ACT470: Advanced Financial Accounting
Credit Hours:
3
Contact Hours:
This is a 3-credit course, offered in accelerated format. This means that 16 weeks of
material is covered in 8 weeks. The exact number of hours per week that you can
expect to spend on each course will vary based upon the weekly coursework, as
well as your study style and preferences. You should plan to spend 10-25 hours per
week in each course reading material, interacting on the discussion boards, writing
papers, completing projects, and doing research.
Faculty Information
Name:
Phone:
CSU-GC Email:
Virtual Office Hours:
Course Description and Outcomes
This course is designed to explain the business combinations and the various methods of accounting used to
prepare consolidated financial statements, and describe the purpose of elimination entries in preparing a
consolidated worksheet of a business. Students will also learn how to analyze consolidation and acquisition of
businesses, investigate consolidated financial statements and evaluate the formation, operation and liquidation
of partnerships.
Course Learning Outcomes:
1. Explain business combinations and the various methods of accounting used to prepared consolidated
financial statements
2. Describe the purpose of elimination entries in preparing a consolidated worksheet of a business
3. Analyze the consolidation process when the parent company owns only a part of the subsidiary
4. Analyze the acquisition of businesses with a positive differential and the presence of noncontrolling
interest (that is why shareholders purchase less than 100% of the outstanding common stock)
5. Investigate the purpose of eliminating intercompany inventory transfers prior to preparation of
consolidated financial statements
6. Evaluate the formation, operation and liquidation of partnerships
Participation & Attendance
Prompt and consistent attendance in your online courses is essential for your success at CSU-Global Campus.
Failure to verify your attendance within the first 7 days of this course may result in your withdrawal. If for some
reason you would like to drop a course, please contact your advisor.
Online classes have deadlines, assignments, and participation requirements just like on-campus classes. Budget
your time carefully and keep an open line of communication with your instructor. If you are having technical
problems, problems with your assignments, or other problems that are impeding your progress, let your
instructor know as soon as possible.
Course Materials
Required:
Baker, R. E., Christensen, D. E., & Cottrell, T. M. (2012). Essentials of advanced financial accounting. New
York, NY: McGraw Hill Publishers. ISBN 9780078025648
Course Schedule
Due Dates
The Academic Week at CSU-Global begins on Monday and ends the following Sunday.
 Discussion Boards: The original post must be completed by Thursday at 12 midnight MT and Peer
Responses posted by Sunday 12 midnight MT. Late posts may not be awarded points.
 Mastery Exercises: Students may access and retake mastery exercises through the last day of class until
they achieve the scores they desire.
 Critical Thinking Activities: Assignments are due Sunday at 12 midnight MT.
Week #
Readings
Chapter 1 in Essentials of Advanced Financial Accounting
1
Chapter 2 in Essentials of Advanced Financial Accounting
2
Chapter 3 in Essentials of Advanced Financial Accounting
3
Chapter 4 in Essentials of Advanced Financial Accounting
4
Chapter 5 in Essentials of Advanced Financial Accounting
5
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Assignments
Discussion (25 points)
Mastery (10 points)
Critical Thinking (50 points)
Discussion (25 points)
Mastery (10 points)
Critical Thinking (50 points)
Discussion (25 points)
Mastery (10 points)
Critical Thinking (50 points)
Discussion (25 points)
Mastery (20 points)
Critical Thinking (50 points)
Discussion (25 points)
Mastery (10 points)
Critical Thinking (50 points)
Chapter 6 in Essentials of Advanced Financial Accounting
6
Chapter 10 in Essentials of Advanced Financial Accounting
7
Chapter 11 in Essentials of Advanced Financial Accounting
8
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Discussion (25 points)
Mastery (10 points)
Critical Thinking (50 points)
Discussion (25 points)
Mastery (10 points)
Critical Thinking (50 points)
Discussion (25 points)
Mastery (20 points)
Portfolio (350 points)
Assignment Details
This course includes the following assignments/projects:
Module 1:
Acquisition Journal Entry (50 Points)
On January 1, 201X, Alaska Corporation acquired Mercantile Corporation's net assets by paying $160,000 in cash.
