The Patterson Corporation acquired 70 percent of the 100,000 outstanding voting shares of Shapiro, Inc., for...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The Patterson Corporation acquired 70 percent of the 100,000 outstanding voting shares of Shapiro, Inc., for $7.20 per share on January 1, 2021. The remaining 30 percent of Shapiro's shares traded actively at $4.80 per share before and after Patterson's acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Shapiro's underlying accounts except that a building with a 5-year future life was undervalued (i.e., book value is lower than fair value) by $85,500 and a fully amortized trademark (i.e., zero book value) with an estimated 10-year remaining life had a $64,000 fair value. At the acquisition date, Shapiro reported common stock of $100,000 and a retained earnings balance of $226,500. Following are the separate financial statements for the year ending December 31, 2023: Patterson Corporation $ (641,000) Shapiro Inc. $ (399,000) 198,000 176,000 273,000 126,000 (51,450) -0- Sales Cost of goods sold Operating expenses Equity income Net income Retained earnings, 1/1 $ (221,450) $ (97,000) (799,200) (386,500) Net income (above) (221,450) (97,000) Dividends declared 70,000 18,000 Retained earnings, 12/31 $ (950,650) $ (465,500) Current assets 133,700 120,500 Investment in Shapiro 621,950 -0- Buildings and equipment (net) Trademarks Total assets 887,000 149,000 335,000 236,000 $ 1,791,650 $ 691,500 Liabilities Common stock (535,000) (306,000) (126,000) (100,000) Retained earnings, 12/31 (above) Total liabilities and equities (950,650) (465,500) $ (1,791,650) $ (691,500) Credit balances are in parentheses. At year-end, there were no intra-entity receivables or payables. Required: 1. (12 points) Prepare an acquisition-date fair value allocation schedule. Determine the annual amortization of excess value for the investment in Shapiro, the amount of goodwill, if any, and how the goodwill will be allocated between Patterson and the noncontrolling interest. 2. (6 points) Given the information provided, determine all entries made to Investment in Shapiro in Patterson's book during 2023. Show the t-account, the beginning Investment balance on January 1, 2023, all entries posted during 2023, and the ending balance on December 31, 2023. (Hint: Work backwards from the Investment balance on 12.31.23 (given) to obtain the Investment balance on 1.1.23) 3. (32 points) Use the provided worksheet (in Excel) to consolidate these two companies as of December 31, 2023 and do the following: (20 points) Prepare a list of consolidation entries (12 points) Determining the consolidated totals Patterson Corporation and Shapiro, Inc. Consolidation Worksheet For Year Ending December 31, 2023 Consolidation Entries Accounts Sales Cost of goods sold Operating expenses Equity Income in Shapiro Separate company net income Patterson Corporation Shapiro Inc. -641,000 -399,000 198,000 176,000 273,000 126,000 -51,450 0 -221,450 -97,000 Consolidated net income NI attributable to noncontrolling interest NI attributable to Patterson Corp. Retained earnings, 1/1 -799,200 -386,500 Net income (above) -221,450 -97,000 Dividends declared 70,000 18.000 Retained earnings, 12/31 -950,650 -465,500 Current assets 133,700 120,500 Investment in Shapiro 621,950 Buildings and equipment (net) 887,000 335,000 Trademarks 149,000 236,000 Goodwill Total assets 1,791,650 691,500 Liabilities -535,000 -126,000 Common stock -306,000 -100,000 Retained earnings, 12/31 (above) -950,650 -465,500 NCI in Shapiro, 1/1 NCI in Shapiro, 12/31 Total liabilities and equities -1,791,650 -691,500 Debit Consolidated Credit Interest Totals The Patterson Corporation acquired 70 percent of the 100,000 outstanding voting shares of Shapiro, Inc., for $7.20 per share on January 1, 2021. The remaining 30 percent of Shapiro's shares traded actively at $4.80 per share before and after Patterson's acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Shapiro's underlying accounts except that a building with a 5-year future life was undervalued (i.e., book value is lower than fair value) by $85,500 and a fully amortized trademark (i.e., zero book value) with an estimated 10-year remaining life had a $64,000 fair value. At the acquisition date, Shapiro reported common stock of $100,000 and a retained earnings balance of $226,500. Following are the separate financial statements for the year ending December 31, 2023: Patterson Corporation $ (641,000) Shapiro Inc. $ (399,000) 198,000 176,000 273,000 126,000 (51,450) -0- Sales Cost of goods sold Operating expenses Equity income Net income Retained earnings, 1/1 $ (221,450) $ (97,000) (799,200) (386,500) Net income (above) (221,450) (97,000) Dividends declared 70,000 18,000 Retained earnings, 12/31 $ (950,650) $ (465,500) Current assets 133,700 120,500 Investment in Shapiro 621,950 -0- Buildings and equipment (net) Trademarks Total assets 887,000 149,000 335,000 236,000 $ 1,791,650 $ 691,500 Liabilities Common stock (535,000) (306,000) (126,000) (100,000) Retained earnings, 12/31 (above) Total liabilities and equities (950,650) (465,500) $ (1,791,650) $ (691,500) Credit balances are in parentheses. At year-end, there were no intra-entity receivables or payables. Required: 1. (12 points) Prepare an acquisition-date fair value allocation schedule. Determine the annual amortization of excess value for the investment in Shapiro, the amount of goodwill, if any, and how the goodwill will be allocated between Patterson and the noncontrolling interest. 