Week 3

Case C4-3

A. Explain how Sloan’s   negative retained earnings balance is reflected in the consolidated balance   sheet immediately following the acquisitions.

B. Can goodwill be recorded   if Jacobs pays more than book value for Sloan’s shares? Explain.

C. Explain how the   existence of negative retained earnings changes the consolidation worksheet   entries.

Taking   Account of Ethics

 Access the AICPA's Code of Professional Conduct:

On ET section 102 integrity and Objectivity is related professional work ethic. 

.02 102- 1 – Knowing misrepresentations in the preparation of financial statements or records

.03 102- obligations of a member to his or her employer’s external accountant.