Consolidation on date of acquisition - Equity method with noncontrolling interest and AAP Assume that a...
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Consolidation on date of acquisition - Equity method with noncontrolling interest and AAP Assume that a parent company acquires an 80% interest in its subsidiary for a purchase price of $620,800. The excess of the total fair value of the controlling and noncontrolling interests over the book value of the subsidiary's Stockholders' Equity is assigned to a building (in PPE, net) that the parent believes is worth $50,000 more than its book value, an: unrecorded Patent that the parent valued at $100,000, and Goodwill of $150,000, 80% of which is allocated to the parent. The parent and the subsidiary report the balance sheets on the acquisition date in b. below: a. Prepare the consolidation entries on the acquisition date. Consolidation Worksheet Description Debit Credit [E] Common stock APIC Equity investment [A] PPE, net Patent Equity investment ㅇㅇㅇㅇ0 ㅇㅇㅇ ㅇㅇㅇ o o o o o o o o o c b. Prepare the consolidation spreadsheet on the acquisition date. Elimination Entries Parent Subsidiary Dr Cr Consolidated Cash $460,378 $107,576 $ Accounts receivable 362,880 165,648 Inventory 549,990 212,772 Equity investment 620,800 O [E] O [A] Patent [A] Goodwill [A] PPE, net 2,645,622 393,652 [A] Total Assets $4,639,670 $879,648 Current liabilities $407,390 $165,648 2$ Long-term liabilities 2,000,000 238,000 Common stock 463,523 47,600 [E] APIC 344,453 59,500 [E] Noncontrolling interest O [E] O [A] Retained earnings 1,424,304 368,900 [E] Total Liabilities and Equity $4,639,670 $879,648 $ %24 %24 Consolidation on date of acquisition - Equity method with noncontrolling interest and AAP Assume that a parent company acquires an 80% interest in its subsidiary for a purchase price of $620,800. The excess of the total fair value of the controlling and noncontrolling interests over the book value of the subsidiary's Stockholders' Equity is assigned to a building (in PPE, net) that the parent believes is worth $50,000 more than its book value, an: unrecorded Patent that the parent valued at $100,000, and Goodwill of $150,000, 80% of which is allocated to the parent. The parent and the subsidiary report the balance sheets on the acquisition date in b. below: a. Prepare the consolidation entries on the acquisition date. Consolidation Worksheet Description Debit Credit [E] Common stock APIC Equity investment [A] PPE, net Patent Equity investment ㅇㅇㅇㅇ0 ㅇㅇㅇ ㅇㅇㅇ o o o o o o o o o c b. Prepare the consolidation spreadsheet on the acquisition date. Elimination Entries Parent Subsidiary Dr Cr Consolidated Cash $460,378 $107,576 $ Accounts receivable 362,880 165,648 Inventory 549,990 212,772 Equity investment 620,800 O [E] O [A] Patent [A] Goodwill [A] PPE, net 2,645,622 393,652 [A] Total Assets $4,639,670 $879,648 Current liabilities $407,390 $165,648 2$ Long-term liabilities 2,000,000 238,000 Common stock 463,523 47,600 [E] APIC 344,453 59,500 [E] Noncontrolling interest O [E] O [A] Retained earnings 1,424,304 368,900 [E] Total Liabilities and Equity $4,639,670 $879,648 $ %24 %24
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Schedule of Calculation of Parent Share and NonControlling Interest Amount in Descriptions Parent No... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
Posted Date:
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