Spreadsheet Assignment #2Worth 20 points; ACCT 5175/6075, Spring 2021

It is based on Chapter 5, so NCI is involved and a Differential is involved. Key pages are 190 through 193. Part 3 should have the same general format style as Figure 5-2 in text.

On January 1, 2021, Penguin Corporation bought 80% of the stock of Sea Gull Corporation for $700,000.The Balance Sheets of the two companies immediately after the acquisition (January 1, 2019) of Sea Gull Corp. showed the following amounts:

PenguinSea Gull

Cash$130,000$ 100,000

Accounts Receivable 120,00030,000

Inventory400,00010,000

Land500,000100,000

Buildings & Equipment - Net 1,000,000420,000

Trademarks040,000

Investment in Sea Gull700,0000

Total Assets2,850,000700,000

Accounts Payable$420,00080,000

Long-Term Liabilities 1,080,00020,000

Common Stock 1,000,000400,000

Additional Paid in Capital-50,000

Retained Earnings350,000150,000

Total Liabilities and

Stockholders' Equity$2,850,000700,000

On the date of acquisition, the Book Value of Sea Gull equaled its Fair Market Value (FMV), except for land that had a FMV of $140,000 and the trademarks that had a FMV of $60,000. On the date of acquisition the FMV of previously unrecorded identifiable intangibles (2-year life) of Sea Gull was $40,000, and the NonControlling Interest's fair value is $175,000. Penguin uses the equity method to record its investment in Sea Gull.

Required:

1. List all journal entries that Penguin made to record its investment in Sea gull on the date of acquisition.

2.List all Elimination Entries that would need to be made in order to prepare a workpaper for the consolidated Balance Sheet of Penguin and Sea gull immediately after the combination (January 1, 2019).

3.Prepare working paper for the consolidated Balance Sheet of Penguin and Seagull immediately after the combination (January 1, 2021).Show all necessary elimination entries in their proper columns.Use a letter coding system for each elimination entry.Use Figure 5-2 in text for general format, and syllabus for additional formal requirements. Remember to do the format requirements in the syllabus, such as Dates, Company name (i.e. parent identified), Name of statement, Dollar Signs, Commas, and Underlines.

CHECK FIGURE: Consolidated Assets = $3,125,000