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Modern Advanced Accounting with OLC with Premium Content Card

by: Larsen, E. John

Modern Advanced Accounting with OLC with Premium Content Card

by: Larsen, E. John

ISBN 13:
9780073211596
ISBN 10:
0073211591
Edition: 10th
Format: Hardcover
Copyright: 02/23/2005
Publisher: McGraw-Hill/Irwin

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Summary

Larsen's Advanced Accounting provides complete and in-depth coverage of the topics typically taught in a one-or-two semester advanced accounting course, including partnerships, business combinations and consolidated financial statements. Faculty appreciate the current coverage of FASB and GASB regulations, the wealth of thorough end-of-chapter material, and the in-depth coverage in this shorter length Advanced text. Flexibility is provided by modularly designed parts, each self-contained, that allow instructors to cover only chapters that are appropriate for their class.

Preface

Ethical Issues in Advanced Accounting

(24)

Scope of Chapter

(1)

What Is Fraudulent Financial Reporting?

(1)

An Example of Fraudulent Financial Reporting

(1)

Ethical Standards for Preparers of Financial Statements and Financial Reports

(5)

Significant Events in the Establishment of Ethical Standards for Management Accountants and Financial Executives

(2)

Analysis of Ethical Standards for Management Accountants and Financial Executives

(1)

Concluding Observations

(1)

Appendix 1 IMA Standards of Ethical Conduct for Members

(2)

Appendix 2 FEI Code of Ethics

(1)

Appendix 3 AICPA Code of Professional Conduct

(9)

Review Questions

(1)

Exercises

(2)

Cases

(3)

PART ONE ACCOUNTING FOR PARTNERSHIPS AND BRANCHES

(139)

Partnerships: Organization and Operation

(50)

Scope of Chapter

(1)

Organization of a Limited Liability Partnership

(3)

Characteristics of an LLP

(1)

Deciding between an LLP and a Corporation

(1)

Is the LLP a Separate Entity?

(1)

The Partnership Contract

(1)

Ledger Accounts for Partners

(1)

Loans to and from Partners

(1)

Valuation of Investments by Partners

(1)

Income-Sharing Plans for Limited Liability Partnerships

(10)

Partners' Equity in Assets versus Share in Earnings

(1)

Division of Net Income or Loss

(7)

Financial Statements for an LLP

(3)

Correction of Partnership Net Income of Prior Period

(1)

Changes in Ownership of Limited Liability Partnerships

(8)

Accounting for Changes in Partners

(1)

Accounting and Managerial Issues

(1)

Admission of a New Partner

(1)

Acquisition of an Interest by Payment to One or More Partners

(2)

Investment in Partnership by New Partner

(1)

Bonus or Goodwill Allowed to Existing Partners

(2)

Bonus or Goodwill Allowed to New Partner

(1)

Retirement of a Partner

(2)

Limited Partnerships

(3)

Accounting for Limited Partnerships

(1)

Financial Statements for Limited Partnerships

(2)

SEC Enforcement Actions Dealing with Wrongful Application of Accounting Standards for Partnerships

(1)

AAER 202

(1)

AAER 214

(1)

Review Questions

(1)

Exercises

(9)

Cases

(4)

Problems

(10)

Partnership Liquidation and Incorporation; Joint Ventures

(46)

Scope of Chapter

(1)

Liquidation of a Partnership

(2)

The Meaning of Liquidation

(1)

Division of Losses and Gains during Liquidation

(1)

Distribution of Cash or Other Assets to Partners

(1)

Payments to Partners of an LLP After All Noncash Assets Realized

(8)

Equity of Each Partner Is Sufficient to Absorb Loss from Realization

(1)

Equity of One Partner Is Not Sufficient to Absorb That Partner's Share of Loss from Realization

(2)

Equities of Two Partners Are Not Sufficient to Absorb Their Shares of Loss from Realization

(1)

Partnership Is Insolvent but Partners Are Solvent

(2)

General Partnership Is Insolvent and Partners Are Insolvent

(2)

Installment Payments to Partners

(8)

