[SOLVED] On November 1, 2017, Dos Santos Company

> Go to the website www.napico.com and click on “Partnership Financial Information—Click Here.” Then click on “2015 Annual Reports” to access the Form 10-K annual report for Real Estate Associates Limited II (Real II). Read the financial statements contain

> Hamilton Hawks Playersâ Association and Mr. Sideline, the CEO and majority owner of Hamilton Hawks Soccer, Inc, ask your help in resolving a salary dispute. Mr. Sideline presents the following income statement to the playersâ&#128

> Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2018, the companies had the following account balances: Intra-entity sales of $32

> Hughes Inc. has a wholly owned subsidiary in Canada that previously had been determined as having the Canadian dollar as its functional currency. Due to a recent restructuring, Hughes Inc.’s CFO believes that the functional currency of the Canadian compa

> Lynch Corporation has a wholly owned subsidiary in Mexico (Lynmex) with two distinct and unrelated lines of business. Lynmex’s Small Appliance Division manufactures small household appliances such as toasters and coffeemakers at a factory in Monterrey, N

> What valuation should be recorded for noncash assets transferred to a partnership by one of the partners?

> When a company acquires an affiliated company’s debt instruments from a third party, how is the gain or loss on extinguishment of the debt calculated? When should this balance be recognized?

> Barker Company owns 80 percent of the outstanding voting stock of Walden Company. During the current year, intra-entity sales amount to $100,000. These transactions were made with a gross profit rate of 40 percent of the transfer price. In consolidating

> Assume the same information as in question (16) except that Metcalf issues a 10 percent stock dividend instead of selling new shares of stock. How does this transaction affect the business combination? From 16: Washburn Company owns 75 percent of Metcal

> In many cases, EPS is computed based on the parent’s portion of consolidated net income and parent company shares and convertibles. However, a different process must be used for some business combinations. When is this alternative approach required?

> The income statement and the balance sheet are produced using a worksheet, but a consolidated statement of cash flows is not. What process is followed in preparing a consolidated statement of cash flows?

> Perkins Company acquires 90 percent of the outstanding common stock of the Butterfly Corporation as well as 55 percent of its preferred stock. How should these preferred shares be accounted for within the consolidation process?

> A partnership is currently holding $400,000 in assets and $234,000 in liabilities. The partnership is to be liquidated, and $20,000 is the best estimation of the expenses that will be incurred during this process. The four partners share profits and loss

> Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $612,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraftâs identifiable assets and

> James Corporation owns 80 percent of Carl Corporation’s common stock. During October, Carl sold merchandise to James for $250,000. At December 31, 40 percent of this merchandise remains in James’s inventory. Gross profit percentages were 20 percent for J

> A partnership has the following capital balances: X (50 percent of profits and losses) = $150,000; Y (30 percent of profits and losses) = $120,000; Z (20 percent of profits and losses) = $80,000. If the partnership is to be liquidated and $30,000 becomes

> Carney, Pierce, Menton, and Hoehn are partners who share profits and losses on a 4:3:2:1 basis, respectively. They are beginning to liquidate the business. At the start of this process, capital balances are Carney, capital ............................ $6

> Bishop has a capital balance of $120,000 in a local partnership, and Cotton has a $90,000 balance. These two partners share profits and losses by a ratio of 60 percent to Bishop and 40 percent to Cotton. Lovett invests $60,000 in cash in the partnership

> A partnership has the following capital balances: Comprix (35% of gains and losses) .......... $150,000 Heflin (40%) ................................................ 300,000 Kaplan (25%) ................................................ 320,000 Mahar is

> Pat, Jean Lou, and Diane are partners with capital balances of $50,000, $30,000, and $20,000, respectively. These three partners share profits and losses equally. For an investment of $50,000 cash (paid to the business), MaryAnn will be admitted as a par

> Which of the following best describes the articles of partnership agreement? a. The purpose of the partnership and partners’ rights and responsibilities are required elements of the articles of partnership. b. The articles of partnership are a legal co

> How does partnership accounting differ from corporate accounting? a. The matching principle is not considered appropriate for partnership accounting. b. Revenues are recognized at a different time by a partnership than is appropriate for a corporation.

