Book: Advanced Accounting Chapter 3

Joe Ben Hoyle

1) CCES Corporation acquires a controlling interest in Schmaling, Inc. CCES may utilize any one of three methods to internally account for this investment. Describe each of these methods, and indicate their advantages and disadvantages.

2) Maguire Company obtains 100 percent control over Williams Company. Several years after the takeover, consolidated financial statements are being produced. For each of the following accounts, briefly describe the values that should be included in consolidated totals.

a. Equipment.

b. Investment in Williams Company.

c. Dividends Declared.

d. Goodwill.

e. Revenues.

f. Expenses.

g. Common Stock.

h. Net Income.