Jenna OYJ was a 90 percent-owned subsidiary of Mikko OYJ, which was acquired in 2012. At...

  

Transcribed Image Text:

Jenna OYJ was a 90 percent-owned subsidiary of Mikko OYJ, which was acquired in 2012. At the ac- quisition date, any fair value/book value differences are due to goodwill. The separate trial balance for both companies for the year ended in 2014 is as follows: Debits Jenna OYJ Mikko OYJ 800 Cash Accounts receivable Inventory Land Equipment-net Building-net Investment in Jenna OYJ Cost of sales Other expenses Dividends S 1,000 $ 1.200 $ 1,400 S 600 $ 1,900 $ 3.000 $ 2,790 S 5,000 S 1.000 500 400 800 300 $ 1.400 $2,000 %24 $ 3,500 800 $ 200 S 10,200 Total S 18,390 Credits Accounts payable Common stock Retained Eamings Sales Gain on sale of equipment Gain on sale of building $ 1,300 $ 6,000 $3,290 $ 7,300 S 1,000 $ 2,000 $ 1,000 $ 6,000 200 %24 500 Total 5 18.390 2410,200 ADDITIONAL INFORMATION 1. In 2013, Jenna OYI sold $900.000 of inventories to Mikko OYJ with $200,000 unrealized profit included in the ending inventories. 2 On January 1, 2014, Jenna OYJ sold Equipment with book value of $1,000,000 to Mikko OYJ for $1,200,000. The equipment had remaining useful life of 4 years, Mikko OYJ depreciated the equipment using straight-line method. 3. On December 31, 2014, Jenna OYJ acquired Building from Mikko OYJ for $2,000,000. At that date, the building has book value of $1,500,000 and remaining useful life of 20 years. Jenna OYJ depreciated the building using straight-line method. REQUIRED: Prepare the consolidation workpapers for Mikko OYJ and subsidiary for the year ended December 31, 2014. Jenna OYJ was a 90 percent-owned subsidiary of Mikko OYJ, which was acquired in 2012. At the ac- quisition date, any fair value/book value differences are due to goodwill. The separate trial balance for both companies for the year ended in 2014 is as follows: Debits Jenna OYJ Mikko OYJ 800 Cash Accounts receivable Inventory Land Equipment-net Building-net Investment in Jenna OYJ Cost of sales Other expenses Dividends S 1,000 $ 1.200 $ 1,400 S 600 $ 1,900 $ 3.000 $ 2,790 S 5,000 S 1.000 500 400 800 300 $ 1.400 $2,000 %24 $ 3,500 800 $ 200 S 10,200 Total S 18,390 Credits Accounts payable Common stock Retained Eamings Sales Gain on sale of equipment Gain on sale of building $ 1,300 $ 6,000 $3,290 $ 7,300 S 1,000 $ 2,000 $ 1,000 $ 6,000 200 %24 500 Total 5 18.390 2410,200 ADDITIONAL INFORMATION 1. In 2013, Jenna OYI sold $900.000 of inventories to Mikko OYJ with $200,000 unrealized profit included in the ending inventories. 2 On January 1, 2014, Jenna OYJ sold Equipment with book value of $1,000,000 to Mikko OYJ for $1,200,000. The equipment had remaining useful life of 4 years, Mikko OYJ depreciated the equipment using straight-line method. 3. On December 31, 2014, Jenna OYJ acquired Building from Mikko OYJ for $2,000,000. At that date, the building has book value of $1,500,000 and remaining useful life of 20 years. Jenna OYJ depreciated the building using straight-line method. REQUIRED: Prepare the consolidation workpapers for Mikko OYJ and subsidiary for the year ended December 31, 2014.

Answer rating: 100% (QA)

1 Intercompany Inventory profit defferal Year 2013 Upstream Cost to Mikko OYJ Mark up 900000 200000 ... View the full answer