Balance sheet data for the two companies and fair value information for Mercantile Corporation immediately
before the business combination are given below:
(Source: Baker, Christensen, & Cottrell, 2012)
Prepare the journal entry to record the acquisition of Mercantile Corporation.
Submit your responses in MSWord as one document. Label each section clearly. For written answers, please make
sure your responses are well written, adhere to CSU-Global APA formatting and writing expectations, and have the
proper citation, if needed.
Module 2
Consolidation Statements (50 Points)
On January 1, 201X, Plimsol Company acquired 100 percent of Shipping Corporation's voting shares, at underlying
book value. Plimsol uses the cost method in accounting for its investment in Shipping. Shipping's reported retained
earnings of $75,000 on the date of acquisition. The trial balances for Plimsol Company and Shipping Corporation as
of December 31, 201X, follow:
(Source: Baker, Christensen, & Cottrell, 2012)
1.
2.
Provide all eliminating entries required to prepare a full set of consolidated statements for 201X.
Prepare a three-part consolidation worksheet in good form as of December 31, 201X.
Submit your responses in MSWord as one document. Label each section clearly. For written answers, please make
sure your responses are well written, adhere to CSU-Global APA formatting and writing expectations, and have the
proper citation, if needed.
Module 3
Parent Company Statements (50 points)
Parent Company acquired 90 percent of Son Inc. on January 31, 20X2 in exchange for cash. The book value of Son's
individual assets and liabilities approximated their acquisition-date fair values. On the date of acquisition, Son
reported the following:
(Source: Baker, Christensen, & Cottrell, 2012)
During the year Son Inc. reported $310,000 in net income and declared $15,000 in dividends. Parent Company
reported $520,000 in net income and declared $25,000 in dividends. Parent accounts for its investment using the
equity method.
Answer the following questions:
1.
2.
3.
4.
What journal entry will Parent make on the date of acquisition to record the investment in Son Inc.?
If Parent were to prepare a consolidated balance sheet on the acquisition date (January 31, 201X), what is
the basic elimination entry Parent would use in the consolidation worksheet?
What is Parent's balance in "Investment in Son Inc." prior to consolidation on December 31, 201X?
What is the basic elimination entry Parent would use in the consolidation worksheet on December 31,
201X?
Submit your responses in MSWord as one document. Label each section clearly. For written answers, please make
sure your responses are well written, adhere to CSU-Global APA formatting and writing expectations, and have the
proper citation, if needed.
Module 4
Consolidated Balance Sheet (50 Points)
Lea Company acquired all of Tenzing Corporation's stock on January 1, 20X6 for $150,000 cash. On December 31,
20X7, the balance sheets of the two companies showed the following amounts:
(Source: Baker, Christensen, & Cottrell, 2012)
Tenzing Corporation reported retained earnings of $75,000 at the date of acquisition. The difference between the
acquisition price and underlying book value is assigned to buildings and equipment with a remaining economic life
of five years from the date of acquisition.
Answer the following questions:
1.
2.
Give the appropriate eliminating entry or entries needed to prepare a consolidated balance sheet as of
December 31, 20X7.
Prepare a consolidated balance sheet worksheet as of December 31, 20X7.
Submit your responses in MSWord as one document. Label each section clearly. For written answers, please make
sure your responses are well written, adhere to CSU-Global APA formatting and writing expectations, and have the
proper citation, if needed.
Module 5
Journal Entries for Acquisition (50 Points)
Magellan Corporation acquired 80 percent ownership of Dipper Corporation on January 1, 20X8, for $200,000. At
that date, Dipper reported common stock outstanding of $75,000 and retained earnings of $150,000. The fair
value of the noncontrolling interest was $50,000. The differential is assigned to equipment, which had a fair value
$25,000 greater than book value and a remaining economic life of five years at the date of the business
combination. Canton Dipper reported net income of $40,000 and paid dividends of $20,000 in 20X8.
