Prepare the corresponding consolidating worksheets based on the following facts. Companies involved: Parent and Sub. Date...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Prepare the corresponding consolidating worksheets based on the following facts. Companies involved: Parent and Sub. Date of acquisition: Jan. 1, 20X3 Date of the worksheets you must prepare: December 31, 11 Percentage of common shares of S owned by P Price paid by P Aditional paid-in capital Retained earnings At the time of acquisition these were some values concerning S: Common stock Inventories Other current assets Plant & equipment, remaining life: Land Long term liabilities; remaining life: Intangibles amortization: Intercompany transactions: Upstream inventory sales % in ending inventory Gross profit rate on sales Upstream building sale, Dec. 31. Sold for Book value at time of sale Remaining life: % of S bonds purchased by P. Jan. Price paid BV at that date Remaining life: Maturity value of acquired bonds Years Required: 1. Complete the worksheets for 20X4-6. <1 <1 8 56 "1 10 20X3 20X4 20X5 20X6 $ 20X4 142,500 7.50% 37.50%! $ 1,900,000 S 760,000 $ 45.00% 55% $ 1,551,104 $ 1,534,930 75% $ 5,700,000 $ 1,567,500 59 59 59 S 950,000 950,000 S 627,000 FMV-BV $ $ 760,000 285,000 $ 1,900,000 $ 1,330,000 $ 285,000 55555 20X5 121,125 S 9.00%: $ 20X6 129,604 10.80% 54.00%; Reconciliation: Investment to S's Equity Investment, 12/31 Removal of unamortized differential: Inventories Other current assets Plant & equipment Land L. T. liabilities Intangibles Unamortized differential S's stockholders' equity P's ownership interest Difference Reconciliation: Non-contr. Interest to S's Equity: S's stockholders' equity X Non-contr. interest percentage Unrealized intercompany balances in RE-S Non-contr. interest balance at year end Unamortized differential 20X3 Excess Difference Initial (570,000) (213,750) (1,425,000) (997,500) (213,750) (384,750) 3,828,911 75% Amortiz. 570,000 213,750 178,125 42,750 64,125 1,869,228 (912,000) 957,228 5,607,683 (1,246,875) (997,500) (171,000) (320,625) (2,736,000) 2,871,683 2,871,683 957,228 957,228 Issuer's Facts: Face value Stated Rate Effective Rate Interest Pmts. Bonds Life At issuance: PV of Principal PV of Interest Bond price Date 1/1/20X0 12/31/X0 12/31/X1 12/31/X2 12/31/X3 12/31/X4 12/31/X5 12/31/X6 12/31/X7 12/31/X8 12/31/X9 2,850,000 6.00% 6.50% 171,000 10 $1,518,269 $1,229,290 $2,747,559 Issuing Company Payment 171,000 171,000 171,000 171,000 171,000 171,000 171,000 171,000 171,000 171,000 6.50% Interest Exp. 178,591 179,085 179,610 180,170 180,766 181,401 182,077 182,797 183,564 184,380 Acquirer's Facts: Acquired Jan. % acquired Face value Stated Rate Effective Rate Interest Pmts. Bonds Life At bond purchase: PV of Principal PV of Interest Bond price Carrying Value $2,747,559 2,755,151 2,763,235 2,771,846 2,781,016 2,790,782 2,801,182 2,812,259 2,824,056 2,836,620 2,850,000 20X5 55% 1,567,500 6.00% 6.25% 94,050 5 $1,157,612 $393,493 $1,551,104 Date 1/1/X5 12/31/X5 12/31/X6 12/31/X7 12/31/X8 12/31/X9 Purchasing Company 6.25% Interest Rev. Collections 94,050 94,050 94,050 94,050 94,050 96,944 97,125 97,317 97,521 97,738 Carrying Value $1,551,104 1,553,998 1,557,073 1,560,340 1,563,812 1,567,500 Income Statement Sales Income from S Cost of goods sold Operating expenses Interest Expense Gain on building sale