General Principles Guiding Installment Payments

(1)

Determining Appropriate Installment Payments to Partners

(1)

Preparation of a Cash Distribution Program

(5)

Withholding of Cash for Liabilities and Liquidation Costs

(1)

Liquidation of Limited Partnerships

(1)

Incorporation of a Limited Liability Partnership

(4)

Joint Ventures

(4)

Present-Day Joint Ventures

(1)

Accounting for a Corporate or LLC Joint Venture

(1)

Accounting for an Unincorporated Joint Venture

(2)

SEC Enforcement Actions Dealing with Wrongful Application of Accounting Standards for Joint Ventures

101

(1)

Review Questions

102

(1)

Exercises

103

(8)

Cases

111

(3)

Problems

114

(7)

Accounting for Branches; Combined Financial Statements

121

(43)

Scope of Chapter

121

(1)

Branches and Divisions

121

(1)

Start-Up Costs of Opening New Branches

122

(1)

Accounting System for a Branch

122

(21)

Reciprocal Ledger Accounts

123

(1)

Expenses Incurred by Home Office and Allocated to Branches

123

(1)

Alternative Methods of Billing Merchandise Shipments to Branches

124

(1)

Separate Financial Statements for Branch and for Home Office

124

(1)

Combined Financial Statements for Home Office and Branch

125

(2)

Working Paper for Combined Financial Statements

127

(3)

Billing of Merchandise to Branches at Prices above Home Office Cost

130

(6)

Working Paper When Billings to Branches Are at Prices above Cost

136

(1)

Treatment of Beginning Inventories Priced above Cost

136

(2)

Reconciliation of Reciprocal Ledger Accounts

138

(4)

Transactions between Branches

142

(1)

SEC Enforcement Action Dealing with Wrongful Application of Accounting Standards for Divisions

143

(1)

Review Questions

143

(1)

Exercises

144

(7)

Cases

151

(3)

Problems

154

(10)

PART TWO BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS

164

(314)

Business Combinations

164

(43)

Scope of Chapter

165

(1)

Business Combinations: Why and How?

165

(3)

Antitrust Considerations

166

(1)

Methods for Arranging Business Combinations

166

(1)

Establishing the Price for a Business Combination

167

(1)

Purchase Method of Accounting for Business Combinations

168

(14)

Determination of the Combinor

169

(1)

Computation of Cost of a Combinee

169

(1)

Allocation of Cost of a Combinee

170

(1)

Illustration of Purchase Accounting for Statutory Merger, with Goodwill

171

(3)

Illustration of Purchase Accounting for Acquisition of Net Assets, with Bargain-Purchase Excess

174

(1)

Other Topics in Accounting for Business Combinations

175

(7)

Appraisal of Accounting Standards for Business Combinations

182

(1)

SEC Enforcement Actions Dealing with Wrongful Application of Accounting Standards for Business Combinations

182

(2)

AAER 38

182

(1)

AAER 275

183

(1)

AAER 598

183

(1)

AAERs 601, 606, and 607

183

(1)

Review Questions

184

(1)

Exercises

184

(9)

Cases

193

(3)

Problems

196

(11)

Consolidated Financial Statements: On Date of Business Combination

207

(54)

Scope of Chapter

207

(1)

Parent Company-Subsidiary Relationships

207

(4)

Nature of Consolidated Financial Statements

207

(1)

Should All Subsidiaries Be Consolidated?

208

(1)

The Meaning of Controlling Interest

208

(1)

Criticism of Traditional Concept of Control

209

(1)

FASB's Proposed Redefinition of Control

209

(1)

The Problem of Variable Interest Entities

210

(1)

Consolidation of Wholly Owned Subsidiary on Date of Business Combination

211

(9)

Consolidation of Partially Owned Subsidiary on Date of Business Combination

220

(14)

Nature of Minority Interest

225

(2)

Consolidated Balance Sheet for Partially Owned Subsidiary

227

(1)

Alternative Methods for Valuing Minority Interest and Goodwill

227

(2)

Bargain-Purchase Excess in Consolidated Balance Sheet

229

(2)

