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WantToPassCPA
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Newbie

Joined: 11 Sep 2010
Location: United States
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Posts: 10

Posted: 11 Oct 2010 at 02:01 \| IP Logged

The Yaeger course I'm taking doesn't seem to explain the
section on Business Combinations/Consolidations very well.
I'm failing almost every question in the Wiley book for
this section.

Any advice?

tho9504
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Regular

Joined: 25 Nov 2009
Location: United States
Online Status: Offline
Posts: 196

Posted: 11 Oct 2010 at 11:31 \| IP Logged

Based on Becker, here is run down of eliminations and additions during consolidation

CAR IN BIG

Common Stock - SUB: Eliminate by Debiting

APIC- SUB: Eliminate by Debiting

R/E- SUB: Eliminate by Debiting

Investment-Parent: Eliminate by Crediting

Non-Controlling Interst (Minority interest)-Parent: Add by Crediting

Balance Sheet Adj from book to FV- SUB: Add by debiting (if purchase price > FV)

Intangible Assets (other than goodwill),(if any)- Add by Debiting in consolidated worksheet. You need to create this account. This should be give such as patent, etc.

Goodwill: Add to consolidated worksheet (Purchase Price minus FV of net assets or stock purchased)

tho9504
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Joined: 25 Nov 2009
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Online Status: Offline
Posts: 196

Posted: 11 Oct 2010 at 11:32 \| IP Logged

Balance Sheet Adj from book to FV- SUB: Add by debiting (if purchase price > FV)

Sorry, it should've read Purchase Price > Book Value not FV. Price Price > FV is goodwill.

elsie
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Joined: 06 Feb 2010
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Posts: 152

Posted: 11 Oct 2010 at 13:01 \| IP Logged

well in addition know some other eliminating entries like a/p, sales, gogs, excess depreciation, b/p, etc

abfabnyc
Newbie
Newbie

Joined: 02 Aug 2010
Location: United States
Online Status: Offline
Posts: 15

Posted: 11 Oct 2010 at 19:38 \| IP Logged

WantToPassCPA wrote:

The Yaeger course I'm taking doesn't seem to explain the
section on Business Combinations/Consolidations very well.
I'm failing almost every question in the Wiley book for
this section.

Any advice?

In addition to CAR IN BIG, here are some other helpful tips:

Cost Method = 0-19% interest = DO NOT CONSOLIDATE (unless someone in the company can exert significant influence, then use equity method, but still do not consolidate)

Equity Method = 20% - 50% = DO NOT CONSOLIDATE
Acquisition Method = >50% = CONSOLIDATE and use CAR IN BIG

Hope that helps!

__________________
AUD 5/25/2010 - Passed
REG 7/15/2010 - Passed
BEC 8/28/2010 - Passed
FAR 10/23/2010 - Passed

And I am done!!!!!!!

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