | 19,500 |1/17/11 | 21,000 | 1. Topic: Accounting for trading securities LO 2 If the above investments are categorized as trading securities, what amount is reported for gain or loss on securities, on the 2010 income statement? a. $3,000 gain b. $2,500 gain c. $4,000 loss d. No gain or loss ANS: b 2. Topic: Accounting for trading securities LO 2 If the above investments are categorized as trading securities, what amount is reported for gain or loss on securities, on the 2011 income statement? a. $1,000 loss b. $2,000 gain c. $3,000 gain d. $500 loss ANS: d 3. Topic: Accounting for AFS securities LO 2 If the above investments are categorized as......

Words: 8706 - Pages: 35

Premium Essay

Advance Financial Accounting

...HONG KONG POLYTECHNIC UNIVERSITY School of Accounting and Finance AF 4331 Business Valuation 2015/2016 Semester One Course Outline Subject Code : AF4331 Subject Title : Business Valuation Level : 4 Credits : 3 Mode of Study : Seminars 39 hours Pre-requisites : Corporate Finance (AF4320) Instructor ; Emmie SIU Office Phone : 27666340 E-mail : emmie.siu@polyu.edu.hk Consultation : Monday 2:30 pm to 6:30 pm Role and Purpose This subject aims to introduce an analytical framework for carrying out business analysis and valuation by using financial statements for valuing different kind of businesses. It contributes to the achievement of the BBA Programme Outcomes by enabling students to identify and resolve ethical issues contained in the financial statements (Outcome 4), apply basic accounting and financial theories to analyze financial reports and to identify potential problems and risks (Outcome 7). By the end of this subject, students will become a professional user of financial statements to advance further into the field of business valuation as investment analysis. It requires students to present and communicate effectively in English for general business communication (Outcome 1). Learning Outcomes Upon completion of the subject, students will be able to: a. Develop the ability to......

Words: 1507 - Pages: 7

Premium Essay

Advance

...Advance Directives Catherine Miller IRSC Ethical/Legal Issues NUR3826 Carol Amole, Debra Cornwell, Susan Wise December 1, 2015 Advance Directives An 89 year old patient came to the emergency room from a nursing home. Per the nursing home staff, the patient had a “floppy leg” and grimaced when that leg was moved. The patient’s advance directive paperwork was provided. The patient is non-verbal. An advance directive is a document composed by competent patient’s that ensure the right of self-determination: the right of every person to make their own decisions about their medical treatment, including the right to refuse treatment (Martin, 2013). As the primary nurse for the patient, I felt it was my responsibility to inform all the medical staff that was involved in her care of the presence of the advance directives. The doctor was the first to be informed. The advance directive is a written instruction recognized under state law relating to provision of such care when the patient is incapacitated (Martin, 2013). The paperwork that was provided was a DNR status, and also a Durable Power of Attorney, naming her husband. A Durable Power of Attorney is a document that allows a patient to designate a person to make decisions about their health care in a case where they are not able to make decisions themselves. It gives some direction about the kinds of medical treatment they want ("Understanding," n.d.). When my patient’s husband arrived to the emergency......

Words: 630 - Pages: 3

Free Essay

It Advances

...IT Advances Cause Acts to Be Created Telemarketers have been interrupting individuals for ages. Telemarketers call anytime, wanting individuals to donate, vote for or against, and purchase items. In an effort to address a growing number of telephone marketing calls, Congress enacted in 1991 the Telephone Consumer Protection Act (TCPA) (FCC, 8/02). Within 11 years after the creation of the TCPA Act, the Do Not Call Implementation Act, 2003 was created. The Do Not Call Implementation Act, 2003 goes hand-in-hand with the TCPA. The Do Not Call Implementation Act limits the phone numbers telemarketers are allowed to call. Telemarketers were using autodialing and pre recorded messages to make their pitches to individuals throughout the United States. No matter the time or day these calls would constantly make the phone ring. The Telephone Consumer Protection Act, 1991 protects these individuals from receiving these types of calls. The telemarketing companies can only call from eight A.M. to nine P.M. The telemarketing company’s received strict rules toward their auto dialing machines. The companies must announce their name and give the name and address of the business they are calling for. Calls are not allowed to be made with phony voices, no recordings to cell phones, and the individual cannot be charged for the call. Telemarketing companies are subject to fines ranging from $500 to $1,500 for each violation. In 2003 the national Do not Call Registry was created....