Disclosure of Consolidation Policy

231

(1)

International Accounting Standard 27

231

(1)

Advantages and Shortcomings of Consolidated Financial Statements

232

(1)

``Push-Down Accounting'' for a Subsidiary

232

(2)

SEC Enforcement Actions Dealing with Wrongful Application of Accounting Standards for Consolidated Financial Statements

234

(1)

AAER 34

234

(1)

AAER 1762

234

(1)

Review Questions

235

(1)

Exercises

236

(10)

Cases

246

(3)

Problems

249

(12)

Consolidated Financial Statements: Subsequent to Date of Business Combination

261

(61)

Scope of Chapter

261

(1)

Accounting for Operating Results of Wholly Owned Subsidiaries

261

(15)

Equity Method

261

(1)

Cost Method

262

(1)

Choosing between Equity Method and Cost Method

262

(1)

Illustration of Equity Method for Wholly Owned Subsidiary for First Year after Business Combination

262

(11)

Illustration of Equity Method for Wholly Owned Subsidiary for Second Year after Business Combination

273

(3)

Accounting for Operating Results of Partially Owned Subsidiaries

276

(16)

Illustration of Equity Method for Partially Owned Subsidiary for First Year after Business Combination

277

(10)

Illustration of Equity Method for Partially Owned Subsidiary for Second Year after Business Combination

287

(5)

Concluding Comments on Equity Method of Accounting

292

(1)

Appendix Cost Method for Partially Owned Subsidiary

292

(6)

Review Questions

298

(1)

Exercises

299

(10)

Cases

309

(2)

Problems

311

(11)

Consolidated Financial Statements: Intercompany Transactions

322

(63)

Scope of Chapter

322

(1)

Accounting for Intercompany Transactions Not Involving Profit (Gain) or Loss

322

(4)

Loans on Notes or Open Accounts

322

(3)

Leases of Property under Operating Leases

325

(1)

Rendering of Services

325

(1)

Income Taxes Applicable to Intercompany Transactions

325

(1)

Summary: Intercompany Transactions Not Involving Profit or Loss

326

(1)

Accounting for Intercompany Transactions Involving Profit (Gain) or Loss

326

(1)

Importance of Eliminating or Including Intercompany Profits (Gains) and Losses

326

(1)

Intercompany Sales of Merchandise

327

(6)

Intercompany Sales of Merchandise at Cost

327

(1)

Unrealized Intercompany Profit in Ending Inventories

328

(3)

Intercompany Profit in Beginning and Ending Inventories

331

(1)

Intercompany Profit in Inventories and Amount of Minority Interest

332

(1)

Should Net Profit or Gross Profit Be Eliminated?

333

(1)

Intercompany Sales of Plant Assets

333

(6)

Intercompany Gain on Sale of Land

333

(2)

Intercompany Gain on Sale of Depreciable Plant Asset

335

(4)

Intercompany Lease of Property under Capital/Sales-Type Lease

339

(5)

Intercompany Sales of Intangible Assets

344

(1)

Acquisition of Affiliate's Bonds

345

(7)

Illustration of Acquisition of Affiliate's Bonds

345

(3)

Accounting for Gain in Subsequent Years

348

(4)

Reissuance of Intercompany Bonds

352

(1)

Illustration of Effect of Intercompany Profits (Gains) on Minority Interest

352

(3)

Comprehensive Illustration of Working Paper for Consolidated Financial Statements

355

(8)

SEC Enforcement Action Dealing with Wrongful Accounting for an Intercompany Account

363

(1)

AAER 992

363

(1)

Review Questions

363

(1)

Exercises

364

(7)

Cases

371

(3)

Problems

374

(11)

Consolidated Financial Statements: Income Taxes, Cash Flows, and Installment Acquisitions

385

(44)

Scope of Chapter

385

(1)

Income Taxes in Business Combinations and Consolidations

385

(12)

Income Taxes Attributable to Current Fair Values of a Combinee's Identifiable Net Assets

385

(2)

Income Taxes Attributable to Undistributed Earnings of Subsidiaries

387

(2)

