Parent Inc. acquired all of Sub Co.'s common stock on 1/1/2023 by paying $1,263,000 cash. Sub's...
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Parent Inc. acquired all of Sub Co.'s common stock on 1/1/2023 by paying $1,263,000 cash. Sub's trial balance as of 1/1/2023: Credit Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (20- year life) Cash and short term investments Common stock Equipment (net) (8- year life) Debit 105,000 303,000 145,500 468,000 117,000 607,500 127,500 Cash and short term investments Common stock Equipment (net) (8- year life) Intangible assets (indefinite life) Land Long-term liabilities (mature 12/31/25) Retained earnings, 1/1/23 Supplies Totals 145.500 468,000 2023 214,500 187,500 Additional information: 127,500 42,000 1,465,500 1,465,500 351,000 262,500 2024 ents earnings, 1/1/23 Supplies Totals Additional information: Sub Co. Net Income Sub Co. Dividends 42,000 1.465,500 1,465,500 262,500 2023 2024 147,000 198,000 18,000 54,000 This acquisition resulted in excess amortization, broken down as follows: Excess Annual Fair Value Amortization Land $60,000 Buildings $91.500 Equipment $(15,000) Patent $129,000 Total $265,500 $0 $4.575 $(1,875) $12.900 $15,600 Parent is using the equity method for this investment. Record the consolidation entries for 2024, the year after the initial acquisition. Prepare consolidation entry S. **** DR DR DR Parent is using the equity method for this investment. Record the consolidation entries for 2024, the y initial acquisition. Prepare consolidation entry S. DR DR DR Equipment $(15,000) Patent $129.000 Total $265,500 Prepare consolidation entry A. CR $(1,875) $12.900 $15,600 CR tA $ $ LA GA SA $ $ SA tA $ DR DR Prepare consolidation entry A. DR DR DR DR Prepare consolidation entry I. CR CR CR Prepare consolidation entry D. CR SA s 59 $ +A LA $ IA +A Prepare consolidation entry E (combine amortization and depreciation into one account labeled ' Expenses"). H $ LA DR DR DR Prepare consolidation entry D. DR Prepare consolidation entry E (combine amortization and depreciation into one account labeled "e Expenses"). CR CR CR CR S Preapre consolidation entry P if Parent owed Sub 39,000 at the end of 2024. $ +A $ Parent Inc. acquired all of Sub Co.'s common stock on 1/1/2023 by paying $1,263,000 cash. Sub's trial balance as of 1/1/2023: Credit Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (20- year life) Cash and short term investments Common stock Equipment (net) (8- year life) Debit 105,000 303,000 145,500 468,000 117,000 607,500 127,500 Cash and short term investments Common stock Equipment (net) (8- year life) Intangible assets (indefinite life) Land Long-term liabilities (mature 12/31/25) Retained earnings, 1/1/23 Supplies Totals 145.500 468,000 2023 214,500 187,500 Additional information: 127,500 42,000 1,465,500 1,465,500 351,000 262,500 2024 ents earnings, 1/1/23 Supplies Totals Additional information: Sub Co. Net Income Sub Co. Dividends 42,000 1.465,500 1,465,500 262,500 2023 2024 147,000 198,000 18,000 54,000 This acquisition resulted in excess amortization, broken down as follows: Excess Annual Fair Value Amortization Land $60,000 Buildings $91.500 Equipment $(15,000) Patent $129,000 Total $265,500 $0 $4.575 $(1,875) $12.900 $15,600 Parent is using the equity method for this investment. Record the consolidation entries for 2024, the year after the initial acquisition. Prepare consolidation entry S. **** DR DR DR Parent is using the equity method for this investment. Record the consolidation entries for 2024, the y initial acquisition. Prepare consolidation entry S. DR DR DR Equipment $(15,000) Patent $129.000 Total $265,500 Prepare consolidation entry A. CR $(1,875) $12.900 $15,600 CR tA $ $ LA GA SA $ $ SA tA $ DR DR Prepare consolidation entry A. DR DR DR DR Prepare consolidation entry I. CR CR CR Prepare consolidation entry D. CR SA s 59 $ +A LA $ IA +A Prepare consolidation entry E (combine amortization and depreciation into one account labeled ' Expenses"). H $ LA DR DR DR Prepare consolidation entry D. DR Prepare consolidation entry E (combine amortization and depreciation into one account labeled "e Expenses"). CR CR CR CR S Preapre consolidation entry P if Parent owed Sub 39,000 at the end of 2024. $ +A $
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Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
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