Questions from Financial Accounting

Q: Lane Manufacturing Company acquired 75 percent of Tin Corporation stock at underlying

Lane Manufacturing Company acquired 75 percent of Tin Corporation stock at underlying book value. At the date of acquisition, the fair value of the noncontrolling interest was equal to 25 percent of T...

Q: When is a gain or loss on bond retirement included in the

When is a gain or loss on bond retirement included in the consolidated income statement?

Q: What is meant by a constructive bond retirement in a multicorporate setting

What is meant by a constructive bond retirement in a multicorporate setting? How does a constructive bond retirement differ from an actual bond retirement?

Q: When a bond issue has been placed directly with an affiliate,

When a bond issue has been placed directly with an affiliate, what account balances will be stated incorrectly in the consolidated statements if the intercompany bond ownership is not eliminated in pr...

Q: When an affiliate’s bonds are purchased from a nonaffiliate during the period

When an affiliate’s bonds are purchased from a nonaffiliate during the period, what balances will be stated incorrectly in the consolidated financial statements if the intercompany bond ownership is n...

Q: The summarized balance sheet of Separate Company on January 1, 20X3

The summarized balance sheet of Separate Company on January 1, 20X3, contained the following amounts: On January 1, 20X3, Joint Corporation acquired 70 percent of the common shares and 60...

Q: Clayton Corporation purchased 75 percent of Topple Corporation common stock and 40

Clayton Corporation purchased 75 percent of Topple Corporation common stock and 40 percent of its preferred stock on January 1, 20X6, for $270,000 and $80,000, respectively. At the time of purchase, t...

Q: Grower Supply Corporation holds 85 percent of Schultz Company’s voting common stock

Grower Supply Corporation holds 85 percent of Schultz Company’s voting common stock. At the end of 20X4, Schultz purchased 30 percent of Grower Supply’s stock. Schultz records dividends received from...

Q: Nettle Corporation sold $100,000 par value, 10-

Nettle Corporation sold $100,000 par value, 10-year first mortgage bonds to Timberline Corporation on January 1, 20X5. The bonds, which bear a nominal interest rate of 12 percent, pay interest semiann...

Q: On January 1 of this year, Thomas Insurance Corporation issued bonds

On January 1 of this year, Thomas Insurance Corporation issued bonds with a face value of $4,000,000 and a coupon rate of 9 percent. The bonds mature in five years and pay interest annually every Dece...