1. The Investor acquired 75% of Investee on January 1, 2019 for $103,500. At acquisition the...
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1. The Investor acquired 75% of Investee on January 1, 2019 for $103,500. At acquisition the fair value of the noncontrolling interest was $34,500. Trial Balances for the two entities at December 31, 2019 are: Investor Investee Debit Credit Debit Credit Cash Accounts Receivable Inventory Land Buildings & Equipment Investment in Subsidary Cost of Goods Sold Wage Expense Depreciation Expense Interest Expense Other Expense Dividends Declared Accumulated Depreciation 170,000 50,000 Accounts Payable 51,000 15,000 Wages Payable 14,000 6,000 Notes Payable 150,000 50,000 Common Stock 200,000 60,000 Retained Earnings 126,875 48,000 290,000 200,000 Sales Income from Subsidary 25,500 1,027.375 1,027.375 429,000 429,000 Total The book value of the investee's assets are equal to the fair value except for Building & Equipment which are worth $20,000 more Building and Equipment have 10 years of remaining life at time of acquisition. Required 1. Allocation of Acquisition Value 2. Equity entries for 2019 3. Worksheet entries for the 2019 year end consolidation 68,500 85,000 97,000 42,875 350,000 114,000 145,000 35,000 25,000 12,000 23,000 30,000 32,000 14,000 24,000 25,000 150,000 114,000 20,000 10,000 4,000 16,000 20,000 1. The Investor acquired 75% of Investee on January 1, 2019 for $103,500. At acquisition the fair value of the noncontrolling interest was $34,500. Trial Balances for the two entities at December 31, 2019 are: Investor Investee Debit Credit Debit Credit Cash Accounts Receivable Inventory Land Buildings & Equipment Investment in Subsidary Cost of Goods Sold Wage Expense Depreciation Expense Interest Expense Other Expense Dividends Declared Accumulated Depreciation 170,000 50,000 Accounts Payable 51,000 15,000 Wages Payable 14,000 6,000 Notes Payable 150,000 50,000 Common Stock 200,000 60,000 Retained Earnings 126,875 48,000 290,000 200,000 Sales Income from Subsidary 25,500 1,027.375 1,027.375 429,000 429,000 Total The book value of the investee's assets are equal to the fair value except for Building & Equipment which are worth $20,000 more Building and Equipment have 10 years of remaining life at time of acquisition. Required 1. Allocation of Acquisition Value 2. Equity entries for 2019 3. Worksheet entries for the 2019 year end consolidation 68,500 85,000 97,000 42,875 350,000 114,000 145,000 35,000 25,000 12,000 23,000 30,000 32,000 14,000 24,000 25,000 150,000 114,000 20,000 10,000 4,000 16,000 20,000
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Related Book For
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III
Posted Date:
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