SolutiontoChapter3

E31,3,5,8,P338

E3-1 Multiple-Choice Questions on Consolidation Overview

[AICPA Adapted]
1. d
2. c
3. b
4. a
5. b
E3-3 Multiple-Choice Questions on Consolidated Balances [AICPA Adapted]
1. a
2. b
3. b
4. c
5. a
E3-5 Balance Sheet Consolidation
a. $470,000 = $470,000 - $55,000 + $55,000
b. $605,000 = ($470,000 - $55,000) + $190,000
c. $405,000 = $270,000 + $135,000
d. $200,000 (as reported by Guild Corporation)
E3-8 Subsidiary Acquired for Cash
Fineline Pencil Company and Subsidiary
Consolidated Balance Sheet
January 2, 20X3
Cash ($200,000 - $150,000 + $50,000)
Other Assets ($400,000 + $180,000)
Total Assets

$100,000
580,000
$680,000

Current Liabilities ($100,000 + $80,000)

Common Stock
Retained Earnings
Total Liabilities and Stockholders' Equity

$180,000
300,000
200,000
$680,000

P3-28 Reported Balances

a.

The investment balance reported by Roof will be $192,000.

b.

Total assets will increase by $310,000.

c.

Total liabilities will increase by $95,000.

d.

The amount of goodwill for the entity as a whole will be $25,000

[($192,000 + $48,000) - ($310,000 - $95,000)].

e.

Noncontrolling interest will be reported at $48,000 ($240,000 x .20).