标题: Current Asset under Equity,Consolidation and Prop Consolidation [打印本页] 作者: anish 时间: 2011-7-13 16:32 标题: Current Asset under Equity,Consolidation and Prop Consolidation
Parent
Cash $400
Inventory $500
Other Current Assets $100
Subsidiary
Cash $100
Inventory $300
Other Current Assets $200
Parent acquired 50% of the equity of subsidiary for $500 in cash.
What is the current asset after consolidation under each method (Equity,Consolidation and proportionate consolidation)作者: giorgio10 时间: 2011-7-13 16:32
I was going to try it, but wasn't sure (and still so) how the parent buys it for $500 cash wen it only had $400 in cash...no indication of loan, etc.作者: huangxiaoxie 时间: 2011-7-13 16:32
maybe it was a gift!作者: FinancialAnaly 时间: 2011-7-13 16:32
I would imagine that if there was insufficient cash, the parent issued either stock, or a combination of stock and cash. Purchase prices - in reality - are rarely "all cash" transactions.作者: tianxin 时间: 2011-7-13 16:32
I try as well:
Equity Method
Cash: 400 - 500 (???)
Inventory: 500
Other Current Assets: 100
Proportionate Consolidation
Cash: 400 + 50 - 500
Inventory: 500 + 150
Other Current Assets: 100 + 100
Consolidation
Cash: 400 + 100 - 500
Inventory: 500 + 300
Other Current Assets: 100 + 200
We account for the cash we paid for the subsidiary in each of the 3 methods, right?
i.e. current assets (i.e. cash) must go down by the price we paid for the subsidiary irrespective of method used? Correct?作者: chaojimali 时间: 2011-7-13 16:32
this is from this year mock AM Merick case, it was specified if numbers were before/after the acquisition