Non-contr. interest income Net income Retained Earnings Retained earnings--P, 1/1/X4 Retained earnings--S, 1/1/X4 Net income Dividends Retaind earnings--12/31/X4 Balance Sheet Cash Accounts receivable Inventories Other current assets Investment in S Plant and equipment--net Land Intangibles Total assets Accounts payable Notes Payable Bonds Payable, 10% Capital stock Additional paid in capital Retained earnings Non-contr. interest, 12/31/X4 Total liabilities and equity Proofs of balance Parent 19,950,000 1,211,607 (13,965,000) (2,992,500) 4,204,107 8,561,589 4,204,107 (1,996,951) 10,768,746 1,496,250 1,995,000 2,194,500 8,126,647 5,700,849 4,750,000 100,000 24,363,246 1,995,000 199,500 9,500,000 1,900,000 10,768,746 24,363,246 0 Subsidiary 8,075,000 (4,683,500) (1,211,250) (180,766) 1,140,000 3,139,484 1,928,911 3,139,484 (1,491,255) 3,577,140 457,809 1,098,741 1,007,179 915,617 3,479,345 2,197,481 9,156,171 807,500 80,750 2,790,782 950,000 950,000 3,577,140 9,156,171 0 Adjusts, and Elims. (142,500) (1,211,607) 142,500 (1,140,000) (957,228) (1,928,911) 1,491,255 (570,000) (1,140,000) (5,700,849) 1,662,500 1,330,000 (272,563) (171,000) (950,000) (950,000) (3,577,140) 957,228 Cons. 27,882,500 (18,506,000) (4,203,750) (180,766) (957,228) 4,034,756 8,561,589 7,343,591 (1,996,951) 13,908,230 1,954,059 3,093,741 2,631,679 7,902,264 9,891,845 3,627,481 (272,563) 28,828,505 2,802,500 109,250 2,790,782 9,500,000 1,900,000 10,768,746 957,228 28,828,505 Prepare the corresponding consolidating worksheets based on the following facts. Companies involved: Parent and Sub. Date of acquisition: Jan. 1, 20X3 Date of the worksheets you must prepare: December 31, 11 Percentage of common shares of S owned by P Price paid by P Aditional paid-in capital Retained earnings At the time of acquisition these were some values concerning S: Common stock Inventories Other current assets Plant & equipment, remaining life: Land Long term liabilities; remaining life: Intangibles amortization: Intercompany transactions: Upstream inventory sales % in ending inventory Gross profit rate on sales Upstream building sale, Dec. 31. Sold for Book value at time of sale Remaining life: % of S bonds purchased by P. Jan. Price paid BV at that date Remaining life: Maturity value of acquired bonds Years Required: 1. Complete the worksheets for 20X4-6. <1 <1 8 56 "1 10 20X3 20X4 20X5 20X6 $ 20X4 142,500 7.50% 37.50%! $ 1,900,000 S 760,000 $ 45.00% 55% $ 1,551,104 $ 1,534,930 75% $ 5,700,000 $ 1,567,500 59 59 59 S 950,000 950,000 S 627,000 FMV-BV $ $ 760,000 285,000 $ 1,900,000 $ 1,330,000 $ 285,000 55555 20X5 121,125 S 9.00%: $ 20X6 129,604 10.80% 54.00%; Reconciliation: Investment to S's Equity Investment, 12/31 Removal of unamortized differential: Inventories Other current assets Plant & equipment Land L. T. liabilities Intangibles Unamortized differential S's stockholders' equity P's ownership interest Difference Reconciliation: Non-contr. Interest to S's Equity: S's stockholders' equity X Non-contr. interest percentage Unrealized intercompany balances in RE-S Non-contr. interest balance at year end Unamortized differential 20X3 Excess Difference Initial (570,000) (213,750) (1,425,000) (997,500) (213,750) (384,750) 3,828,911 75% Amortiz. 