Required: Using the worksheet approach in the template below, consolidate the financial statements of Paris and...
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Required: Using the worksheet approach in the template below, consolidate the financial statements of Paris and Slade for the year-ended December 31, 2021 You will need to write out your journal entries including descriptions on the Step 5 sheet Make sure your journal entries are properly referenced Points are allocated for neatness and accuracy in your Excel work. Use linked cells, embedded formulas, and reference your journal entry work. Account Paris Slade Ref Debits Ref Credits Consolidated Consolidation journal entries Points are allocated for neatness and accuracy in your Excel work. Ref Debit Credit Debit Amount Credit Amount Description Your supervisor has asked you to double check your consolidation to make sure there are no errors. They have asked you to directly calculate the consolidated net income Prepare a direct calculation of consolidated net income to prove your income statement calculated in step 4 Points are allocated for neatness and accuracy in your Excel work. A B C D E F G H Finally, your supervisor doesn't fully understand the idea of acquisition differential, why we don't see it on the balance sheet, and how it changes each year Calculate a schedule of changes to acquisition differential, since acquisition to current year, to support the consolidation Points are allocated for neatness and accuracy in your Excel work. K L M N P Additional Data 100.0% of the common shares of Slade Paper Ltd. (Slade) In January 2019, Paris Inc Company (Paris) purchased by issuing common shares worth $800,000. At that date, Slade's common shares and retained earnings totalled $250,000 and $340,000 respectively. The net book values and fair values of the net identifiable assets of Slade were the same except for the following: 1. The fair market value of inventory was greater than book value by $50,000. 2. The FMV of capital assets had replacement cost that exceeded NBV of $120,000. 3. Although the NBV of Slade's bonds payable was $400,000, the FMV was $460,000 due to a decline in the interest rates since the bonds were originally issued. On July 1, 2021, Paris advanced Slade $200,000, due July 1, 2002. Interest of 8% is due at maturity. During 2021, Paris paid dividends of $250,000 and Slade paid dividends of $50,000. Paris uses the Fair Value Enterprise method in their consolidation process. Data Statement of Operations For the year-ended December 31, 2021 Sales Cost of Goods Sold Paris Slade $ 3,850,000 $1,650,000 2,550,000 1,120,000 Gross profit 1,300,000 530,000 Expenses Administration & Selling 550,000 384,000 Depreciation 136,000 74,000 Interest 0 56,000 686,000 514,000 Other income Interest & dividends Gain on sale of land Income before income taxes Income tax expense Net income 76,000 4,000 0 100,000 76,000 104,000 690,000 120,000 260,000 30,000 $ 430,000 $ 90,000 Statement of Financial Position As at December 31, 2021 Paris Slade Assets Current assets Cash 45,000 $80,000 Short-term investments 380,000 45,000 Accounts receivable 655,000 455,000 Inventory Due from Slade 420,000 350,000 200,000 0 1,700,000 930,000 Property, plant and equipment (net) 1,450,000 690,000 Investment in Slade 800,000 0 $ 3,950,000 $1,620,000 Liabilities Current liabilities Accounts payable 665,000 280,000 Note payable to Paris 0 200,000 665,000 480,000 Bond payable 0 400,000 665,000 880,000 Shareholders' Equity Required: Using the worksheet approach in the template below, consolidate the financial statements of Paris and Slade for the year-ended December 31, 2021 You will need to write out your journal entries including descriptions on the Step 5 sheet Make sure your journal entries are properly referenced Points are allocated for neatness and accuracy in your Excel work. Use linked cells, embedded formulas, and reference your journal entry work. Account Paris Slade Ref Debits Ref Credits Consolidated Consolidation journal entries Points are allocated for neatness and accuracy in your Excel work. Ref Debit Credit Debit Amount Credit Amount Description Your supervisor has asked you to double check your consolidation to make sure there are no errors. They have asked you to directly calculate the consolidated net income Prepare a direct calculation of consolidated net income to prove your income statement calculated in step 4 Points are allocated for neatness and accuracy in your Excel work. A B C D E F G H Finally, your supervisor doesn't fully understand the idea of acquisition differential, why we don't see it on the balance sheet, and how it changes each year Calculate a schedule of changes to acquisition differential, since acquisition to current year, to support the consolidation Points are allocated for neatness and accuracy in your Excel work. K L M N P Additional Data 100.0% of the common shares of Slade Paper Ltd. (Slade) In January 2019, Paris Inc Company (Paris) purchased by issuing common shares worth $800,000. At that date, Slade's common shares and retained earnings totalled $250,000 and $340,000 respectively. The net book values and fair values of the net identifiable assets of Slade were the same except for the following: 1. The fair market value of inventory was greater than book value by $50,000. 2. The FMV of capital assets had replacement cost that exceeded NBV of $120,000. 3. Although the NBV of Slade's bonds payable was $400,000, the FMV was $460,000 due to a decline in the interest rates since the bonds were originally issued. On July 1, 2021, Paris advanced Slade $200,000, due July 1, 2002. Interest of 8% is due at maturity. During 2021, Paris paid dividends of $250,000 and Slade paid dividends of $50,000. Paris uses the Fair Value Enterprise method in their consolidation process. Data Statement of Operations For the year-ended December 31, 2021 Sales Cost of Goods Sold Paris Slade $ 3,850,000 $1,650,000 2,550,000 1,120,000 Gross profit 1,300,000 530,000 Expenses Administration & Selling 550,000 384,000 Depreciation 136,000 74,000 Interest 0 56,000 686,000 514,000 Other income Interest & dividends Gain on sale of land Income before income taxes Income tax expense Net income 76,000 4,000 0 100,000 76,000 104,000 690,000 120,000 260,000 30,000 $ 430,000 $ 90,000 Statement of Financial Position As at December 31, 2021 Paris Slade Assets Current assets Cash 45,000 $80,000 Short-term investments 380,000 45,000 Accounts receivable 655,000 455,000 Inventory Due from Slade 420,000 350,000 200,000 0 1,700,000 930,000 Property, plant and equipment (net) 1,450,000 690,000 Investment in Slade 800,000 0 $ 3,950,000 $1,620,000 Liabilities Current liabilities Accounts payable 665,000 280,000 Note payable to Paris 0 200,000 665,000 480,000 Bond payable 0 400,000 665,000 880,000 Shareholders' Equity
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Related Book For
Advanced Financial Accounting
ISBN: 978-0137030385
6th edition
Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay
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