Provide the following:
1.
2.
The journal entries recorded by Magellan during 20X8 on its books if it accounts for its investment in
Dipper using the equity method.
The eliminating entries needed at December 31, 20X8, to prepare consolidated financial statements.
Submit your responses in MSWord as one document. Label each section clearly. For written answers, please make
sure your responses are well written, adhere to CSU-Global APA formatting & writing expectations, and have the
proper citation, if needed.
Module 6
Consolidated Statements for Acquisition (50 Points)
Colton Company acquired 80 percent ownership of Mota Company's voting shares on January 1, 2008, at
underlying book value. The fair value of the non-controlling interest on that date was equal to 20 percent of the
book value of Mota Company. During 2008, Colton purchased inventory for $30,000 and sold the full amount to
Mota Company for $50,000. On December 31, 2008, Mota's ending inventory included $10,000 of items purchased
from Colton. Also in 2008, Mota purchased inventory for $80,000 and sold the units to Colton for $100,000. Colton
included $30,000 of its purchase from Mota in ending inventory on December 31, 2008. Summary income
statement data for the two companies revealed the following:
(Source: Baker, Christensen, & Cottrell, 2012)
Provide the following:
1.
2.
3.
4.
Compute the amount to be reported as sales in the 20X8 consolidated income statement.
Compute the amount to be reported as cost of goods sold in the 20X8 consolidated income statement.
What amount of income will be assigned to the non-controlling shareholders in the 20X8 consolidated
income statement?
What amount of income will be assigned to the controlling interest in the 20X8 consolidated income
statement?
Submit your responses in MSWord as one document. Label each section clearly. For written answers, please make
sure your responses are well written, adhere to CSU-Global APA formatting and writing expectations, and have the
proper citation, if needed.
Module 7
Partnerships and Balance Sheets (50 Points)
Two sole proprietors, L and M, agreed to form a partnership on January 1, 2009. The trial balance for each
proprietorship is shown below as of January 1, 2009.
(Source: Baker, Christensen, & Cottrell, 2012)
The LM partnership will take over the assets and assume the liabilities of the proprietors as of January 1, 2009.
Provide the following:
1.
2.
Prepare a balance sheet, for financial accounting purposes, for the LM partnership as of January 1, 2009.
In addition, assume that M agreed to recognize the goodwill generated by L's business. Accordingly, M
agreed to recognize an amount for L's goodwill such that L's capital equaled M's capital on January 1,
2009. Given this alternative, how does the balance sheet prepared for #1 change?
Submit your responses in MSWord as one document. Label each section clearly. For written answers, please make
sure your responses are well written, adhere to CSU-Global APA formatting and writing expectations, and have the
proper citation, if needed.
Module 8
Portfolio Project (350 points)
The Portfolio Project is a two-part project. The first part is a scenario covering the topic of consolidated financial
statements. The second part is the preparation of a consolidated financial statement. Submit both parts
separately.
Part 1: Scenario – Written Response
A new employee has been given responsibility for preparing the consolidated financial statements of Sample
Company. After attempting to work alone for some time, the employee seeks assistance in gaining a better overall
understanding of the way in which the consolidation process works.
You have been asked to provide assistance in explaining the consolidation process. The employee is asking you to
respond to the following questions. Please provide full explanations and use examples to support your work.
1.
2.
3.
4.
5.
Why must the eliminating entries be entered in the consolidation worksheet each time consolidated
statements are prepared?
How is the beginning-of-period non-controlling interest balance determined?
How is the end-of-period non-controlling interest balance determined? Provide an example.
Which of the subsidiary’s account balances must always be eliminated? Why?
Which of the parent company’s account balances must always be eliminated? Why?