570,000 213,750 178,125 42,750 64,125 1,869,228 (912,000) 957,228 5,607,683 (1,246,875) (997,500) (171,000) (320,625) (2,736,000) 2,871,683 2,871,683 957,228 957,228 Issuer's Facts: Face value Stated Rate Effective Rate Interest Pmts. Bonds Life At issuance: PV of Principal PV of Interest Bond price Date 1/1/20X0 12/31/X0 12/31/X1 12/31/X2 12/31/X3 12/31/X4 12/31/X5 12/31/X6 12/31/X7 12/31/X8 12/31/X9 2,850,000 6.00% 6.50% 171,000 10 $1,518,269 $1,229,290 $2,747,559 Issuing Company Payment 171,000 171,000 171,000 171,000 171,000 171,000 171,000 171,000 171,000 171,000 6.50% Interest Exp. 178,591 179,085 179,610 180,170 180,766 181,401 182,077 182,797 183,564 184,380 Acquirer's Facts: Acquired Jan. % acquired Face value Stated Rate Effective Rate Interest Pmts. Bonds Life At bond purchase: PV of Principal PV of Interest Bond price Carrying Value $2,747,559 2,755,151 2,763,235 2,771,846 2,781,016 2,790,782 2,801,182 2,812,259 2,824,056 2,836,620 2,850,000 20X5 55% 1,567,500 6.00% 6.25% 94,050 5 $1,157,612 $393,493 $1,551,104 Date 1/1/X5 12/31/X5 12/31/X6 12/31/X7 12/31/X8 12/31/X9 Purchasing Company 6.25% Interest Rev. Collections 94,050 94,050 94,050 94,050 94,050 96,944 97,125 97,317 97,521 97,738 Carrying Value $1,551,104 1,553,998 1,557,073 1,560,340 1,563,812 1,567,500 Income Statement Sales Income from S Cost of goods sold Operating expenses Interest Expense Gain on building sale Non-contr. interest income Net income Retained Earnings Retained earnings--P, 1/1/X4 Retained earnings--S, 1/1/X4 Net income Dividends Retaind earnings--12/31/X4 Balance Sheet Cash Accounts receivable Inventories Other current assets Investment in S Plant and equipment--net Land Intangibles Total assets Accounts payable Notes Payable Bonds Payable, 10% Capital stock Additional paid in capital Retained earnings Non-contr. interest, 12/31/X4 Total liabilities and equity Proofs of balance Parent 19,950,000 1,211,607 (13,965,000) (2,992,500) 4,204,107 8,561,589 4,204,107 (1,996,951) 10,768,746 1,496,250 1,995,000 2,194,500 8,126,647 5,700,849 4,750,000 100,000 24,363,246 1,995,000 199,500 9,500,000 1,900,000 10,768,746 24,363,246 0 Subsidiary 8,075,000 (4,683,500) (1,211,250) (180,766) 1,140,000 3,139,484 1,928,911 3,139,484 (1,491,255) 3,577,140 457,809 1,098,741 1,007,179 915,617 3,479,345 2,197,481 9,156,171 807,500 80,750 2,790,782 950,000 950,000 3,577,140 9,156,171 0 Adjusts, and Elims. (142,500) (1,211,607) 142,500 (1,140,000) (957,228) (1,928,911) 1,491,255 (570,000) (1,140,000) (5,700,849) 1,662,500 1,330,000 (272,563) (171,000) (950,000) (950,000) (3,577,140) 957,228 Cons. 27,882,500 (18,506,000) (4,203,750) (180,766) (957,228) 4,034,756 8,561,589 7,343,591 (1,996,951) 13,908,230 1,954,059 3,093,741 2,631,679 7,902,264 9,891,845 3,627,481 (272,563) 28,828,505 2,802,500 109,250 2,790,782 9,500,000 1,900,000 10,768,746 957,228 28,828,505
Expert Answer:
Answer rating: 100% (QA)
Answer Consolidation workpapers for Par Corporation and Subsidiary for the year ended December 31 2011 in thousands Par 70 Sul Adjustments and Elimina... View the full answer
Related Book For
Financial accounting
ISBN: 978-0132751124
9th edition
Authors: Walter T. Harrison Jr., Charles T. Horngren, C. William Thom
Posted Date:
Students also viewed these accounting questions
-
Martinez Co. borrowed $69,600 on March 1 of the current year by signing a 60-day, 11%, interest-bearing note. Assuming a 360-day year, when the note is paid on April 30, the entry to record the...
