Analysis and Calculations Should Be Based on the Requirements of Current

question 49

Essay

Analysis and calculations should be based on the requirements of current Canadian GAAP.
The following balance sheets have been prepared on December 31,2010 for Clarke Corp.and Jensen Inc. Additional Information:
Clarke uses the cost method to account for its 50% interest in Jensen,which it acquired on January 1,2007.On that date,Jensen's retained earnings were $20,000.The acquisition differential was fully amortized by the end of 2010.
Clarke sold Land to Jensen during 1999 and recorded a $15,000 gain on the sale.Clarke is still using this Land.Clarke's December 31,2010 inventory contained a profit of $10,000 recorded by Jensen.
Jensen borrowed $20,000 from Clarke during 2010 interest-free.Jensen has not yet repaid any of its debt to Clarke.
Both companies are subject to a tax rate of 20%.
-Prepare a Balance Sheet for Clarke on December 31,2010 in accordance with current Canadian GAAP,assuming that Clarke's investment in Jensen is a significant influence investment.

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Definitions:

M-form Design

A type of organizational structure known as the Multidivisional form, characterized by a series of semi-autonomous divisions that are responsible for different products or markets, overseen by a central headquarters.

Functional Design

An approach to designing products, services, or systems that focuses on practicality and performance, meeting specific objectives and user needs.

Divisional Design

A type of organizational structure that groups together departments based on similar products, services, markets, or geographic locations.

Stability Strategy

A business approach aimed at maintaining current operations and focusing on consistent performance and steady growth, rather than rapid expansion or restructuring.