> William (40% of gains and losses) ........... $ 220,000 Jennings (40%) ............................................. 160,000 Bryan (20%).................................................... 110,000 Darrow invests $250,000 in cash for a 30 percent ownersh

> William (40% of gains and losses) ........... $ 220,000 Jennings (40%) ............................................. 160,000 Bryan (20%).................................................... 110,000 Darrow invests $270,000 in cash for a 30 percent ownersh

> At year-end, the Circle City partnership has the following capital balances: Manning, Capital …………………….$130,000 Gonzalez, Capital .......................... 110,000 Clark, Capital ................................. 80,000 Freeney, Capital ................

> On January 1, 2017, Doone Corporation acquired 60 percent of the outstanding voting stock of Rockne Company for $300,000 consideration. At the acquisition date, the fair value of the 40 percent noncontrolling interest was $200,000 and Rockne’s assets and

> At year-end, the Circle City partnership has the following capital balances: Manning, Capital …………………….$130,000 Gonzalez, Capital .......................... 110,000 Clark, Capital ................................. 80,000 Freeney, Capital ................

> A partnership has the following capital balances: Allen, Capital ............................. $60,000 Burns, Capital.............................. 30,000 Costello, Capital ......................... 90,000 Profits and losses are split as follows: Allen

> A partnership begins its first year of operations with the following capital balances: According to the articles of partnership, all profits will be assigned as follows: ∙ Winston will be awarded an annual salary of $20,000 with $10,000 assigned to Sale

> Which of the following is not a reason for the popularity of partnerships as a legal form for businesses? a. Partnerships may be formed merely by an oral agreement. b. Partnerships can more easily generate significant amounts of capital. c. Partnershi

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> Placid Lake Corporation acquired 80 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2017, when Scenic had a net book value of $400,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $5,000 per y

> McCarthy, Inc.âs Brazilian subsidiary borrowed 100,000 euros on January 1, 2017. Exchange rates between the Brazilian real (BRL) and euro (â¬)Â and between the U.S. dollar ($) and BRL are as follows: What amo

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> St. Philip Company ordered parts costing €100,000 from a foreign supplier on January 15 when the spot rate was $0.20 per €. A one-month forward contract was signed on that date to purchase €100,000 at a forward rate of $0.23. The forward contract is prop

> On July 1, 2017, Mifflin Company borrowed 200,000 euros from a foreign lender evidenced by an interest-bearing note due on July 1, 2018. The note is denominated in euros. The U.S. dollar equivalent of the note principal is as follows: In its 2018 income

> On October 1, 2017, Tile Co., a U.S. company, purchased products from Azulejo, a Portuguese company, with payment due on December 1, 2017. If Tile’s 2017 operating income included no foreign exchange gain or loss, the transaction could have a. Been deno

> On December 15, 2017, Lisbeth Inc. (a U.S. company) purchases merchandise inventory from a foreign supplier for 50,000 schillings. Lisbeth agrees to pay in 45 days after it sells the merchandise. Lisbeth makes sales rather quickly and pays the entire obl

> Peerless Corporation (a U.S. company) made a sale to a foreign customer on September 15, for 100,000 crowns. It received payment on October 15. The following exchange rates for 1 crown apply: September 15………..$0.60 September 30………….0.66 October 15……………….

> On January 1, 2017, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Inc., for a total of $980,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $700,000, retained earnings of $250,0

> On November 1, 2017, Dos Santos Company forecasts the purchase of raw materials from a Brazilian supplier on February 1, 2018, at a price of 200,000 Brazilian reals. On November 1, 2017, Dos Santos pays $1,500 for a three-month call option on 200,000 rea

> On June 1, 2017, Micro Corp. received an order for parts from a Mexican customer at a price of 1,000,000 Mexican pesos with a delivery date of July 31, 2017. On June 1, when the U.S. dollar–Mexican peso spot rate is $0.115, Micro Corp. entered into a two

> On September 1, 2017, Jensen Company received an order to sell a machine to a customer in Canada at a price of 100,000 Canadian dollars. Jensen shipped the machine and received payment on March 1, 2018. On September 1, 2017, Jensen purchased a put option

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> The parent company acquires all of a subsidiary’s common stock but only 70 percent of its preferred shares. This preferred stock pays a 7 percent annual cumulative dividend. No dividends are in arrears at the current time. How is the noncontrolling inter

