Advanced Accounting 8/E

Advanced Accounting 8/E

Advanced Accounting 8/e

Errata Sheet

Chapter 1

p. 6: Par. 2, sent. 3: principal, not principle.

p. 14: Par. 4, sent. 2 should read:

An impairment occurs when the recorded value of goodwill is greater than its fair value.

Chapter 2

p. 27: Par. 3: The first sentence should read:

Investors also use the equity method for internal parent company accounting for subsidiaries. This situation arises when the investor controls the operations of the investee through ownership of more than 50% of the voting stock of the investee company, the result of a business combination in which one or more companies become subsidiaries. For financial reporting purposes, such combinations result in the preparation of consolidated finacial statements.

Exercise 2-4: p. 47: Acquisition date should be: July 1, 2004.

Chapter 3

p. 70: Last journal entry on page - correct entry is:

Investment in Sand (+A) 200

Cash (-A) 200

p. 78: Journal entry #2, the credit to the Building account should read:

Building - net (-A) 20

p. 82: Exercise 3-3, parts 4 and 5:

The Investment in subsidiary account balance should be $1,320 (not $1,300).

p. 85: The correct balance of Peekos Income from Slogger is $130 (not $126.5). Therefore, correct Total Revenue is $1,730 and Net Income is $430.

p. 88: Problem 3-7: Correct the following account balances for Portly:

Investment in Slender - 80% 340 (debit balance)

Retained earnings 202 (credit balance)

Income from Slender 40 (credit balance)

Worksheet Template for Problem 3-11:

The correct balance for the Investment in Stubb is 691; correct total assets for Pope are 2,498; correct Retained Earnings for Pope are 548; and correct Total Equities for Pope are 2,498.

Chapter 4

p. 96: Journal entry (a) should show a credit to:

Dividends (+SE) 12,000


Should read: preparation not preparations.

p. 109: Consolidated Statement of Cash Flows - Indirect Method

par. 1, sent. 4 should read: We prepare the consolidated SCF directly from Cash Flow from Operations, .... The period should be a comma.

p. 125: Problem 4-12: Item 1 should read:

Pat’s accounts receivable includes $5,000 owed by Sci. (Not to Sci).

Worksheet Template for Problem 4-12 is dated 2006, correct date should be 2004.