Words: 483 - Pages: 2

Premium Essay

Advance Accounting

...method investment account | Equity investment account balance at January 1, 2013: | Jan. 1, 2013 | | | $453,600 | (1) 90% x ($225,000 + $124,000 + $155,000) | Plus: | 198,000 | (2) $198,000 (from part a.) | Less: | (32,400) | (3) 100% x $32,400 (from part b.) | Less: | 0 | (4) 90% x $0 (from part b.) | | $619,200 | | Equity investment account balance at December 31, 2013: | Dec. 31, 2013 | | | $561,600 | (1) 90% x ($345,000 + $124,000 + $155,000) | Plus: | 180,000 | (2) $180,000 (from part a.) | Less: | (28,800) | (3) 100% x $28,800 (from part b.) | Less: | 0 | (4) 90% x $0 (from part b.) | | $712,800 | | | | | d. Full equity method investment accounting includes the following routine adjustments during any given period: (1) recognition of p% of the subsidiary’s income, (2) amortization of the p% AAP, (3) recognition of p% of the dividends declared by the subsidiary, (4) recognition of prior period deferred intercompany profits that have been confirmed though either transactions with unaffiliated parties or depreciation/amortization, and (5) deferral of intercompany profits newly originating during the current period. With respect to the deferred intercompany profits, the effect on the equity investment account is 100% for downstream transactions and p% for upstream transactions. Information for items (1) and (2) is available in the initial information, information for item (3) was...

Words: 22760 - Pages: 92

Free Essay

Advances in Management Accounting

...Institute and State University, Blacksburg, VA, USA School of Management, University of Michigan-Dearborn, MI, USA College of Business Administration, San Diego State University, San Diego, CA, USA Department of Accounting, University of Arkansas at Little Rock, AR, USA Zicklin School of Business, CUNY – Baruch College, New York, NY, USA Belk College of Business, University of North Carolina at Charlotte, NC, USA College of Business and Economics, West Virginia University, Morgantown, WV, USA RSM Erasmus University, Department of Financial Management, Rotterdam, The Netherlands Mohamed E. Bayou Chee W. Chow Cynthia M. Daily Harry Z. Davis Nabil Elias Arron Scott Fleming Frank G. H. Hartmann vii viii LIST OF CONTRIBUTORS Fred A. Jacobs Frances Kennedy James M. Kohlmeyer, III Leslie Kren John Y. Lee Michael S. Luehlfing Adam S. Maiga School of Accountancy, Georgia State University, Atlanta, GA, USA Department of Accountancy and Legal Studies, Clemson University, SC, USA College of Business, East Carolina University, Greenville, NC, USA School of Business, University of Wisconsin, Milwaukee, WI, USA Lubin School of Business, Pace University, Pleasantville, NY, USA School of Professional Accountancy, Louisiana Tech University, LA, USA School of Accounting, Florida International University, Miami, FL, USA I.H. Asper School of Business, University of Manitoba, Winnipeg, Canada School of Professional Accountancy, Louisiana Tech University, Ruston, LA, USA......

Words: 111886 - Pages: 448

Free Essay

It Advances

...One of the best careers to get into is information technology (IT). Information technology is the use of telecommunications and computers to retrieve, store, transmit, and manipulate information. “The world of information technology is constantly changing. Whether you’re a developer for a large company or a small company, in a management position, freelancing or anything else, the world of IT is changing all the time” (Complete IT Professional). Because of certain advances in IT, new ethical issues often arise. An ethical issue, according to businessdictionary.com, is “a problem or situation that requires a person or organization to choose between alternatives that must be evaluated as right (ethical) or wrong (unethical).” Often, it is extremely necessary to protect the people from wrong. In 1978, the Electron Funds Transfer was created. More recently, in 2003, the Do Not Call Implementation Act was created. There were advances in IT that resulted in new ethical issues necessitating the creation of each act. Credit and debit cards have been replacing paper checks at a fast growing rate. This means that the paper evidence that checks offer is descending. ATMs and electronic banking is taking over because it is so convenient. “The explosion of electronic financial transactions created a new need for rules that would give consumers the same level of confidence that they had in the checking system” (investopedia). In the late 70s,...

Words: 561 - Pages: 3