Income Taxes Attributable to Intercompany Profits (Gains)

389

(8)

Consolidated Statement of Cash Flows

397

(4)

Illustration of Consolidated Statement of Cash Flows

397

(4)

Installment Acquisition of Subsidiary

401

(5)

Illustration of Installment Acquisition of Parent Company's Controlling Interest

401

(1)

Parent Company's Journal Entries for Installment Acquisition

402

(2)

Working Paper for Consolidated Financial Statements

404

(2)

Review Questions

406

(1)

Exercises

407

(8)

Cases

415

(1)

Problems

416

(13)

Consolidated Financial Statements: Special Problems

429

(49)

Scope of Chapter

429

(1)

Changes in Parent Company's Ownership Interest in a Subsidiary

429

(11)

Parent Company Acquisition of Minority Interest

429

(3)

Parent Company Sale of a Portion of Its Subsidiary Common Stockholdings

432

(4)

Subsidiary's Issuance of Additional Shares of Common Stock to the Public

436

(2)

Subsidiary's Issuance of Additional Shares of Common Stock to Parent Company

438

(2)

Subsidiary with Preferred Stock Outstanding

440

(4)

Illustration of Minority Interest in Subsidiary with Preferred Stock

440

(2)

Preferred Stock Considerations subsequent to Date of Business Combination

442

(2)

Stock Dividends Distributed by a Subsidiary

444

(2)

Illustration of Subsidiary Stock Dividend

445

(1)

Treasury Stock Transactions of a Subsidiary

446

(3)

Illustration of Treasury Stock Owned by Subsidiary on Date of Business Combination

446

(1)

Illustration of Treasury Stock Acquired by Subsidiary subsequent to Business Combination

447

(2)

Indirect Shareholdings and Parent Company's Common Stock Owned by a Subsidiary

449

(8)

Indirect Shareholdings

449

(6)

Parent Company's Common Stock Owned by a Subsidiary

455

(2)

Concluding Comments on Special Problems

457

(1)

Review Questions

457

(1)

Exercises

458

(6)

Cases

464

(1)

Problems

465

(13)

PART THREE INTERNATIONAL ACCOUNTING: REPORTING OF SEGMENTS, FOR INTERIM PERIODS, AND TO THE SEC

478

(129)

International Accounting Standards; Accounting for Foreign Currency Transactions

478

(25)

Scope of Chapter

478

(1)

International Accounting Standards Board

479

(1)

Accounting for Foreign Currency Transactions

480

(12)

FASB Statements No. 52 and No. 133

481

(1)

Transactions Involving Foreign Currencies

481

(1)

Purchase of Merchandise from a Foreign Supplier

481

(1)

Foreign Currency Transaction Gains and Losses

482

(1)

Sale of Merchandise to a Foreign Customer

483

(1)

Loan Payable Denominated in a Foreign Currency

484

(1)

Loan Receivable Denominated in a Foreign Currency

485

(1)

Conclusions regarding Transactions Involving Foreign Currencies

485

(1)

Forward Contracts

486

(6)

International Accounting Standards 21 and 39

492

(1)

Disclosures regarding Foreign Currency Transactions

492

(1)

Review Questions

492

(1)

Exercises

493

(5)

Cases

498

(1)

Problems

498

(5)

Translation of Foreign Currency Financial Statements

503

(38)

Scope of Chapter

503

(1)

Functional Currency

503

(3)

Alternative Methods for Translating Foreign Entities' Financial Statements

505

(1)

Standards for Translation Established by the Financial Accounting Standards Board

506

(1)

Remeasurement of a Foreign Entity's Accounts

506

(5)

Illustration of Remeasurement of a Foreign Entity's Account Balances

507

(4)

Translation of a Foreign Entity's Financial Statements

511

(12)

Translation of Financial Statements of Foreign Influenced Investee

511

(3)

Translation and Consolidation of Financial Statements of Foreign Subsidiary

514

(6)

Summary: Remeasurement and Translation

520

(1)

Other Aspects of Foreign Currency Translation

520

(2)

