Grant, Inc. acquired 30% of South Co.’s voting stock for $200,000 on January 2, year 3. Grant’s 30% interest in South gave Grant the ability to exercise significant influence over South’s operating and financial policies. During year 3, South earned $80,000 and paid dividends of $50,000. South reported earnings of $100,000 for the six months ended June 30, year 4, and $200,000 for the year ended December 31, year 4. On July 1, year 4, Grant sold half of its stock in South for $150,000 cash. South paid dividends of $60,000 on October 1, year 4.

8. Before income taxes, what amount should Grant include in its year 3 income statement as a result of the investment?
a. $15,000
b. $24,000
c. $50,000
d. $80,000

9. In Grant’s December 31, year 3, balance sheet, what should be the the carrying amount of this investment?
a. $200,000
b. $209,000
c. $224,000
d. $230,000

10. In its year 4 income statement, what amount should Grant report as gain from the sale of half of its investment?
a. $24,500
b. $30,500
c. $35,000
d. $45,500


前提

Consolidations に関する出題。

“acquired 30% of SC’s voting stock”, “exercise significant influence over…” より、Equity Method を使用。

 

数字まとめ

January 2, year 3
Grant acquired 30% of South’s voting stock for $200,000.

During year 3
South earned $800,000
South paid dividends of $50,000

 

June 30, year 4
SC reported earnings of $100,000 for the six months ended June 30

December 31, year
SC reported earnings of $200,000 for the year

July 1, year 4
Grant sold half of stock in South for $150,000 cash

October 1, year 4
South paid dividends of $60,000

 

問われていること

8. Investment の結果により year 3 の I/S にいくら計上すべきか。

9. Year 3 の B/S における investment の carrying amount はいくらか。

10. Year 4 の I/S において、investment の 半分を売ったときにいくら gain を得たか。

 

8, 9 について

まず、Jan 2, year 3 に Grant が South の voting stock を purchased したときの entry.

Dr.
Investment in subsidiary  200,000

Cr.
Cash  200,000

 

 

次に、During year 3, South (sub) が 800,000 を earned したときの entry.

Dr.
Investment in sub  240,000*

Cr.
Equity in earnings
(=Income from subsidiary)  240,000

 

* 300,000 * 30%

 

また、同期間 South は dividends 50,000 を paid した。

Dr.
Cash  15,000**

Cr.
Investment in subsidiary  15,000

 

** 50,000 * 30%

Cr. を “Dividend income” としないよう注意。

 

この時点での “Investment in sub” の T-Account は以下。

Inv. in sub
200,000 15,000
24,000
bal. 209,000

 

解答

8. Investment の結果により year 3 の I/S にいくら計上すべきか。

Grant’s share of South’s year 1 earnings (30% × $80,000 = $24,000) would be recognized as investment revenue under the equity method. If there was any excess of cost over book value of assets with finite useful lives, resulting from the purchase of the investment, it would be amortized, reducing investment revenue. However, not enough information was given to determine if there was an excess. The dividends received by Grant (30% × $50,000 = $15,000) do not affect investment revenue using the equity method; they are recorded as a reduction of the investment account.

dividends paid は Equity Method では investment revenue に影響を与えず、reduction of investment で計上する。

したがって、South’s earnings 800,000 * 30% = 24,000 が答え。

 

9. Year 3 の B/S における investment の carrying amount はいくらか。

Inv. in sub の Dr. balance より、209,000

 

 

10 について

Year 3 の ending = Year 4 の beginning における Inv. in sub の carrying amount は 209,000.

 

South は Jan 1 ~ June 30 までの 6 months で 100,000 を earned した。

このうち 30% が Grant の取り分で、100,000 * 30% = 30,000.

 

Net して、Year 4 の inv. の carrying amount は 239,000.

このうち半分を売ったので、cost : 119,500.

 

売値は 150,000.

差し引きして 150,000 – 119,500 = gain 30,500.