> Pesto Company possesses 80 percent of Salerno Company’s outstanding voting stock. Pesto uses the initial value method to account for this investment. On January 1, 2014, Pesto sold 9 percent bonds payable with a $10 million face value (maturing in 20 yea

> Redfield Company reports current earnings of $420,000 while declaring $52,000 in cash dividends. Snedeker Company earns $147,000 in net income and declares $13,000 in dividends. Redfield has held a 70 percent interest in Snedeker for several years, an in

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> Mattoon, Inc., owns 80 percent of Effingham Company. For the current year, this combined entity reported consolidated net income of $500,000. Of this amount $465,000 was attributable to Mattoon’s controlling interest while the remaining $35,000 was attri

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> Neill Company purchases 80 percent of the common stock of Stamford Company on January 1, 2017, when Stamford has the following stockholders’ equity accounts: Common stock—40,000 shares outstanding .......... $100,000 Additional paid-in capital...........

> Aaron owns 100 percent of the 12,000 shares of Veritable, Inc. The Investment in Veritable account has a balance of $588,000, corresponding to the subsidiary’s unamortized acquisition-date fair value of $49 per share. Veritable issues 3,000 new shares to

> Premier Company owns 90 percent of the voting shares of Stanton, Inc. Premier reports sales of $480,000 during the current year and Stanton reports $264,000. Stanton sold inventory costing $28,800 to Premier (upstream) during the year for $57,600. Of thi

> On January 1, Coldwater Company has a net book value of $2,174,000 as follows 2,000 shares of preferred stock; par value $100 per share; cumulative, nonparticipating, nonvoting; call value $108 per share ..................................................

> A subsidiary has (1) a convertible preferred stock and (2) a convertible bond. How are these items factored into the computation of earnings per share for the parent company?

> On January 1, Tesco Company spent a total of $4,384,000 to acquire control over Blondel Company. This price was based on paying $424,000 for 20 percent of Blondel’s preferred stock and $3,960,000 for 90 percent of its outstanding common stock. At the acq

> On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remai

> Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated. On January 1, 2016, Thomson acquired a building with a 10-year life for $460,000. Thomson depreciated the building on the straight-line basis assuming no salvage value.

> Dunn Corporation owns 100 percent of Grey Corporationâs common stock. On January 2, 2017, Dunn sold to Grey $40,000 of machinery with a carrying amount of $30,000. Grey is depreciating the acquired machinery over a five-year remaining l

> Angela, Inc., holds a 90 percent interest in Corby Company. During 2017, Corby sold inventory costing $77,000 to Angela for $110,000. Of this inventory, $40,000 worth was not sold to outsiders until 2018. During 2018, Corby sold inventory costing $72,000

> A local partnership is liquidating and has only two assets (cash of $10,000 and land with a cost of $35,000). All partnership liabilities have been paid. All partners are personally insolvent. The partners have capital balances and share profits and loss

> Use the same information as in problem (5) except assume that the transfers were from Bottom Company to Top Company. What are the consolidated sales and cost of goods sold? a. $1,000,000 and $720,000 b. $1,000,000 and $755,000 c. $1,000,000 and $696,0

> Top Company holds 90 percent of Bottom Company’s common stock. In the current year, Top reports sales of $800,000 and cost of goods sold of $600,000. For this same period, Bottom has sales of $300,000 and cost of goods sold of $180,000. During the curren

> Parkette, Inc., acquired a 60 percent interest in Skybox Company several years ago. During 2017, Skybox sold inventory costing $160,000 to Parkette for $200,000. A total of 18 percent of this inventory was not sold to outsiders until 2018. During 2018, S

> What is the primary reason we defer financial statement recognition of gross profits on intra-entity sales for goods that remain within the consolidated entity at year-end? a. Revenues and COGS must be recognized for all intra-entity sales regardless of

> What is the purpose of a drawing account in a partnership’s financial records?

> If a partner is contributing attributes to a partnership such as an established clientele or a particular expertise, what two methods can be used to record the contribution? Describe each method.

> Describe the differences between a Subchapter S corporation and a Subchapter C corporation.

> When a partner sells an ownership interest in a partnership, what rights are conveyed to the new owner?

> By what methods can a new partner gain admittance into a partnership?

Question: On November 1, 2017, Dos Santos Company

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