Take Home Assignment $3("$THA $3")-$

Trial Balance Reporting, Consolidating Worksheets

& Consolidated Financial Statements

Fall $2024$

Design & Objectives

THA $3$ is designed to reinforce the consolidation process and the preparation of consolidated financial statements using trial balances that are common starting point in practice.BackgroundA schedule of intercompany transactions and balances are listed below.

Project Assignments

Assignment $1-$ Prepare and Complete Consolidating Worksheet

$1\mathrm{.}1$ Prepare the parent company $($Exmore Coffee$)$ journal entry required to recognize the subsidiary earnings $($Belle Haven Coffee$).$ Trial balance schedules of Exmore Coffee and Belle Haven Coffee are listed below$\mathrm{.}1-$

Assignment $2-$ Prepare a Consolidated Earnings Statement and Balance Sheet

$2\mathrm{.}1$ Using the consolidating worksheet results of Assignment $1\mathrm{.}2,$ prepare a consolidated earnings statement and balance sheet. The format of the financial statements should follow the format in the Trial Balance Reporting Handout $($Handout TBR$),$ including headings, account groupings $($including spelling$),$ subtotals and totals.

Schedules $-3$ Months Ending $3/31$

$$ Exmore Coffee Co Trial BalanceTHA Grading Composition and Potential DeductionsIncluded on page $3.$

Project Turn$-$In Checklist

$($Please assemble in the following order$)$

Journal entry from Assignment $1\mathrm{.}1$

Consolidating Worksheets for Earnings Statement and Balance Sheet

Consolidated Earnings Statement

Consolidated Balance Sheet

$2-$

BAC$401$ THA$324$W $09/23/245$:$08$ PM

Trial Balance of Exmore Coffee Co$.$

$3$ Months Ending $3/31$

$\backslash$table$[[$Accounts$,$Debit,Credit$],[$Delmarva Bank checking account,$15,500,],[$Delmarva Bank money market account,$68,600,],[$Accounts Receivable,$106,500,],[$Allowance for uncollectible accounts,$87,200,2,130],[$Inventory$,208,500,],[$Land$,165,500,],[$Building$,145,000,],[$Equipment$,19,400,],[$Construction in progress,,$47,750],[$Accumulated Depreciation,$90,000,47,750],[$Advance receivable $-$ Belle Haven Coffee Investment $-$ Belle Haven Coffee $[$beginning balance as of $1/,64,868,],[$Accounts payable,,$85,500],[$crued payroll and benef,,$27,000],[$Accrued payables $-$ other,,$22,500],[$Revolving credit loans $($committed for $3$ years$),,71,584],[$Note Payable $($due in $5$ years$),,150,000],[$Deferred tax liability $($long term$),,14,200],[$Common stock $1,000$ shares, par $$1\mathrm{.}00,,1,000],[$Additional paid in capital,,$249,000],[$Retained earnings$($loss$)[$beginning balance as of $1/1],,225,862]]$

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$401$ THA$3249/23/20245$:$08$ PM

Exmor

Trial Balance of Exmore Coffee Co$.$

$3$ Months Ending $3/31$

Accounts

Sales $-$ coffee retail

$\backslash$table$[[$Debit$,$Credit$],[,260,000],[158,000,],[32,400,]]$

Sales $-$ roasted beans

$5,200$

Sales $-$ food

Allowance for returns $-$ beans

Allowance for returns $-$ roasted beans

Cost of goods sold $-$ coffee

$4,250$

Cost of goods sold $-$ beans

$131,500$

$71,100$

Cost $of$ goods sold $-$ other $17,640$

Selling expenses $24,600$

$\backslash$table$[[$Professional fees,$12,200]]$

Depreciation $-$ Buildings

Depreciation $-$ Equipment

Bad debt expense

Administrative salaries

Other SG&A expenses

$5,517$

$14,500$

Interest income $-$ money market

Interest expense $-$ note payable

$14,500$

$425$

$36,500$

$9,396$

$48$

Interest expense $-$ revolving credit

Equity earnings$-$Belle Haven Coffee $[1/1-3/31$ to be determined$]$

Income tax provision

$12,000$

$4,888$

Total

Trial Balance of Belle Haven Coffee Co$.$

$3$ Months Ending $3/31$

$\backslash$table$[[$Months Ending $\frac{3}{31},$Debit,Credit$],[3$ Months Ending,$7,500,],[$Accounts$,24,200,],[$Silver Beach Bank checichey market account,$2,200,],[$Silver Beach Bank money,,$],[$Accounts Receivable accounts,$45,100,],[$Allowance for uncolle Coffee Beans,$50,000,],[$Inventory $-$ Ro$,57,600,],[$Land$,40,100,],[$Building$,2,500,],[$Equipment in progress,,$21,150],[$Construction in progress,$22,000,],[$Accumulated Depreciation,$22,000,5,600],[$Goodwill$,,12,400],[$Accounts payable,,$7,400],[$Accrued payroll and benefits,,$14,800],[$Accrued payables $-$ other,,$90,000],[$Deferred tax liability $($long$,,10,000],[$Advance payable $-$ Exmore shares, par $$1\mathrm{.}00,,40,000],[$Common paid in capital,,$14,868],[$Additional paidings$($loss$)[$beginning balance as of $1/1],,]]$

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Belle Ha

A$01$ THA$3249/23/20245$:$08$ PM

Trial Balance of Belle Haven Coffee Co$.$

$3$ Months Ending $3/31$

$\backslash$table$[[,$Debit,Credit$],[$Accounts$,120,200],[$Sales $-$ coffee retail,,$15,100],[$Sales $-$ food,$48,080,],[$Cost of goods sold $-$ coffee,$7,550,],[$Cost of goods sold $-$ food,$8,200,],[$Selling expenses,$2,400,],[$Professional fees,$1,920,],[$Depreciation $-$ Buildings,$4,010,],[$Depreciation $-$ Equipment,$-,],[$Bad debt expense,$12,400,],[$Administrative salaries,$3,515,],[$Other SG&A expenses,,$48],[$Interest income $-$ money market,$12,291,],[$Income tax provision,$351,566,351,566],[$Total$,,-]]$

Intercompany Transactions & Balances

Intercompany Sales

Exmore Coffee Co sales of roasted coffee beans to Belle Haven Coffee Co

$>3$ months ended $\frac{3}{31}$

$ $78,000$

Intercompany Inventor