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

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Home>Business & Finance homework help>Accounting homework help> ON 1/1/2000 JACK COMPANY PURCHASED 90% OF JILL COMPANY FOR BOOK VALUE INFORMATION ABOUT JACK AND JILL ARE PRESENTED BELOW FOR 2013:

Sheet1

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