Your responses should be complete, cite appropriate examples, well written, and in conformity with CSU-Global
guidelines for formatting and style.
Part 2: Problem Solving - Journal
Parent Corporation acquired 75 percent of Signature Company’s voting stock on January 1, 201X, at underlying
book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Signature at
that date. Parent uses the fully adjusted equity method in accounting for its ownership of Signature during 201X.
On December 31, 201X, the trial balances of the two companies are as follows:
(Source: Baker, Christensen, & Cottrell, 2012)
Complete the following items, providing written responses and spreadsheet as required:
1.
2.
3.
Provide all the eliminating entries required as of December 31, 201X, to prepare consolidated financial
statements and explain why these are eliminating entries.
Prepare a three-part consolidation worksheet.
Prepare a consolidated balance sheet, income statement and retained earnings statement for 201X.
Make sure to label your answers and provide support where needed. Your responses should be complete, well
written, and in conformity with CSU-Global guidelines for formatting and style.
Course Policies
Late Work
Students are permitted a 7 day grace period during which they may submit a Critical Thinking assignment after
the original due date without penalty. Papers submitted between 8 and 14 days after the original due date will
be accepted with a potential 10 percent reduction in grade for late submission. Papers submitted 15 or more
days beyond the original due date may not be accepted unless prior arrangements have been made with the
instructor. No Portfolios will be accepted late and no assignments will be accepted after the last day of class
unless a student has requested an incomplete grade in accordance with the Incomplete Policy.
Course Grading
Grading Scale and Policies
20% Discussion Participation
45% Critical Thinking Activities
35% Final Portfolio Paper
A
95.0 – 100
A-
90.0 – 94.9
B+
86.7 – 89.9
B
83.3 – 86.6
B-
80.0 – 83.2
C+
75.0 – 79.9
C
70.0 – 74.9
D
60.0 – 69.9
F
59.9 or below
FN*
Failure for Nonparticipation
I**
Incomplete
* Students who stop attending class and fail the course for nonparticipation will be issued the “FN” grade. The FN grade may have
implications for financial aid and scholarship awards.
** An “I” grade may be assigned at the Instructor’s discretion to students who are in good standing (passing) in the course. Students
should have completed a majority of the coursework in order to be eligible for the “I” grade. Students should request an "I" grade from
the Instructor with a written justification, which must include explanation of extenuating circumstances that prevented timely
completion of the coursework. If the request is approved, the Instructor will require a written agreement consisting of a) the specific
coursework to be completed, b) the plan to complete the coursework, and c) the deadline for completion. The agreement will be kept on
file at CSU-Global Campus. An incomplete course must be satisfactorily completed within the time frame stipulated in the agreement, but
no later than the end of the following semester from the date the “I” was given. An incomplete not removed within one year shall
convert to an F and be included in the computation of the student’s grade point average.
Academic Integrity
Students must assume responsibility for maintaining honesty in all work submitted for credit and in any other
work designated by the instructor of the course. Academic dishonesty includes cheating,
plagiarism, unauthorized possession of academic materials, and falsification. The Student Handbook
provides information on how students can avoid plagiarism by understanding what it is and how to use library
and internet resources appropriately with proper citation. Please refer to the Academic Catalog for complete
policies regarding plagiarism and academic dishonesty.
APA
Students are expected to follow the CSU-Global APA requirements when citing in APA (based on the APA Style
Manual, 6th edition). For details on CSU-Global APA style, please review the APA resources located under the
Library tab in Blackboard.
Netiquette
All posts and classroom communication must be conducted in a professional and respectful manner in
accordance with the student code of conduct. Think before you push the Send button. Did you say just what you
meant? How will the person on the other end read the words?
Any derogatory or inappropriate comments regarding race, gender, age, religion, sexual orientation, are
unacceptable and subject to disciplinary action.
If you have concerns about something that has been said, please let your instructor know.
Institutional Policies
Refer to the Academic Catalog for comprehensive documentation of CSU-GC institutional policies.