On January 1, 2024, Joey Co. purchased 80% of the common stock of Legoria Co. for...
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On January 1, 2024, Joey Co. purchased 80% of the common stock of Legoria Co. for $640,000. The Fair Market Value of the Non-Controlling Interest is $160,000. The net book value of Legoria Company was $600,000 at this date. On this date, $150,000 of the excess cost over book value was attributed to specific accounts with fair values that differed from book values. These accounts of Legoria Co. had differences between there book and fair values as of 1/1/2024 [date of acquisition]: + Patent [10-year Life]___ Book Value $320,000 Fair Value $460,000 Trademarks [Indefinite Life] 200,000 210,000 Joey uses the Equity method to account for its investment in Legoria Company. The following trial balances are available on December 31, 2024. Parentheses [i.e., Q indicates credit balance. The Management of Joey Co. concluded at December 31, 2024 that Goodwill involved in the acquisition of Legoria Shares had been impaired and the carrying value was $20,000. At the end of 2024, Joey Co owed Legoria Co. $20,000. Joey Legoria Current Assets Trademark Patents Equipment (net) $1,054,400 $400,000 600,000 200,000 370,000 288,000 400,000 220,000 Investment in Legoria 652,800 Current Liabilities (992,400) ($448,000) Common Stock (600,000) (180,000) Additional Paid-In-Capital (120,000) (40,000) Retained Earnings, January 1, 2024 (840,000) (380,000) Revenues (1,500,000) (400,000) Cost of Goods Sold 700,000 250,000 Amortization Expense 120,000 20,000 Depreciation Expense 80,000 30,000 Subsidiary Income (Income From Legoria) (44,800) Dividends Declared and Paid I 120,000 40,000 Total SO $0 0 Required: 1) Give all the Journal Entries recorded by Joey Co with regards to its investment during 2024. 2) Prepare a Three-Part consolidation balance sheet work-paper (with Consolidation/eliminating entries) as of December 31, 2024. Include Consolidated Financials in Your answer. 3) Noncontrolling Interest is copsidered to be part of Liabilities or Stockholders equity (circle one) 4) Assume that Joey Co. used the Initial value method to account for its Investment in Legoria. A) Describe (Briefly) with one paragraph or so the Consolidation process for 2024 B) Regarding you answer in A, how would the consolidation process differ in 2025 vs. 2024? On January 1, 2024, Joey Co. purchased 80% of the common stock of Legoria Co. for $640,000. The Fair Market Value of the Non-Controlling Interest is $160,000. The net book value of Legoria Company was $600,000 at this date. On this date, $150,000 of the excess cost over book value was attributed to specific accounts with fair values that differed from book values. These accounts of Legoria Co. had differences between there book and fair values as of 1/1/2024 [date of acquisition]: + Patent [10-year Life]___ Book Value $320,000 Fair Value $460,000 Trademarks [Indefinite Life] 200,000 210,000 Joey uses the Equity method to account for its investment in Legoria Company. The following trial balances are available on December 31, 2024. Parentheses [i.e., Q indicates credit balance. The Management of Joey Co. concluded at December 31, 2024 that Goodwill involved in the acquisition of Legoria Shares had been impaired and the carrying value was $20,000. At the end of 2024, Joey Co owed Legoria Co. $20,000. Joey Legoria Current Assets Trademark Patents Equipment (net) $1,054,400 $400,000 600,000 200,000 370,000 288,000 400,000 220,000 Investment in Legoria 652,800 Current Liabilities (992,400) ($448,000) Common Stock (600,000) (180,000) Additional Paid-In-Capital (120,000) (40,000) Retained Earnings, January 1, 2024 (840,000) (380,000) Revenues (1,500,000) (400,000) Cost of Goods Sold 700,000 250,000 Amortization Expense 120,000 20,000 Depreciation Expense 80,000 30,000 Subsidiary Income (Income From Legoria) (44,800) Dividends Declared and Paid I 120,000 40,000 Total SO $0 0 Required: 1) Give all the Journal Entries recorded by Joey Co with regards to its investment during 2024. 2) Prepare a Three-Part consolidation balance sheet work-paper (with Consolidation/eliminating entries) as of December 31, 2024. Include Consolidated Financials in Your answer. 3) Noncontrolling Interest is copsidered to be part of Liabilities or Stockholders equity (circle one) 4) Assume that Joey Co. used the Initial value method to account for its Investment in Legoria. A) Describe (Briefly) with one paragraph or so the Consolidation process for 2024 B) Regarding you answer in A, how would the consolidation process differ in 2025 vs. 2024?
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