Questions based on consolidated balance sheet

Assignment Help Financial Accounting

Reference no: EM1314139

Questions based on consolidated balance sheet.

On December 31, 2008 Company P reported assets of $800 million and liabilities of $350 million. On January 1, 2009 it acquires Company S for $350 million cash. The book value of Company S's assets are $260 million and the fair value of its assets are $320 million (the difference in value is solely due to property, plant, and equipment with a remaining life of 10 years); the book value and fair value of Company S's liabilities are $120 million and $150 million, respectively. Company P reported income of $45 million for 2009 before considering the effects of consolidation. Company S reported income of $16 million for 2009.

a. Compute the total goodwill reported in P's consolidated balance sheet at 1/1/09.

b. Compute the total assets, liabilities, and stockholders' equity reported in P's consolidated balance sheet at 1/1/09?

c. Compute the total income reported in P's consolidated income statement for 2009.

d. If company P acquires 70% of Company S for $280 million, how much noncontrolling (minority) interest would it report in a consolidated balance sheet prepared on 1/1/09 and how much income would be attributed to the noncontrolling (minority) interest for 2009?

e. Explain why a company may purchase slightly less than 50% of another company.

Reference no: EM1314139

Questions Cloud

Calculation of overhead variances : Calculation of Overhead Variances - Budget for actual hours of inputand find the Overhead Variances

Using truth table for checking the equivalence : Using truth table for checking the equivalence.

Multiple choices on variance analysis : Multiple choices on Variance analysis and the direct materials quantity variance

Effect of different type of lease transaction : Effect of different type of lease transaction in balance sheet and Make any necessary simplifying assumptions as we did in class.

Questions based on consolidated balance sheet : Questions based on consolidated balance sheet - Compute the total goodwill reported in P's consolidated balance sheet at 1/1/09

Determining the probability that doors left open : If garage is robbed, determine the probability doors were left open?

Checking the equivalence : Checking the equivalence

Physical measure method : The amount of joint cost allocated by physical measure method - Evaluate the amount of joint cost allocated to each product if the physical-measure method is used.

Determine the lower cost or market for ending inventory : Ending Inventory Calculation for each product & as a whole. Tanzy Company's ending inventory includes the following items. Determine the lower cost or market for ending inventory

User Account

All Pages