Solutions Manual for Advanced Accounting

Cover......Page 1
Brief Contents......Page 10
Contents......Page 12
Preface......Page 18
Chapter 1: Business Combinations......Page 24
 Reasons For Business Combinations......Page 25
 Antitrust Considerations......Page 26
 Legal Form of Business Combinations......Page 27
 Accounting Concept of Business Combinations......Page 28
 Accounting for Combinations as Acquisitions......Page 29
 Disclosure Requirements......Page 36
 The Sarbanes–Oxley Act......Page 39
 Appendix: Pooling of Interests Accounting......Page 40
 Accounting for Stock Investments......Page 52
 Equity Method—A One-Line Consolidation......Page 55
 Investment in a Step-by-Step Acquisition......Page 62
 Stock Purchases Directly from the Investee......Page 63
 Investee Corporation With Preferred Stock......Page 64
 Disclosures for Equity Investees......Page 65
 Testing Goodwill for Impairment......Page 67
 Business Combinations Consummated Through Stock Acquisitions......Page 86
 Consolidated Balance Sheet at Date of Acquisition......Page 89
 Consolidated Balance Sheets After Acquisition......Page 93
 Assigning Excess to Identifiable Net Assets and Goodwill......Page 95
 Consolidated Income Statement......Page 101
 Push-Down Accounting......Page 102
 Preparing a Consolidated Balance Sheet Worksheet......Page 104
 Consolidation Under the Equity Method......Page 120
 Excess Assigned to Identifiable Net Assets......Page 127
 Consolidated Statement of Cash Flows......Page 132
 Preparing a Consolidation Worksheet......Page 138
  Consolidation Example—Trial Balance Format and Equity Method......Page 143
  Consolidation Under an Incomplete Equity Method......Page 146
  Consolidation Under the Cost Method......Page 147
Chapter 5: Intercompany Profit Transactions—Inventories......Page 170
 Intercompany Inventory Transactions......Page 171
 Downstream and Upstream Sales......Page 175
 Unrealized Profits From Downstream Sales......Page 178
 Unrealized Profits From Upstream Sales......Page 180
 Consolidation Example—Intercompany Profits From Downstream Sales......Page 183
 Consolidation Example—Intercompany Profits From Upstream Sales......Page 185
  The 1933 Securities Act......Page 204
  The Sarbanes–Oxley Act......Page 205
  The Integrated Disclosure System......Page 206
  Sec Developments......Page 208
 Intercompany Profits on Nondepreciable Plant Assets......Page 210
 Intercompany Profits on Depreciable Plant Assets......Page 215
 Plant Assets Sold at other than Fair Value......Page 223
 Consolidation Example—Upstream and Downstream Sales of Plant Assets......Page 224
 Inventory Purchased for Use as an Operating Asset......Page 227
 Intercompany Bond Transactions......Page 244
 Constructive Gains and Losses on Intercompany Bonds......Page 245
 Parent Bonds Purchased by Subsidiary......Page 247
 Parent Purchases Subsidiary Bonds......Page 253
 Acquisitions During an Accounting Period......Page 272
 Piecemeal Acquisitions......Page 275
 Sale of Ownership Interests......Page 277
 Changes in Ownership Interests from Subsidiary Stock Transactions......Page 283
 Stock Dividends and Stock Splits by a Subsidiary......Page 286
 Affiliation Structures......Page 302
 Indirect Holdings—Father-Son-Grandson Structure......Page 304
 Indirect Holdings—Connecting Affiliates Structure......Page 307
 Mutual Holdings—Parent Stock Held by Subsidiary......Page 311
 Subsidiary Stock Mutually Held......Page 319
 Subsidiaries with Preferred Stock Outstanding......Page 336
 Parent and Consolidated Earnings Per Share......Page 342
 Subsidiary With Convertible Preferred Stock......Page 345
 Subsidiary With Options and Convertible Bonds......Page 346
 Income Taxes of Consolidated Entities......Page 347
 Income Tax Allocation......Page 348
 Separate-Company Tax Returns with Intercompany Gain......Page 351
 Effect of Consolidated and Separate-Company Tax Returns on Consolidation Procedures......Page 355
 Business Combinations......Page 362
 Financial Statement Disclosures for Income Taxes......Page 367