2. (6 points) Given the information provided, determine all entries made to Investment in Shapiro in Patterson's book during 2023. Show the t-account, the beginning Investment balance on January 1, 2023, all entries posted during 2023, and the ending balance on December 31, 2023. (Hint: Work backwards from the Investment balance on 12.31.23 (given) to obtain the Investment balance on 1.1.23) 3. (32 points) Use the provided worksheet (in Excel) to consolidate these two companies as of December 31, 2023 and do the following: (20 points) Prepare a list of consolidation entries (12 points) Determining the consolidated totals Patterson Corporation and Shapiro, Inc. Consolidation Worksheet For Year Ending December 31, 2023 Consolidation Entries Accounts Sales Cost of goods sold Operating expenses Equity Income in Shapiro Separate company net income Patterson Corporation Shapiro Inc. -641,000 -399,000 198,000 176,000 273,000 126,000 -51,450 0 -221,450 -97,000 Consolidated net income NI attributable to noncontrolling interest NI attributable to Patterson Corp. Retained earnings, 1/1 -799,200 -386,500 Net income (above) -221,450 -97,000 Dividends declared 70,000 18.000 Retained earnings, 12/31 -950,650 -465,500 Current assets 133,700 120,500 Investment in Shapiro 621,950 Buildings and equipment (net) 887,000 335,000 Trademarks 149,000 236,000 Goodwill Total assets 1,791,650 691,500 Liabilities -535,000 -126,000 Common stock -306,000 -100,000 Retained earnings, 12/31 (above) -950,650 -465,500 NCI in Shapiro, 1/1 NCI in Shapiro, 12/31 Total liabilities and equities -1,791,650 -691,500 Debit Consolidated Credit Interest Totals
Expert Answer:
Related Book For
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
Posted Date:
Students also viewed these accounting questions
-
make this shorter: In summary, the ANOVA test showed significant differences in MAAP ELA scores between third to sixth graders, with scores decreasing as grade level increased. The third grade had...
-
The use of quantitative capnography in intubated pt's does what?
-
The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.90 per share on January 1, 2017. The remaining 20 percent of Devine's shares also traded...
-
Starting with acetylene as your only source of carbon atoms, identify how you would prepare each member of the following homologous series of aldehydes: a. Ethanal b. Propanal c. Butanal d. Pentanal
-
Briefly describe various types of assisted reproductive technologies.
-
Find the sum of the given vectors and illustrate geometrically. 0, 1, 2, 0, 0, 3
-
Find the percentage in the following: 1. Total is 300 , percentage of the total is 60 . 2. Total is 440 , percentage of the total is 176.
-
Flexible budgets, 4-variance analysis. (CMA, adapted) Nolton Products uses standard costing allocates manufacturing overhead (both variable and fixed)to products on the basis of standard direct...
-
Use the information below, which relates to Duran Inc, to answer the following question. Sales in December were $460,000. Projected sales for the first quarter of 2015 are: January: $1,080,000...
-
Forecasting with the Parsimonious Method and Estimating Share Value Using the ROPI Model Following are income statements and balance sheets for Cisco Systems. Cisco Systems Consolidated Statements of...
-
+1 For the network of Fig. 9.88. a. Determine VGSQ and IDQ VGS=-ID*Rs ID=IDss(1-VGS/Vp)^2 ~ 1 Z H 0.1 F 1 1.2 18 V Q ' 3 Cwi Cwo 3 pF = 5 pF = = 4.7 F 16 IDSS = 6 mA Vp = -6 Vrd = 10 F Cgd = 4...
-
A product is sold at $100 and its contribution margin percentage is 20%. It also has a fixed cost of $800,000. What is the breakeven sales revenue?
-
Selected transactions of the City of Miser Station General Fund for the 20X1 fiscal year are presented on the following page. All amounts are in thousands of dollars. Prepare the journal entries for...
-
M/s Swadeshi Cotton Mills Ltd. take a periodic inventory of their stock of chemically at the end of each month. The physical inventory taken on 30 shows a balance of 1,000 litres of chemically in...
-
The Company Charger Valles, SL is dedicated to the manufacture of chargers for electronic devices. They make two models: the standard one and the fast charging one. For manufacturing they use four...
-
1.McWevar Corporation employs a weighted average process costing system for its products. One product passes through three departments (Mixing, Baking, and Packaging) during production. The following...
-
Adjusted trial balances for Garboz Company, an industrial recycler, at December 3 1 of the current and prior year follow. Debits, December 3 1 Current Year Prior Year Cash $ 1 4 , 0 0 0 $ 1 2 , 8 0 0...
-
Write a paper detailing a geographic information system (GIS) of your own design that would utilize data in an original manner.
-
In 2010, the City of Coyote received a $320,000 cash grant from the state to stop air pollution. Assume that although a special revenue fund could have been set up, the money remained in the General...
-
Riggins Company accounts for its investment in Bostic Company using the equity method. During the past fiscal year, Bostic reported an extraordinary gain on its income statement. How would this...
-
Under what circumstances might it be acceptable for a company preparing IFRS financial statements to follow an accounting treatment developed by the FASB?
-
Initially, a 200-gallon tank is filled with pure water. At time \(t=0\), a salt concentration with 3 pounds of salt per gallon is added to the container at the rate of 4 gallons per minute, and the...
-
You make 2 quarts of salsa for a party. The recipe calls for 5 teaspoons of lime juice per quart, but you had accidentally put in 5 tablespoons per quart. You decide to feed your guests the salsa...
-
Consider the epidemic model leading to the system in Expression (3.153). Choose the constants as \(a=2.0\) days \(^{-1}, d=3.0\) days \(^{-1}\), and \(r=1.0\) day \(^{-1}\). What are the eigenvalues...
Study smarter with the SolutionInn App