Item DR. Joey Co. CR. DR. Legoria Co CR Cash 19,500 21,000 Accounts Receivable 70,000 12,000...

Transcribed Image Text:

Item DR. Joey Co. CR. DR. Legoria Co CR Cash 19,500 21,000 Accounts Receivable 70,000 12,000 Inventory 95,000 57,000 Land 45,000 25,000 Building and equipment 355,000 150,000 Investment in Legoria 130,000 Cost of Goods Sold 125,000 110.000 Wage Expense 42,000 27,000 Depreciation Expense 25,000 10,000 Interest Expense 12,000 4,000 Other Expenses 13,500 5,000 Dividends Declared and paid 30,000 16,000 Accumulated Depreciation 145,000 40,000 Accounts Payable 45,000 16,000 Wages Payable 28,000 14,000 Notes Payable 165,000 87,000 Common Stock 200,000 60,000 Retained Earnings, 1/1/2024 102,000 40,000 Sales 260,000 180,000 Equity in Earnings of Legoria 12,000 Joey Corporation acquired 100 percent of Legoria Company's common stock on January 1, 2024, for cash paying $134,000. At that date, the fair value of Legeria's Buildings and Equipment was $20,000 more than book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, the management of Joey CO. concluded on December 31, 2024, that the goodwill involved in the acquisition of Legoria Co. shares has been impaired and the confect carrying value was $4,000. Trial balance data for Joey Co and Legoria Co. are presented above. NOTE that this Trial balance uses Accumulated Depreciation which would need to accounted for in your entries. Required: 1). Give all the journal entries that Joey Co. would make on "ITS" books to account for its investment in Legoria Co. using the Full Equity Method. 2), Would Joey Co need a Conversion Entry (C*) to finish the Consolidation. Explain your answer. 3)Give all of the Consolidation [Elimination entries] needed to prepare Consolidated Financial Statements for the year ended December 31, 2024, and show the Consolidated Income Statement, Retained Earnings and Balance Sheet. Note that Accumulated Depreciation accounts are used by Joey and Legoria Co's. Item DR. Joey Co. CR. DR. Legoria Co CR Cash 19,500 21,000 Accounts Receivable 70,000 12,000 Inventory 95,000 57,000 Land 45,000 25,000 Building and equipment 355,000 150,000 Investment in Legoria 130,000 Cost of Goods Sold 125,000 110.000 Wage Expense 42,000 27,000 Depreciation Expense 25,000 10,000 Interest Expense 12,000 4,000 Other Expenses 13,500 5,000 Dividends Declared and paid 30,000 16,000 Accumulated Depreciation 145,000 40,000 Accounts Payable 45,000 16,000 Wages Payable 28,000 14,000 Notes Payable 165,000 87,000 Common Stock 200,000 60,000 Retained Earnings, 1/1/2024 102,000 40,000 Sales 260,000 180,000 Equity in Earnings of Legoria 12,000 Joey Corporation acquired 100 percent of Legoria Company's common stock on January 1, 2024, for cash paying $134,000. At that date, the fair value of Legeria's Buildings and Equipment was $20,000 more than book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, the management of Joey CO. concluded on December 31, 2024, that the goodwill involved in the acquisition of Legoria Co. shares has been impaired and the confect carrying value was $4,000. Trial balance data for Joey Co and Legoria Co. are presented above. NOTE that this Trial balance uses Accumulated Depreciation which would need to accounted for in your entries. Required: 1). Give all the journal entries that Joey Co. would make on "ITS" books to account for its investment in Legoria Co. using the Full Equity Method. 2), Would Joey Co need a Conversion Entry (C*) to finish the Consolidation. Explain your answer. 3)Give all of the Consolidation [Elimination entries] needed to prepare Consolidated Financial Statements for the year ended December 31, 2024, and show the Consolidated Income Statement, Retained Earnings and Balance Sheet. Note that Accumulated Depreciation accounts are used by Joey and Legoria Co's.