-
If you apply a load N (kN) by hand on the machine below can you determine the ground reaction force exerted at point E. (Hint: CD is a two force member) a/3 4/3a a/2 65 JE al2 4/3 a
-
(Multiple Choice) Questions 13 are based on the following facts: Fred Harris began a music business in July 2012. Harris prepares monthly financial statements and uses the accrual basis of...
-
I recently heard my neighbor discussing how one of our other neighbors lost his job. My neighbor assumed that the person who lost his job was probably lazy or not smart enough for the job, without...
-
The ACL in Figure 6-10 is in effect. A packet containing a TCP ACK segment reaches a stateful packet inspection firewall from the outside. What actions will the SPI firewall take? Explain.
-
A pressurized steel tank is constructed with a helical weld that makes an angle a = 55° with the longitudinal axis (see figure). The tank has radius r = 0.6 m, wall thickness t = 18 mm, and...
-
Consider the regression model fit to the baseball data in Table B.22, using team ERA to predict the number of wins. a. Construct a normal probability plot of the residuals. Is there any indication of...
-
On January 2, 20X8, Primary Corporation acquired 100 percent of Street Companys outstanding common stock. In exchange for Streets stock, Primary issued bonds payable with a par and fair value of...
-
find lim x-2x =-2-x-4x+4
-
A typical tube-style incandescent light bulb lasts for 1,000 hours and is available to consumers for $3.00 per bulb. A manufacturer has produced a tube-style halogen light bulb that gives the same...
-
Create a Python program to calculate the average miles per gallon obtained on a trip. Given/inputs car name, the amount of gas used and the number of miles driven. (The formula to calculate miles per...
-
Question: Your company, IRTC Manufacturing Enterprises, is upgrading its legacy billing system. The system was installed originally ten years ago, and has been upgraded according to the vendor's...
-
Question: Given the master lock expects its wholesale distributors to provide virtually all the support needed by retailers, what kind of support do you think the wholesaler distributors should...
-
TRAINING AT THE SPICES FACTORY Ana Maria is an employee at the Mak Long Spice Factory Sdn Bhd, in Butterworth, Penang. Ana Maria has five years of experience in Mak Long's Date Spice Division....
-
Which of the changes at Mattel are emergent, and which are planned? What is your assessment of Ynon Kreizs changes, given the challenges facing the company? What imageor imagesof change management...
-
A memoryless binary source with output alphabet = {1,0) and corresponding probabilities p(X =1) = 0.7 and p(X = 0) = 0.3 produces sequences of length 50. (a) (10 pts) Find the most probable sequence...
-
Nuclear reactor uses 'moderator' materials such as graphite to to eliminate thermal neutrons to reduce the speed of fast neutrons increase the number of fast neutrons to cause -235 to split ?Explain
-
Sundial Technologies produces and sells customized network systems in New Brunswick. The company offers a 60-day, all software and labor-and an extra 90-day, parts-only- warranty on all of its...
-
Evan Neal operates a roller skating center. He has just received the monthly bank statement at January 31 from Citizen National Bank, and the statement shows an ending balance of $575. Listed on the...
-
Journalize the adjusting entry needed on December 31, the end of the current accounting period, for each of the following independent cases affecting Woods Corp. Include an explanation for each...
-
Assume that on September 30, 2011, Grandair, the national airline of Germany, purchased a Jumbo aircraft at a cost of 41,000,000 ( is the symbol for the euro). Grandair expects the plane to remain...
-
Holland at Home is considering introducing a variation of its current breakfast cereal, Zonnatura Regular Muesli Rich. The new cereal will be similar to the old with the exception that it will...
-
TSMC Corporation is considering selling one of its old wafer fabrication machines. The machine, purchased for \($3,000,000\) 5 years ago, had an expected life of 10 years and an expected salvage...
-
Assume that Fiskars Finland plans to invest in a new project that will annually generate revenues of \($2.3\) million. Cash expenses including both fixed and variable costs will be \($950,000,\) and...
Study smarter with the SolutionInn App