Home / Questions / On January 1 2014 Pinnacle Corporation exchanged $3200000 cash for 100 percent of the outs...
On January 1, 2014, Pinnacle Corporation exchanged $3,200,000 cash for 100 percent of the outstanding voting stock of Strata Corporation. On the acquisition date, Strata had the following balance sheet:
At the acquisition date, Strata’s buildings had a 10-year remaining life and its licensing agreements were due to expire in 5 years. At December 31, 2015, Strata’s accounts payable included an $85,000 current liability owed to Pinnacle. Strata Corporation continues its separate legal existence as a wholly owned subsidiary of Pinnacle with independent accounting records. Pinnacle employs the initial value method in its internal accounting for its investment in Strata. The separate financial statements for the two companies for the year ending December 31, follow. Credit balances are indicated by parentheses.
a. Prepare a worksheet to consolidate the financial information for these two companies.
b. Compute the following amounts that would appear on Pinnacle’s 2015 separate (nonconsolidated) financial records if Pinnacle’s investment accounting was based on the equity method.
• Subsidiary income.
• Retained earnings 1/1/15.
• Investment in Strata.
c. What effect does the parent’s internal investment accounting method have on its consolidated financial statements?
Jul 22 2020 View more View Less
Suppose global climate change adversely influences coffee production everywhere. The elasticity of demand for coffee is estimated at 0.6. Given this information, you shou...
Apr 10 20209. Calculate the following integral S* (.x2 + 2x) cos xdx (12 points)
Jun 02 2021An 6 * 6 * 3/8 angle welded to a 3/8 in gusset plate as shown in Fig. P3-37.All steel is = 36 ksi and Fu = 58
Jul 07 2020Writing the Terms of a SequenceIn Exercises 5–10, write the first five terms of the sequence with the given nth term.
Jul 26 2021Schnusenberg Corporation just paid a dividend of D0= $0.75 per share, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. The compan...
Jun 02 2020Iodine trichloride, ICl3, is an interhalogen compound.(a) Write the Lewis structure of ICl3(b) Does the central atom have more than an octet of valence electrons?(c) Usin...
Jul 25 2021On january 15, Collins paid $1,000 in insurance premiums for a two-month policy covering January 15 to March 15. The payment was initially recorded to Prepaid Insurance. ...
Mar 20 2020The primary reason that company projects with positive net present values are considered acceptable is that:they create value for the owners of the firm.the investment...
Dec 02 2019Thomas Pogge argues that the poverty experienced by the bottom 25% of the world’s people is a violation of human rights and that multi-national corporations who profit ...
Mar 19 2020What companies invest could be banks, bonds stocks, etc to a portfolio and why ?
Aug 30 2020