Prepare ‘Investment in Sunlight Corporation Account’ for two years and show the balance of each year in the Book of Parent Company using Equity Method.

Accounting by Geoffrey

 

Course Name: Advanced Financial Accounting Student’s Name:
Course Code: ACCT 302 Student’s
Semester: 2nd CRN:
Academic Year: 1444 H

 

For Instructor’s Use only

Instructor’s Name:
Students’ Grade:              /15 Level of Marks: High/Middle/Low

Instructions – PLEASE READ THEM CAREFULLY

  • The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
  • Assignments submitted through email will not be accepted.
  • Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.
  • Students must mention question number clearly in their answer.
  • Late submission will NOT be accepted.
  • Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO No exceptions.
  • All answers must be typed using Times New Roman (size 12, double-spaced) No pictures containing text will be accepted and will be considered plagiarism.
  • Submissions without this cover page will NOT be accepted.

 

1) Peter Inc. acquired 100% of the outstanding Common Stock of Simran Inc. for $ ____________ cash and _________ shares of its own common stock ($1 par value), which was trading at $___ per share at the acquisition date.            [2 + 3 Marks]

(a) Determine the Acquisition Cost.

(b) Pass Journal Entry in the Book of Parent Company.

[Assume your own figure in the blank spaces.] [Chapter 01]

 

2) Parkin Corporation created Sunlight Corporation with a transfer of $800 cash.  During Sunlight Corp.’s first year of operations, it generated a net loss of $150 and paid no dividends.  During Sunlight Corp.’s second year of operations, it generated net income of $350 and paid dividends of $80.    [Chapter 2]

  1. a) Pass Journal Entries in the Book of Parkin Corporation for two years using Equity Method.
  2. b) Prepare ‘Investment in Sunlight Corporation Account’ for two years and show the balance of each year in the Book of Parent Company using Equity Method.

[2 + 3 Marks]

 

3) There are different approaches or theories that might serve as a basis for preparing consolidated financial statements. Explain these approaches by giving at least two points of each.