International Accounting Standard 21

522

(1)

Appraisal of Accounting Standards for Foreign Currency Translation

522

(1)

Review Questions

523

(1)

Exercises

523

(5)

Cases

528

(1)

Problems

529

(12)

Reporting for Components; Interim Reports; Reporting for the SEC

541

(66)

Scope of Chapter

541

(1)

Reporting for Components of an Entity

541

(6)

Background of Components Reporting

541

(1)

Proposal to Improve Segment Reporting

542

(2)

Allocation of Nontraceable Expenses to Operating Segments

544

(2)

SEC Requirements for Segment Information

546

(1)

Reporting the Disposal of a Business Segment

546

(1)

International Accounting Standard 14

547

(1)

SEC Enforcement Action Dealing with Wrongful Application of Accounting Standards for Operating Segments

547

(1)

Interim Financial Reports

547

(10)

Problems in Interim Financial Reports

548

(1)

APB Opinion No. 28

549

(4)

Reporting Accounting Changes in Interim Periods

553

(2)

Conclusions on Interim Financial Reports

555

(1)

IAS 34, ``Interim Financial Reporting''

555

(1)

SEC Enforcement Actions Dealing with Wrongful Application of Accounting Standards for Interim Financial Reports

555

(2)

Reporting for the SEC

557

(5)

Nature of Reporting to the SEC

557

(1)

Organization and Functions of the SEC

558

(1)

Interaction between SEC and FASB

559

(2)

The SEC and the Public Company Accounting Oversight Board (PCAOB)

561

(1)

Appendix Excerpts from the 2003 Annual Report of The McGraw-Hill Companies, Inc.

562

(26)

Review Questions

588

(1)

Exercises

588

Cases

587

(13)

Problems

600

(7)

PART FOUR ACCOUNTING FOR FIDUCIARIES

607

(63)

Bankruptcy: Liquidation and Reorganization

607

(31)

Scope of Chapter

607

(1)

The Bankruptcy Code

608

(1)

Bankruptcy Liquidation

608

(9)

Debtor's (Voluntary) Petition

608

(1)

Creditor's (Involuntary) Petition

609

(1)

Unsecured Creditors with Priority

609

(1)

Property Claimed as Exempt

610

(1)

Role of Court in Liquidation

610

(1)

Role of Creditors

610

(1)

Role of Trustee

610

(1)

Discharge of Debtor

610

(1)

Role of Accountant in Bankruptcy Liquidation

611

(1)

Financial Condition of Debtor Enterprise: The Statement of Affairs

611

(4)

Estimated Amounts to Be Recovered by Each Class of Creditors

615

(1)

Accounting and Reporting for Trustee

615

(2)

Bankruptcy Reorganization

617

(4)

Appointment of Trustee or Examiner

618

(1)

Plan of Reorganization

618

(1)

Accounting for a Reorganization

618

(2)

Disclosure of Reorganization

620

(1)

Review Questions

621

(1)

Exercises

622

(7)

Cases

629

(1)

Problems

630

(8)

Estates and Trusts

638

(32)

Scope of Chapter

638

(1)

Legal and Accounting Aspects of Estates

638

(14)

Provisions of Uniform Probate Code Governing Estates

638

(3)

Provisions of Revised Uniform Principal and Income Act Governing Estates

641

(1)

Illustration of Accounting for an Estate

642

(10)

Legal and Accounting Aspects of Trusts

652

(3)

Provisions of Uniform Probate Code Governing Trusts

652

(1)

Provisions of Revised Uniform Principal and Income Act Governing Trusts

653

(1)

Illustration of Accounting for a Trust

653

(2)

Review Questions

655

(1)

Exercises

656

(7)

Cases

663

(2)

Problems

665

(5)

PART FIVE ACCOUNTING FOR NONBUSINESS ORGANIZATIONS

670

(144)

Nonprofit Organizations

670

(44)

Scope of Chapter

670

(1)

Accounting Standards for Nonprofit Organizations

670

(1)

Characteristics of Nonprofit Organizations

671

(1)

