5. QUESTION: USING THE INFORMATION FROM PROBLEM 4 & ASSUMING THE BEGINNING OF THE YEAR (20X3) BALCE IN THE INVESTMENT IN A (ADAMS COMPANY) ACCOUNT IS $716,000 COMPLETE THE CONSOLIDATED WORKSHEET BELOW.

TO AID IN THIS INFORMATION FROM PROBLEM 4 IS REPEATED : Monroe company purchased 80% of adams company on Jan 1, 20x1, the purchase price paid was $600,000. The book value of Adams on that day was $500,000. Excess of cost over book value is due to goodwill. Included in Adam's income are the intercompany sales to Monroe of $40,000 with a cost to Adams of $25,000. 30% of this inventory is on hand in the Monroe inventory at Dec 31, 20x3. In addition, inventory sold at a profit of $5,000 was in the inventory of Monroe at Dec 31,20x2.

Info from problems solved in question 4 : Schedule of Excess of Cost over Book Value:-

Particulars	Amount
Purchase price	$600,000
Fair value (80%*$500,000)	-$400,000
	$200,000

2. Journal entries:-

Date	Particulars	Debit	Credit
Jan 1, 20X1	Investment in Adam's company	$600,000
	Cash		$600,000
Dec 31, 20X3	Accounts payable inventory	$4,500
	Profit on sold inventory		$4,500
Dec 31, 20X3	Investment in Adam's company ($100,000*0.80)	$80,000
	Income form investment		$80,000

Notes

Profit on sold inventory

Step 1= Percentage = ($40,000-$25,000)/$40,000*100

Percentage = 37.5%

Step 2:- Unsold stock = $40,000*0.30 = $12,000

Step 3:- Profit on sold inventory = $12,000*0.375 = $4,500

BELOW ARE THE BALANCES OF ACCOUNTS Of MONROE AND ADAMS AT DEC 31,2023 COMPLETE THE CONSOLIDATED WORKSHEET:

PLEASE COMPLETE THE CONSOLIDATED WORKSHEET I HAVE PROVIDED ALL INFORMATION I HAVE

Using the information in Problem 4 and assuming the beginning of the year (20x3) balance in the Investment in A account is $716,000 complete the consolidated worksheet below. To aid in this, Information from Problem 4 is repeated below. Monroe Company purchased 80% of Adams Company on January 1, 20x1. The purchase price paid was $600,000. On that day, the book value of Adams was $500,000. Excess of cost over book value is due to goodwill. Included in Adams's income are intercompany sales to Monroe of $40,000 with a cost to Adams of $25,000. 30% of this inventory is on hand in the Monroe inventory at December 31, 20X3. In addition, inventory sold at a profit of $5,000 was in the inventory of Monroe at December 31, 20x2. Consolidated Bal. Below are the balances of accounts of Monroe and Adams at December 31, 20X3. Consolidation Entries Monroe Adams Dr. Cr. Sales $50,000 $250,000 $30,000 $150,000 CGS & Expenses Income from S. Income NCI Controlling Interest $100,000 Retained Earnings Jan 1, 10 Dividends Retained Earnings Dec 31, 10 $700,000 100,000 $190,000 0 $290,000 Cash Receivables Inventory Equipment (net) Patents Investment in A $120,000 90,000 100,000 100,000 $30,000 70,000 100,000 350,000 50,000 Goodwill Land Building (net) 100,000 120,000 100,000 100,000 $800,000 Accounts Payable Capital Stock Non-Controlling Interest $126,000 600,000 $50,000 460,000 Retained Earnings (12/31) 290,000 $800,000