Question

25. Corporation Parent (P) owns 85 percent of Corporation A1; Corporation A1 owns 60 percent of...

25. Corporation Parent (P) owns 85 percent of Corporation A1; Corporation A1 owns 60 percent of Corporation A2; Corporation A2 owns 90 percent of A3; Corporation A3 owns 60 percent of Corporation A4 and 15 percent of Corporation A2; Corporation A4 owns 100 percent of Corporation A5. Identify the consolidated group(s) of corporations.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

A1 is subsidiary of P with 85% holding. Since A1 owns 60% of Corporation A2 thus, P in turn owns (60x 85%) =51% hence, A2 is also the subsidiary of P as well as A1. Since A2 owns 90% of A3 hence, A3 is certainly the subsidiary of A2 however not the subsidiary of P as the indirect holding of P in A3 is (90 x 51%) = 45.90%. A4 is the subsidiary of A3 only with 60% holding by the later. Corporation A4 owns 100% of Corporation A5 thus, A5 is subsidiary of both A4 and A3.

Thus, the consolidated group is as following:

P is the holding company with subsidiaries A1, A2.

A1 is the holding company with subsidiary A2 and A3.

A3 is the holding company with A4 and A5 as the subsidiary companies.

A4 is the holding company of A5 only.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Corporation Parent (P)owns 85 percent of Corporation A1; Corporation A1 owns 60 percent of Corporation A2;...
Corporation Parent (P)owns 85 percent of Corporation A1; Corporation A1 owns 60 percent of Corporation A2; Corporation A2 owns 90 percent of A3; Corporation A3 owns 60 percent of Corporation A4 and 15 percent of Corporation A2; Corporation A4 owns 100 percent of Corporation A5. Identify the consolidated group(s) of corporations. a. P-­?A1-­?A2-­?A3-­?A4-­?A5 b. P-­?A1 only c. P-­?A1and A2-­?A3-­?A4-­?A5 d. P-­?A1; A2-­?A3; and A4-­?A5 e. P-­?A1 and A2-­?A3
Corporation Parent (P)owns 85 percent of Corporation A1; Corporation A1 owns 60 percent of Corporation A2;...
Corporation Parent (P)owns 85 percent of Corporation A1; Corporation A1 owns 60 percent of Corporation A2; Corporation A2 owns 90 percent of A3; Corporation A3 owns 60 percent of Corporation A4 and 15 percent of Corporation A2; Corporation A4 owns 100 percent of Corporation A5. Identify the consolidated group(s) of corporations. a. P-­?A1-­?A2-­?A3-­?A4-­?A5 b. P-­?A1 only c. P-­?A1and A2-­?A3-­?A4-­?A5 d. P-­?A1; A2-­?A3; and A4-­?A5 e. P-­?A1 and A2-­?A3
What z values would I use for a: a1) 80% confidence level a2) 85 % confidence...
What z values would I use for a: a1) 80% confidence level a2) 85 % confidence level a3) 90% confidence level a4) 95% confidence level a5) 98% confidence level a6) 99% confidence le
Parent Corporation owns 90 percent of Subsidiary Company's stock. During 2018, Parent sold inventory purchased $48,000...
Parent Corporation owns 90 percent of Subsidiary Company's stock. During 2018, Parent sold inventory purchased $48,000 to Subsidiary for $60,000. Subsidiary then sold half of the inventory to a nonaffiliate by the end of the year. On 2018, Parent sold $15,000 inventory which was purchased from Subsidiary in 2017. The cost of inventory for Subsidiary was $10,000. Prepare Parent’s adjusting journal entries and the consolidation entries that related to intercompany sale of inventory for 2018. (Remember to include all necessary...
Charles owns a 25 percent interest in Cal Corporation, an S corporation. The corporation has run...
Charles owns a 25 percent interest in Cal Corporation, an S corporation. The corporation has run into some difficulties recently and Charles loaned it $10,000. At the beginning of the year, Charles’s basis in his stock was $16,000. What is Charles’s basis in his stock and debt at the end of the year if the corporation reports losses of $60,000? What is Charles’s basis in his stock and debt at the end of the year if the corporation reports losses...
Plumber Corporation owns 60 percent of Socket Corporation’s voting common stock. On December 31, 20X4, Plumber...
Plumber Corporation owns 60 percent of Socket Corporation’s voting common stock. On December 31, 20X4, Plumber paid Socket $324,000 for dump trucks Socket had purchased on January 1, 20X2. Both companies use straight-line depreciation. The consolidation entry included in preparing consolidated financial statements at December 31, 20X4, was Consolidation Worksheet Entry Debit Credit Trucks 36,000 Gain on Sale of Trucks 36,000 Accumulated Depreciation 72,000 Required: a. What amount did Socket pay to purchase the trucks on January 1, 20X2? b....
Consolidated gain or loss on constructive retirement of debt Assume that a Parent Company owns 100...
Consolidated gain or loss on constructive retirement of debt Assume that a Parent Company owns 100 percent of its Subsidiary. Each of the following independent scenarios describes an intercompany bond transaction between the Parent and the Subsidiary. For each independent case, determine the amount of gain or loss on constructive retirement of the bond reported in the consolidated income statement for the year ended December 31, 2019. Assume straight-line amortization. a. On June 30, 2019, P issues directly to S...
Poppy Corporation owns 60 percent of Seed Company’s common shares. Balance sheet data for the companies...
Poppy Corporation owns 60 percent of Seed Company’s common shares. Balance sheet data for the companies on December 31, 20X2, are as follows: Poppy Corporation Seed Company Assets Cash $ 90,000 $ 32,000 Accounts Receivable 83,000 57,000 Inventory 118,000 99,000 Buildings and Equipment 660,000 350,000 Less: Accumulated Depreciation (235,000 ) (74,000 ) Investment in Seed Company Stock 135,000 Total Assets $ 851,000 $ 464,000 Liabilities and Owners’ Equity Accounts Payable $ 71,000 $ 39,000 Bonds Payable 250,000 200,000 Common Stock...
Pepper Corporation owns 75 percent of Salt Company's voting shares. During 20X8, Pepper produced 50,000 chairs...
Pepper Corporation owns 75 percent of Salt Company's voting shares. During 20X8, Pepper produced 50,000 chairs at a cost of $79 each and sold 35,000 chairs to Salt for $90 each. Salt sold 18,000 of the chairs to unaffiliated companies for $117 each prior to December 31, 20X8, and sold the remainder in early 20X9 to unaffiliated companies for $130 each. Both companies use perpetual inventory systems. 23) Based on the information given above, what amount of cost of goods...
Pie Corporation acquired 75 percent of Slice Company’s ownership on January 1, 20X8, for $96,000. At...
Pie Corporation acquired 75 percent of Slice Company’s ownership on January 1, 20X8, for $96,000. At that date, the fair value of the noncontrolling interest was $32,000. The book value of Slice’s net assets at acquisition was $100,000. The book values and fair values of Slice’s assets and liabilities were equal, except for Slice’s buildings and equipment, which were worth $20,000 more than book value. Accumulated depreciation on the buildings and equipment was $30,000 on the acquisition date. Buildings and...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT