The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...
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The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.90 per share on January 1, 2017. The remaining 20 percent of Devine's shares also traded actively at $6.90 per share before and after Holtz's acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine's underlying accounts except that a building with a 5-year future life was undervalued by $52,500 and a fully amortized trademark with an estimated 10-year remaining life had a $71,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $249,500. Following are the separate financial statements for the year ending December 31, 2018: Holtz Devine, Inc. Sales $ Corporation (837,000) 292,000 $ (394,500) Cost of goods sold Operating expenses Dividend income 324,000 (16,000) 154,000 79,500 8 Net income $ (237,000) $ (161,000) $ Retained earnings, 1/1/18 Net income (above) (767,800) (237,000) 80,000 $ (319,500) (161,000) 20,000 Dividends declared Retained earnings, 12/31/18 $ (924,000) $ (460,500) Current assets $ $ 253,500 Investment in Devine, Inc Buildings and equipment (net) Trademarks 323,500 552,000 857,500 151,000 8 408,000 195,000 $856,500 Total assets $ 1,884,000 $ (640,000) Liabilities $ (296,000) Common stock (320,000) (924,000) (100,000) (460,500) Retained earnings, 12/31/18 (above) Total liabilities and equities $ (1,884,000) $ (856,500) At year-end, there were no intra-entity receivables or payables. a. Prepare a worksheet to consolidate these two companies as of December 31, 2018. b. Prepare a 2018 consolidated income statement for Holtz and Devine. c. If instead the noncontrolling interest shares of Devine had traded for $4.73 surrounding Holtz's acquisition date, what is the impact on goodwill? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required A Required B Required C Prepare a worksheet to consolidate these two companies as of December 31, 2018. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign.) Show less A HOLTZ CORPORATION AND DEVINE, INC. Consolidation Worksheet For Year Ending December 31, 2018 Accounts Holtz Corporation Devine Inc. Consolidation Entries Credit Debit Noncontrolling Consolidated Totals Interest Sales $ (837,000) Cost of goods sold S (394,500) 154,000 79,500 292,000 Operating expenses 324,000 Dividend income (16,000) 0 S Separate company net income $ (237,000) (161,000) Consolidated net income S 0 NI attributable to noncontrolling interest NI attributable to Holtz Corp. 0 Retained earnings, 1/1 $ (767,000) S (319,500) Net income (161,000) (237,000) 80,000 Dividends declared 20,000 $ (924,000) S (460,500) 0 S 323,500 $ 253,500 552,000 0 857,500 408.000 151,000 195,000 0 0 $ 1,884,000 $ 850,500 0 $ (640,000) S (296,000) (320,000) (100,000) (924,000) (460,500) S $ (1,884,000) (856,500) 0 <Required A Retained earnings, 12/31 Current assets Investment in Devine Buildings and equipment (net) Trademarks Goodwill Total assets Liabilities Common stock Retained earnings, 12/31 NCI in Devine, 1/1 NCI in Devine, 12/31 Total liabilities and equities $ 0 S 0 Required B > 0 S S S S D At year-end, there were no intra-entity receivables or payables. a. Prepare a worksheet to consolidate these two companies as of December 31, 2018. b. Prepare a 2018 consolidated income statement for Holtz and Devine. c. If instead the noncontrolling interest shares of Devine had traded for $4.73 surrounding Holtz's acquisition date, what is the impact on goodwill? Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare a 2018 consolidated income statement for Holtz and Devine. (Enter all amounts as positive values.) HOLTZ CORPORATION AND DEVINE, INC. Consolidated Income Statement For Year Ending December 31, 2018 Total expenses 0 S 0 S 0 < Required A Required C > To noncontrolling interest To Holtz Corporation Following are the separate financial statements for the year ending December 31, 2018: Devine, Inc. Sales $ (394,500) Cost of goods sold Operating expenses Dividend income Holtz Corporation $ (837,000) 292,000 324,000 (16,000) (237,000) 154,000 79,500 8 Net income $ $ (161,000) $ Retained earnings, 1/1/18 Net income (above) Dividends declared (767,000) (237,000) 80,000 (924,000) $ (319,500) (161,000) 20,000 Retained earnings, 12/31/18 $ $ (460,500) Current assets $ $ 253,500 Investment in Devine, Inc. Buildings and equipment (net) 323,500 552,000 857,500 151,000 8 408,000 195,000 Trademarks Total assets $ 1,884,000 $ 856,500 Liabilities $ (640,000) $ (296,000) Common stock Retained earnings, 12/31/18 (above) (320,000) (924,000) (100,000) (460,500) Total liabilities and equities $ (1,884,000) $ (856,500) At year-end, there were no intra-entity receivables or payables. a. Prepare a worksheet to consolidate these two companies as of December 31, 2018. b. Prepare a 2018 consolidated income statement for Holtz and Devine. c. If instead the noncontrolling interest shares of Devine had traded for $4.73 surrounding Holtz's acquisition date, what is the impact on goodwill? Complete this question by entering your answers in the tabs below. Required A Required B Required C If instead the noncontrolling interest shares of Devine had traded for $4.73 surrounding Holtz's acquisition date, what is the impact on goodwill? Goodwill to < Required B Required C > The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.90 per share on January 1, 2017. The remaining 20 percent of Devine's shares also traded actively at $6.90 per share before and after Holtz's acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine's underlying accounts except that a building with a 5-year future life was undervalued by $52,500 and a fully amortized trademark with an estimated 10-year remaining life had a $71,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $249,500. Following are the separate financial statements for the year ending December 31, 2018: Holtz Devine, Inc. Sales $ Corporation (837,000) 292,000 $ (394,500) Cost of goods sold Operating expenses Dividend income 324,000 (16,000) 154,000 79,500 8 Net income $ (237,000) $ (161,000) $ Retained earnings, 1/1/18 Net income (above) (767,800) (237,000) 80,000 $ (319,500) (161,000) 20,000 Dividends declared Retained earnings, 12/31/18 $ (924,000) $ (460,500) Current assets $ $ 253,500 Investment in Devine, Inc Buildings and equipment (net) Trademarks 323,500 552,000 857,500 151,000 8 408,000 195,000 $856,500 Total assets $ 1,884,000 $ (640,000) Liabilities $ (296,000) Common stock (320,000) (924,000) (100,000) (460,500) Retained earnings, 12/31/18 (above) Total liabilities and equities $ (1,884,000) $ (856,500) At year-end, there were no intra-entity receivables or payables. a. Prepare a worksheet to consolidate these two companies as of December 31, 2018. b. Prepare a 2018 consolidated income statement for Holtz and Devine. c. If instead the noncontrolling interest shares of Devine had traded for $4.73 surrounding Holtz's acquisition date, what is the impact on goodwill? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required A Required B Required C Prepare a worksheet to consolidate these two companies as of December 31, 2018. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign.) Show less A HOLTZ CORPORATION AND DEVINE, INC. Consolidation Worksheet For Year Ending December 31, 2018 Accounts Holtz Corporation Devine Inc. Consolidation Entries Credit Debit Noncontrolling Consolidated Totals Interest Sales $ (837,000) Cost of goods sold S (394,500) 154,000 79,500 292,000 Operating expenses 324,000 Dividend income (16,000) 0 S Separate company net income $ (237,000) (161,000) Consolidated net income S 0 NI attributable to noncontrolling interest NI attributable to Holtz Corp. 0 Retained earnings, 1/1 $ (767,000) S (319,500) Net income (161,000) (237,000) 80,000 Dividends declared 20,000 $ (924,000) S (460,500) 0 S 323,500 $ 253,500 552,000 0 857,500 408.000 151,000 195,000 0 0 $ 1,884,000 $ 850,500 0 $ (640,000) S (296,000) (320,000) (100,000) (924,000) (460,500) S $ (1,884,000) (856,500) 0 <Required A Retained earnings, 12/31 Current assets Investment in Devine Buildings and equipment (net) Trademarks Goodwill Total assets Liabilities Common stock Retained earnings, 12/31 NCI in Devine, 1/1 NCI in Devine, 12/31 Total liabilities and equities $ 0 S 0 Required B > 0 S S S S D At year-end, there were no intra-entity receivables or payables. a. Prepare a worksheet to consolidate these two companies as of December 31, 2018. b. Prepare a 2018 consolidated income statement for Holtz and Devine. c. If instead the noncontrolling interest shares of Devine had traded for $4.73 surrounding Holtz's acquisition date, what is the impact on goodwill? Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare a 2018 consolidated income statement for Holtz and Devine. (Enter all amounts as positive values.) HOLTZ CORPORATION AND DEVINE, INC. Consolidated Income Statement For Year Ending December 31, 2018 Total expenses 0 S 0 S 0 < Required A Required C > To noncontrolling interest To Holtz Corporation Following are the separate financial statements for the year ending December 31, 2018: Devine, Inc. Sales $ (394,500) Cost of goods sold Operating expenses Dividend income Holtz Corporation $ (837,000) 292,000 324,000 (16,000) (237,000) 154,000 79,500 8 Net income $ $ (161,000) $ Retained earnings, 1/1/18 Net income (above) Dividends declared (767,000) (237,000) 80,000 (924,000) $ (319,500) (161,000) 20,000 Retained earnings, 12/31/18 $ $ (460,500) Current assets $ $ 253,500 Investment in Devine, Inc. Buildings and equipment (net) 323,500 552,000 857,500 151,000 8 408,000 195,000 Trademarks Total assets $ 1,884,000 $ 856,500 Liabilities $ (640,000) $ (296,000) Common stock Retained earnings, 12/31/18 (above) (320,000) (924,000) (100,000) (460,500) Total liabilities and equities $ (1,884,000) $ (856,500) At year-end, there were no intra-entity receivables or payables. a. Prepare a worksheet to consolidate these two companies as of December 31, 2018. b. Prepare a 2018 consolidated income statement for Holtz and Devine. c. If instead the noncontrolling interest shares of Devine had traded for $4.73 surrounding Holtz's acquisition date, what is the impact on goodwill? Complete this question by entering your answers in the tabs below. Required A Required B Required C If instead the noncontrolling interest shares of Devine had traded for $4.73 surrounding Holtz's acquisition date, what is the impact on goodwill? Goodwill to < Required B Required C >
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Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
Posted Date:
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