ON 1/1/2000 JACK COMPANY PURCHASED 90% OF JILL COMPANY FOR BOOK VALUE INFORMATION ABOUT JACK AND JILL ARE PRESENTED BELOW FOR 2013:



	PROBLEM 1

	ON 1/1/2000 JACK COMPANY PURCHASED 90% OF JILL COMPANY FOR BOOK VALUE

	INFORMATION ABOUT JACK AND JILL ARE PRESENTED BELOW FOR 2013:

				2013
				JACK		JILL
	SALES			4,000,000		400,000
	COGS			600,000		60000
	INVESTMENT INCOME			306000			90% of Jill's income

	NET INCOME			3,706,000		340,000


COMMON SHARES OUTSTAND				800000		100000
cumulative preferred 10,000 shares $1par 100%						10000

	OTHER INFORMATION:
	THE CUMULATIVE PREFERRED STOCK OF JILL CAN BE CONVERTED INTO 20,000 SHARES OF JILL'S COMMON STOCK
	In 2013, Jill declared and paid a $10,000 dividend to preferred stock holders

	Jill owns 10,000 shares of Jack common stock					Jack paid no dividends

	REQUIRED: DETERMINE THE CONSOLIDATED EARNINGS PER SHARE OF JACK COMPANY.
	a) if the convertible preferred stock is anti-dilutive
	b) is the convertible preferred stock is dilutive.

	Problem 2

	The Jay Company owns 90% of the stock of Kay Company. At the time of acquisition all excess was attributable to Goodwill

			INCOME STATEMENTS FOR 2014 ARE AS FOLLOWS:

				JAY			KAY
		SALES		2,000,000			600,000
		COGS		1,000,000			270,000
		GAIN ON LAND SALE					40000

		INCOME BEFORE TAX		1000000			370000

ON JULY 1ST KAY SOLD LAND TO JAY FOR $400,000 WHICH KAY HAD PURCHASED 4 YEARS EARLIER FOR $360,000.

		TAXES ON ALL TRANSACTIONS ARE 40%

		KAY HAS DECIDED TO FILE A CONSOLIDATED TAX RETURN

		USING THE PERCENTAGE ALLOCATION METHOD DETERMINE THE INCOME ATTRIBUTABLE TO NCI OF KAY
		USING THE SEPARATE RETURN METHOD DETERMINE THE INCOME ATTRIBUTABLE TO NCI OF KAY


PROBLEM 3
	On September 1st Able Company purchased 4000 "I love Rome" t-shirts from an Italian company for 8 euros each with payment due
	March 1st 2015.

	On September 1st the Euro was worth $1.30.
	On September 30th the Euro was worth $1.28
	On December 31st the Euro was worth $1.25
	On March 1st the Euro was worth $1.32


		REQUIRED: MAKE THE NECESSARY JOURNAL ENTRIES FOR ABLE COMPANY ON:
		A) SEPTEMBER 1
		B) SEPTEMBER 30 …END OF 3RD QUARTER
		C) DECEMBER 31, END OF YEAR
		D) March 1st when payment made









Use the following information for Problem 4

On 1/1/2011 an American Company called Taco established a Mexican subsidiary called Bell by buying all 100,000 shares of its stock at 15 pesos each

			The 2014 Income statement and Balance Sheet for Bell Company are as follows
					(in GAAP and Pesos)

					income statement
			sales		4,000,000
			cogs		1,700,000
			gross profit		2,300,000
			operating exp		1,000,000
			depreciation		100,000
			gain		400,000
			income		1,600,000


					balance sheet

			cash		1,500,000
			a/r		500,000
			inventory		1,000,000
			equip		2,000,000
			a/d equip		100,000
			land		1,000,000
			total assets		5,900,000


			accounts pay		2,000,000
			note pay (due in 19)		1,000,000

			common stock		1,500,000
			r/e		1,400,000

	ADDITIONAL INFORMATION
		On January 1, 2011 the peso was worth 11 cents
		In 2014 the peso on average was worth 12 cents
		On December 31, 2013 when Bell purchased the equipment the peso was worth 11 cents
		On December 31, 2013 Bell's retained earnings in dollars was $35,000
		On November 1st 2014 Bell paid a 195000 peso dividend when the peso was worth 10 cents
		The land was purchased when the peso was worth 15 cents
		On August 29th (when the gain happened) the peso was worth 9 cents
		On December 31st 2014, the peso is worth $14 cents

		REQUIRED:
			A) CONVERT THE BELL STATEMENTS FROM PESOS TO DOLLARS IF THE PESO IS THE FUNCTIONAL CURRENCY
			B) CONVERT THE BELL STATEMENTS FROM PESOS TO DOLLARS IF THE DOLLAR IS THE FUNCTIONAL CURRENCY
			C) WHICH OF THE 2 METHODS GIVES US MORE RELEVANT INFORMATION (DEFEND YOUR ANSWER…NO MORE THAN 3 SENTENCES

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