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Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng
Edition 11ISBN: 978-0538480284Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng
Edition 11ISBN: 978-0538480284 Exercise 13
Analysis of block acquisitions, sale of interest, preferred stock. The information shown on page 427 is available regarding the investments of Billings Corporation in Channel Company for the years 2011-2015. 
Other relevant facts are as follows:
a. On January 1, 2011, Channel has a $60,000 retained earnings balance and there are no dividends in arrears on the preferred stock.
b. Any excess of cost over book value on the investment in common stock is viewed as goodwill.
c. The 10% interest sold on January 1, 2016, is the interest purchased on January 1, 2011.
d. Channel Company income and dividends are as follows for 2011-2015:
Assume the investment accounts are to be properly maintained under the simple equity method. Prepare all necessary correcting entries on the books of Billings Corporation as of January 1, 2016. (Assume nominal accounts are open.) All supporting computations and schedules should be in good form.
Other relevant facts are as follows:
a. On January 1, 2011, Channel has a $60,000 retained earnings balance and there are no dividends in arrears on the preferred stock.
b. Any excess of cost over book value on the investment in common stock is viewed as goodwill.
c. The 10% interest sold on January 1, 2016, is the interest purchased on January 1, 2011.
d. Channel Company income and dividends are as follows for 2011-2015:
Assume the investment accounts are to be properly maintained under the simple equity method. Prepare all necessary correcting entries on the books of Billings Corporation as of January 1, 2016. (Assume nominal accounts are open.) All supporting computations and schedules should be in good form.
Explanation
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Calculation of net correction for equity...
Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng
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