Chapter 11: Consolidation Theories, Push-Down Accounting, and Corporate Joint Ventures......Page 386
 Comparison of Consolidation Theories......Page 387
 Illustration—Consolidation Under Parent-Company and Entity Theories......Page 389
 Push-Down Accounting and other Basis Considerations......Page 396
 Joint Ventures......Page 403
 Accounting for Variable Interest Entities......Page 406
 Derivatives......Page 422
 Foreign Exchange Concepts and Definitions......Page 427
 Foreign Currency Transactions other than Forward Contracts......Page 429
 Accounting for Derivative Instruments and Hedging Activities......Page 442
 Accounting for Hedge Contracts: Illustrations of Cash Flow and Fair-Value Hedge Accounting Using Interest Rate Swaps......Page 451
 Foreign Currency Derivatives and Hedging Activities......Page 454
 Objectives of Translation and the Functional Currency Concept......Page 472
 Application of the Functional Currency Concept......Page 474
 Illustration: Translation......Page 478
 Illustration: Remeasurement......Page 484
 Hedging a Net Investment in a Foreign Entity......Page 488
 Segment Reporting......Page 504
 Interim Financial Reporting......Page 510
 Guidelines for Preparing Interim Statements......Page 512
 Nature of Partnerships......Page 530
 Initial Investments in a Partnership......Page 531
 Additional Investments and Withdrawals......Page 533
 Partnership Operations......Page 534
 Profit- and Loss-Sharing Agreements......Page 535
 Changes in Partnership Interests......Page 541
 Purchase of an Interest from Existing Partners......Page 542
 Investing in an Existing Partnership......Page 545
 Dissociation of a Continuing Partnership Through Death or Retirement......Page 547
 Limited Partnerships......Page 549
 The Liquidation Process......Page 566
 Safe Payments to Partners......Page 570
 Installment Liquidations......Page 572
 Cash Distribution Plans......Page 578
 Insolvent Partners and Partnerships......Page 580
 Bankruptcy Reform Act of 1978......Page 594
 Liquidation......Page 597
 Illustration of a Liquidation Case......Page 598
 Reorganization......Page 606
 Financial Reporting During Reorganization......Page 610
 Financial Reporting for the Emerging Company......Page 611
 Illustration of a Reorganization Case......Page 612
 Historical Development of Accounting Principles for State and Local Governmental Units......Page 628
 Overview of Basic Governmental Accounting Models and Principles......Page 630
 The Financial Reporting Entity......Page 641
 Comprehensive Annual Financial Report......Page 642
 Recent Changes to Governmental Fund Accounting......Page 666
 Accounting for the General Fund......Page 667
 Permanent Funds......Page 680
 Capital Projects Funds......Page 681
 Special Assessment Activities......Page 685
 Accounting for the Debt Service Fund......Page 686
 Governmental Fund Financial Statements......Page 688
 Preparing the Government-wide Financial Statements......Page 691
 Proprietary Funds......Page 714
 Internal Service Funds......Page 715
 Enterprise Funds......Page 719
 Proprietary Fund Financial Statements......Page 723
 Fiduciary Funds......Page 725
 Preparing the Government-wide Financial Statements......Page 729
 Required Proprietary Fund Note Disclosures......Page 730
 The Nature of Not-for-Profit Organizations......Page 740
 Not-for-Profit Accounting Principles......Page 741
 Voluntary Health and Welfare Organizations......Page 746
 Nongovernmental Not-for-Profit Hospitals and other Health Care Organizations......Page 753
 Private Not-for-Profit Colleges and Universities......Page 758
 Creation of an Estate......Page 776
 Administration of the Estate......Page 777
 Accounting for the Estate......Page 778
 Illustration of Estate Accounting......Page 779
 Accounting for Trusts......Page 783
 Estate Taxation......Page 784
Glossary......Page 796
 A......Page 804
 B......Page 805
 C......Page 806
 E......Page 808
 F......Page 810
 G......Page 811
 I......Page 812
 N......Page 814
 O......Page 815
 P......Page 816
 R......Page 817
 S......Page 818
 T......Page 819
 W......Page 820