Question 1: Pampas Inc. owns 19,000 shares of Sierra Company (which is 95% of its outstanding...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/665592f0574fa_208665592f05001d.jpg)
Transcribed Image Text:
Question 1: Pampas Inc. owns 19,000 shares of Sierra Company (which is 95% of its outstanding common shares) and accounts for its investment using the equity method. On December 31, 2015, Sierra Company's shareholders' equity consisted of common shares of $200,000 and retained earnings of $340,000. On that date, the balance in Pampas' investment in Sierra Company account was $640,000. The acquisition differential at that date was allocated 50% to land, 25% to some equipment with a remaining useful life of five years and rest to goodwill. During 2016, Sierra Company reported a net income of $300,000 and declared and paid dividends of $140,000. On January 1, 2016, Pampas sold 3,800 of its shares in Sierra Company for proceeds of $133,000. Pampas values the non-controlling interest in its subsidiary at its fair value, proportionate to the price paid for its controlling interest. Required: a) Calculate the non-controlling interest in Sierra Company that would be included in Pampas Inc.'s consolidated balance sheet at December 31, 2016. b) Calculate the non-controlling interest in the consolidated net income of Pampas and its subsidiary for the year ended December 31, 2016. Question 2: Pueblo Corporation acquired a 70% interest in Hacienda Limited on January 1, 2018, for $196,000 when Hacienda had common shares of $200,000 and retained earnings of $40,000. Half of the acquisition differential was allocated to capital assets with a remaining useful life of five years on that date with the balance of the acquisition differential considered to be goodwill. Pueblo Corporation uses the cost method to account for its investment in Hacienda Limited and values the non-controlling interest in its subsidiary at its fair value, proportionate to the price paid for its controlling interest. On June 30, 2018, Pueblo acquired a further 20% interest by purchasing additional shares from the non-controlling shareholders for a consideration of $64,000. During 2018, Pueblo had net income of $248,000 and paid dividends of $124,000 and Hacienda had net income of $60,000 and paid dividends of $40,000. Both companies earned their income evenly over the year and declared their dividends on October 31, 2018. Pueblo had retained earnings of $520,000 at the end of 2018. Required: a) Calculate consolidated retained earnings on December 31, 2018. b) Calculate non-controlling interest on December 31, 2018. entered into the following transactions during 2015: he principal amount, Question 1: Pampas Inc. owns 19,000 shares of Sierra Company (which is 95% of its outstanding common shares) and accounts for its investment using the equity method. On December 31, 2015, Sierra Company's shareholders' equity consisted of common shares of $200,000 and retained earnings of $340,000. On that date, the balance in Pampas' investment in Sierra Company account was $640,000. The acquisition differential at that date was allocated 50% to land, 25% to some equipment with a remaining useful life of five years and rest to goodwill. During 2016, Sierra Company reported a net income of $300,000 and declared and paid dividends of $140,000. On January 1, 2016, Pampas sold 3,800 of its shares in Sierra Company for proceeds of $133,000. Pampas values the non-controlling interest in its subsidiary at its fair value, proportionate to the price paid for its controlling interest. Required: a) Calculate the non-controlling interest in Sierra Company that would be included in Pampas Inc.'s consolidated balance sheet at December 31, 2016. b) Calculate the non-controlling interest in the consolidated net income of Pampas and its subsidiary for the year ended December 31, 2016. Question 2: Pueblo Corporation acquired a 70% interest in Hacienda Limited on January 1, 2018, for $196,000 when Hacienda had common shares of $200,000 and retained earnings of $40,000. Half of the acquisition differential was allocated to capital assets with a remaining useful life of five years on that date with the balance of the acquisition differential considered to be goodwill. Pueblo Corporation uses the cost method to account for its investment in Hacienda Limited and values the non-controlling interest in its subsidiary at its fair value, proportionate to the price paid for its controlling interest. On June 30, 2018, Pueblo acquired a further 20% interest by purchasing additional shares from the non-controlling shareholders for a consideration of $64,000. During 2018, Pueblo had net income of $248,000 and paid dividends of $124,000 and Hacienda had net income of $60,000 and paid dividends of $40,000. Both companies earned their income evenly over the year and declared their dividends on October 31, 2018. Pueblo had retained earnings of $520,000 at the end of 2018. Required: a) Calculate consolidated retained earnings on December 31, 2018. b) Calculate non-controlling interest on December 31, 2018. entered into the following transactions during 2015: he principal amount,
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Why should an organization not rely only on ROI to select projects?
-
Are older orogenic belts physically different than younger ones as we see them today? How old are the newer ones considered to be, can you name some examples, and in general terms where are they...
-
Explain what is meant by the term management by exception. (p. 357)
-
(a) If $100 at Time "0" will be worth $110 a year hence and was $90 a year ago, compute the interest rate for the past year and the interest rate next year. (b) Assume that $90 invested a year ago...
-
Check image attached for details . 29. What is the contribution margin per unit of limited resource for each type of set? a. Standard: $125.00Deluxe: $100.00 b. Standard: $225.00Deluxe: $250.00 c....
-
a. Identify three or more assurance services that are likely to be provided only by public accounting firms. b. Identify three or more assurance services that are likely to be provided by assurance...
-
TOP THREE LEADERSHIP STYLES There are three primary styles of leadership: Autocratic, Democratic, and Laissez-Faire. What are they? What are their strengths & weaknesses? This assignment focusses on...
-
Evaluate 3x/4 6cosx-2 sin x dx 6sinx+2cosx #14 (A)-In (B)-In 2 (C) In (2) (D) In 2 (E) none of these
-
Evaluate the effectiveness of the leadership styles of the leaders who exemplify your selected theories. For instance, what aspects of their leadership styles align with your identified leadership...
-
An integral part of the leadership process in nursing is collaboration, sharing, and support. Based on the work you have done in preparing ideas for your paper outline, respond to the following...
-
Describe a personal leadership philosophy. Describe what leadership theories support a personal leadership philosophy. Describe what leadership style you think would be most effective for someone...
-
Company X dry leases its aircraft to Company Y. Who must have operational control of the flights under the dry lease
-
What are two disadvantages of ROl? Explain how each can lead to decreased profitability.
-
What disadvantage is shared by ROl and residual in come? What can be done to overcome this problem?
-
What is EVA? How does it differ from ROl and resid ual income?
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App