Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Chapter 5, Problem 8.1E
To determine
Introduction: Consolidation is a process in which financial statements of a subsidiary is merged with financial statements of the parent. In this process, the effect of intercompany transactions is eliminated.
To prepare: The lease payment amortization schedule for the life of the lease.
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On January 1, 2015, Traylor Company, an 80%-owned subsidiary of Parker Electronics, Inc., signed a 4-year directfinancing lease with its parent for the rental of electronic equipment. The lease agreement requires a $12,000 payment on January 1 of each year, and title transfers to Traylor on January 1, 2019. The equipment originally cost $40,822 and had an estimated remaining life of five years at the start of the lease term. The lessor’s implicit interest rate is 12%. The lessee also used the 12% rate to record the transaction. 1. Prepare a lease payment amortization schedule for the life of the lease. 2. Prepare the eliminations and adjustments required for this lease on the December 31, 2015, consolidated worksheet. 3. Prepare the eliminations and adjustments for the December 31, 2016, consolidated worksheet.
On January 1, 2015, Traylor Company, an 80%-owned subsidiary of Parker Electronics, Inc., signed a 4-year directfinancing lease with its parent for the rental of electronic equipment. The lease agreement requires a $12,000 payment on January 1 of each year, and title transfers to Traylor on January 1, 2019. The equipment originally cost $40,822 and had an estimated remaining life of five years at the start of the lease term. The lessor’s implicit interest rate is 12%. The lessee also used the 12% rate to record the transaction.
Question: Prepare the eliminations and adjustments required for this lease on the December 31, 2015, consolidated worksheet.
On January 1, 2015, Traylor Company, an 80%-owned subsidiary of Parker Electronics, Inc., signed a 4-year directfinancing lease with its parent for the rental of electronic equipment. The lease agreement requires a $12,000 payment on January 1 of each year, and title transfers to Traylor on January 1, 2019. The equipment originally cost $40,822 and had an estimated remaining life of five years at the start of the lease term. The lessor’s implicit interest rate is 12%. The lessee also used the 12% rate to record the transaction.
Question: Prepare the eliminations and adjustments for the December 31, 2016, consolidated worksheet.
Chapter 5 Solutions
Advanced Accounting
Ch. 5 - Prob. 1UTICh. 5 - Subsidiary Company S has $1000,000 of bonds...Ch. 5 - Plessor Industries acquired 80% of the outstanding...Ch. 5 - Company P purchased $100,000 of subsidiary Company...Ch. 5 - Prob. 5UTICh. 5 - Prob. 6UTICh. 5 - Prob. 7UTICh. 5 - Prob. 1ECh. 5 - Prob. 2ECh. 5 - Prob. 3.1E
Ch. 5 - Prob. 3.2ECh. 5 - Prob. 4ECh. 5 - Carlton Company is an 80%- owned subsidiary of...Ch. 5 - Carlton Company is an 80%- owned subsidiary of...Ch. 5 - Prob. 6.1ECh. 5 - Prob. 6.2ECh. 5 - Prob. 7.1ECh. 5 - Prob. 7.2ECh. 5 - Prob. 7.3ECh. 5 - Prob. 8.1ECh. 5 - Prob. 8.3ECh. 5 - Prob. 9ECh. 5 - Prob. 5.1.1PCh. 5 - Prob. 5.1.2PCh. 5 - Prob. 5.2PCh. 5 - Prob. 5.3PCh. 5 - Prob. 5.4PCh. 5 - Prob. 5.5PCh. 5 - Prob. 5.6PCh. 5 - Prob. 5.7PCh. 5 - Prob. 5.8.1PCh. 5 - Prob. 5.8.2PCh. 5 - Prob. 5.9PCh. 5 - Prob. 5.10PCh. 5 - Prob. 5.14PCh. 5 - Prob. 5.2.1CCh. 5 - Prob. 5.2.2CCh. 5 - Prob. 5.3.1CCh. 5 - Prob. 5.3.2CCh. 5 - Prob. 5.3.3CCh. 5 - Prob. 5.3.4C
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