On January 1, 2022, the Redder Company exchanged $1,500,000 cash for 100% of the outstanding voting...

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On January 1, 2022, the Redder Company exchanged $1,500,000 cash for 100% of the outstanding voting stock of the Lohman Company. On the acquisition date, Lohman Company had net equity consisting of the following: Common Stock $600,000 750,000 Retained Earnings Redder then prepared the following fair value allocations: Equipment, with a remaining life of 10 years was undervalued by $100,000. All other assets and liabilities are fairly reported. During 2022, Lohman Company reported earnings of $160,000 and paid cash dividends totaling $80,000. During 2023, Lohman earned $120,000 and paid dividends in the amount of $50,000. The financial statements for the two companies as of December 31, 2023 is presented on the worksheet, below. Required: complete the worksheet to consolidate the financial information of these twacompanies as of December 31, 2023 Income Statement Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity earnings in Lohman Net income Redder Company AND CONSOLIDATED SUBSIDIARY Consolidation Worksheet For Year Ending December 31, 2023 Smith (6,900,000) 3,700,000 900,000 400,000 60,000 (110,000) (1,950,000) Jones (720,000) 500,000 200,000 100,000 40,000 (120,000) Consolidation Entries Credit Debit Balances Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 Balance Sheet Cash Accounts receivable Inventories Investment in Lohman Equipment (net) Patents Unpatented technology Goodwill Total assets Current liabilities Long-term debt Common stock Retained earnings 12/31 Total liabilities and equity (5,000,000) (830,000) (1,950,000) (120,000) 550,000 50,000 (6,400,000) (900,000) 140,000 200,000 780,000 70,000 950,000 1,700,000 1,630,000 4,060,000 90,000 2,000,000 400,000 10,900,000 3,300,000 (500,000) (900,000) (1,000,000) (900,000) (3,000,000) (600,000) (6,400,000) (900,000) (10,900,000) (3,300,000) 1,730,000 450,000 X On January 1, 2022, the Redder Company exchanged $1,500,000 cash for 100% of the outstanding voting stock of the Lohman Company. On the acquisition date, Lohman Company had net equity consisting of the following: Common Stock $600,000 750,000 Retained Earnings Redder then prepared the following fair value allocations: Equipment, with a remaining life of 10 years was undervalued by $100,000. All other assets and liabilities are fairly reported. During 2022, Lohman Company reported earnings of $160,000 and paid cash dividends totaling $80,000. During 2023, Lohman earned $120,000 and paid dividends in the amount of $50,000. The financial statements for the two companies as of December 31, 2023 is presented on the worksheet, below. Required: complete the worksheet to consolidate the financial information of these twacompanies as of December 31, 2023 Income Statement Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity earnings in Lohman Net income Redder Company AND CONSOLIDATED SUBSIDIARY Consolidation Worksheet For Year Ending December 31, 2023 Smith (6,900,000) 3,700,000 900,000 400,000 60,000 (110,000) (1,950,000) Jones (720,000) 500,000 200,000 100,000 40,000 (120,000) Consolidation Entries Credit Debit Balances Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 Balance Sheet Cash Accounts receivable Inventories Investment in Lohman Equipment (net) Patents Unpatented technology Goodwill Total assets Current liabilities Long-term debt Common stock Retained earnings 12/31 Total liabilities and equity (5,000,000) (830,000) (1,950,000) (120,000) 550,000 50,000 (6,400,000) (900,000) 140,000 200,000 780,000 70,000 950,000 1,700,000 1,630,000 4,060,000 90,000 2,000,000 400,000 10,900,000 3,300,000 (500,000) (900,000) (1,000,000) (900,000) (3,000,000) (600,000) (6,400,000) (900,000) (10,900,000) (3,300,000) 1,730,000 450,000 X

Answer rating: 100% (QA)

Answer Income Statement Smith Janes Debit Credit Balances Revenues 6900000 720000 7620000 Cost of go... View the full answer