Assume that, on January 1, 2018, Pillow Company acquired an 80% interest in Sheet Company for...

   

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Assume that, on January 1, 2018, Pillow Company acquired an 80% interest in Sheet Company for a purchase price that was $650,000 over the book value of the subsidiary's Stockholders' Equity on the acquisition date. Pine uses the equity method to account for its investment in Spruce Co. Pine assigned the acquisition-date AAP as follows: AAP Items PPE Patent Goodwill Total Sales Cost of goods sold Gross Profit Initial Fair Value $350,000 250,000 50,000 $ 650,000 80% of if the Goodwill is allocated to the parent. Pillow and Sheet report the following financial statements December 31, 2021: Income (loss) from subsidiary Operating expenses Net income BOY Retained Earnings Net income Dividends Ending Retained Earnings Income Statement Useful Life (years) 10 5 Indefinite Chest PILLOW $860,000 -458,000 Statement of Retained Earnings PILLOW $878,440 402,000 92,000 -158,000 $336.000 336,000 -175,000 1.039.440 SHEET $750,000 -430.000 320,000 -120,000 $200.000 SHEET $420,000 200,000 -12,500 $607.500 BOY Retained Earnings Net income Dividends Ending Retained Earnings Assets: Cash Accounts receivable Inventory Equity Investment PPE, net Statement of Retained Earnings PILLOW $878,440 336,000 -175,000 1.039.440 Long-term Liabilities Common Stock APIC Retained Earnings Balance Sheet Liabilities and Stockholders' Equity: Current Liabilities PILLOW $55,000 46,000 95,000 968,880 288,060 $1.452.940 $75,000 150,000 63,500 125,000 1,039,440 $1.452,940 SHEET $420,000 200,000 -12,500 $607.500 SHEET $54,000 74,000 90,112 1,873,188 $2.091.300 $400,200 790,000 118,100 175,500 07.500 $2,091,300 a. Prepare a schedule in Excel to summarize the activity for 100% of the AAP [Acquisition Accounting Premium], along with the controlling interest AAP and non-controlling interest AAP. It should look like the table below but all amounts will be filled in. Use the Excel file template available in Blackboard and open a new tab to prepare the schedule below. 100% PPE Patent Goodwill Total 80% P PPE Patent Goodwill Total 20% NCI PPE Patent Goodwill Total Unamort. 2018 AAP 1/1/18 $350,000 250,000 $50,000 $650,000 $280,000 200,000 $40,000 $520,000 $70,000 50,000 10,000 $130,000 Amortiz 0 0 0 Unamort. 2019 AAP 12/31/18 50,000 Amortiz 10,000 0 40.000 0 0 Unamort 2020 AAP 12/31/19 50,000 10,000 Amortiz 40,000 0 0 80% of Book Value of Net Assets of Subsidiary + Parent's Share of Unamortized AAP 0 Unamort. 2021 AAP 12/31/20 50.000 40.000 10,000 Amortiz 0 0 0 Unamort AAP 12/31/21 c. Reconstruct the activity in the parent's [Pillow] Equity Investment "T" account below: Equity Investment $50,000 $40,000 b. Compute the pre-consolidation Equity Investment account beginning and end of year balances for 2021. Make sure your year-end balance agrees with the amount on Pillow's balance sheet. 1/1/2021 12/31/21 10,000 c. Reconstruct the activity in the parent's [Pillow] Equity Investment "T" account below: Equity Investment d. Compute the owner's equity attributable to the non-controlling interest beginning and ending balances in a similar fashion to part "b" above: 12/31/21 20% NCI x Book Value of Net Assets of Subsidiary +NCI Share of Unamortized AAP e. 1/1/2021 On the separate Excel template provided, complete the consolidation worksheet including the necessary consolidation journal entries that would be made at 12/31/21. ["CEAD"]. Assume that, on January 1, 2018, Pillow Company acquired an 80% interest in Sheet Company for a purchase price that was $650,000 over the book value of the subsidiary's Stockholders' Equity on the acquisition date. Pine uses the equity method to account for its investment in Spruce Co. Pine assigned the acquisition-date AAP as follows: AAP Items PPE Patent Goodwill Total Sales Cost of goods sold Gross Profit Initial Fair Value $350,000 250,000 50,000 $ 650,000 80% of if the Goodwill is allocated to the parent. Pillow and Sheet report the following financial statements December 31, 2021: Income (loss) from subsidiary Operating expenses Net income BOY Retained Earnings Net income Dividends Ending Retained Earnings Income Statement Useful Life (years) 10 5 Indefinite Chest PILLOW $860,000 -458,000 Statement of Retained Earnings PILLOW $878,440 402,000 92,000 -158,000 $336.000 336,000 -175,000 1.039.440 SHEET $750,000 -430.000 320,000 -120,000 $200.000 SHEET $420,000 200,000 -12,500 $607.500 BOY Retained Earnings Net income Dividends Ending Retained Earnings Assets: Cash Accounts receivable Inventory Equity Investment PPE, net Statement of Retained Earnings PILLOW $878,440 336,000 -175,000 1.039.440 Long-term Liabilities Common Stock APIC Retained Earnings Balance Sheet Liabilities and Stockholders' Equity: Current Liabilities PILLOW $55,000 46,000 95,000 968,880 288,060 $1.452.940 $75,000 150,000 63,500 125,000 1,039,440 $1.452,940 SHEET $420,000 200,000 -12,500 $607.500 SHEET $54,000 74,000 90,112 1,873,188 $2.091.300 $400,200 790,000 118,100 175,500 07.500 $2,091,300 a. Prepare a schedule in Excel to summarize the activity for 100% of the AAP [Acquisition Accounting Premium], along with the controlling interest AAP and non-controlling interest AAP. It should look like the table below but all amounts will be filled in. Use the Excel file template available in Blackboard and open a new tab to prepare the schedule below. 100% PPE Patent Goodwill Total 80% P PPE Patent Goodwill Total 20% NCI PPE Patent Goodwill Total Unamort. 2018 AAP 1/1/18 $350,000 250,000 $50,000 $650,000 $280,000 200,000 $40,000 $520,000 $70,000 50,000 10,000 $130,000 Amortiz 0 0 0 Unamort. 2019 AAP 12/31/18 50,000 Amortiz 10,000 0 40.000 0 0 Unamort 2020 AAP 12/31/19 50,000 10,000 Amortiz 40,000 0 0 80% of Book Value of Net Assets of Subsidiary + Parent's Share of Unamortized AAP 0 Unamort. 2021 AAP 12/31/20 50.000 40.000 10,000 Amortiz 0 0 0 Unamort AAP 12/31/21 c. Reconstruct the activity in the parent's [Pillow] Equity Investment "T" account below: Equity Investment $50,000 $40,000 b. Compute the pre-consolidation Equity Investment account beginning and end of year balances for 2021. Make sure your year-end balance agrees with the amount on Pillow's balance sheet. 1/1/2021 12/31/21 10,000 c. Reconstruct the activity in the parent's [Pillow] Equity Investment "T" account below: Equity Investment d. Compute the owner's equity attributable to the non-controlling interest beginning and ending balances in a similar fashion to part "b" above: 12/31/21 20% NCI x Book Value of Net Assets of Subsidiary +NCI Share of Unamortized AAP e. 1/1/2021 On the separate Excel template provided, complete the consolidation worksheet including the necessary consolidation journal entries that would be made at 12/31/21. ["CEAD"].