Fund Accounting by Nonprofit Organizations

672

(11)

Unrestricted Fund

673

(7)

Restricted Fund

680

(1)

Endowment Fund

681

(1)

Agency Fund

682

(1)

Annuity and Life Income Funds

682

(1)

Loan Fund

683

(1)

Plant Fund

683

(1)

Financial Statements of Nonprofit Organizations

683

(5)

Concluding Observations on Accounting for Nonprofit Organizations

687

(1)

Appendix Excerpts from the 2003 Annual Report of The Kenneth T. and Eileen L. Norris Foundation

688

(5)

Review Questions

693

(1)

Exercises

694

(5)

Cases

699

(2)

Problems

701

(13)

Governmental Entities: General Fund

714

(34)

Scope of Chapter

714

(1)

Nature of Governmental Entities

714

(1)

Objectives of Financial Reporting for Governmental Entities

715

(1)

Accounting and Reporting Standards for Governmental Entities

716

(7)

The Governmental Financial Reporting Entity

717

(1)

Funds: The Principal Accounting Unit for Governmental Entities

717

(2)

The Modified Accrual Basis of Accounting

719

(1)

Recording the Budget

719

(4)

Accounting and Reporting for a Governmental Entity's General Fund

723

(9)

Illustration of Accounting for a General Fund

723

(5)

Trial Balance at End of Fiscal Year for a General Fund

728

(1)

Financial Statements for a General Fund

729

(2)

Closing Entries for a General Fund

731

(1)

Review Questions

732

(1)

Exercises

733

(5)

Cases

738

(2)

Problems

740

(8)

Governmental Entities: Other Governmental Funds and Account Groups

748

(32)

Scope of Chapter

748

(1)

Other Governmental Funds

748

(10)

Accounting and Reporting for Special Revenue Funds

748

(3)

Accounting and Reporting for Capital Projects Funds

751

(4)

Accounting and Reporting for Debt Service Funds

755

(3)

Permanent Funds

758

(1)

General Capital Assets and General Long-Term Debt Account Groups

758

(8)

Accounting and Reporting for General Capital Assets Account Group

758

(2)

Accounting and Reporting for General Long-Term Debt Account Group

760

(2)

Capital Leases of Governmental Entities

762

(1)

Accounting for Special Assessment Bonds

763

(3)

Review Questions

766

(1)

Exercises

767

(4)

Cases

771

(2)

Problems

773

(7)

Governmental Entities: Proprietary Funds, Fiduciary Funds, and Comprehensive Annual Financial Report

780

(34)

Scope of Chapter

780

(1)

Proprietary Funds

780

(8)

Accounting and Reporting for Enterprise Funds

781

(4)

Accounting and Reporting for Internal Service Funds

785

(3)

Applicability of FASB Pronouncements to Proprietary Funds

788

(1)

Fiduciary Funds

788

(6)

Accounting and Reporting for Agency Funds

788

(1)

Accounting and Reporting for Private-Purpose Trust Funds

789

(3)

Accounting and Reporting for Pension Trust Funds

792

(1)

Accounting and Reporting for Investment Trust Funds

793

(1)

Comprehensive Annual Financial Report of Governmental Entities

794

(4)

GASB Statement No. 33---A Preliminary Step

795

(1)

Subsequent Steps---GASB Statements No. 35, 37, 38, and 41

796

(1)

Composition of a Governmental Entity's Comprehensive Annual Financial Report

796

(2)

SEC Enforcement Action Dealing with Wrongful Application of Accounting and Reporting Standards for Governmental Entity

798

(1)

AAER 970

798

(1)

Review Questions

799

(1)

Exercises

799

(4)

Cases

803

(2)

Problems

805

(9)

Glossary

814

(11)

Index

825

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Modern Advanced Accounting with OLC with Premium Content Card

Modern Advanced Accounting with OLC with Premium Content Card

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0073211591

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Modern Advanced Accounting with OLC with Premium Content Card

Modern Advanced Accounting with OLC with Premium Content Card

9780073211596

0073211591

Summary

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Supplemental Materials

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