The separate trial balance for Thanos SA and Merry SA, its 90 percent-owned subsidiary, for the...

  

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The separate trial balance for Thanos SA and Merry SA, its 90 percent-owned subsidiary, for the year ended 2014 is as follows: Debits Thanos SA Merry SA Cash S600 $700 1,000 Accounts receivable Interest receivable 400 25 1,100 1,900 1,100 Inventory Land Equipment-net Building-net Investment in Thanos SA bonds Investment in Mery SA Cost of sales Interest expense Other expenses Dividends 700 800 1,400 2,000 1,400 460 3,600 2,800 2,400 100 1.100 300 $15.700 700 100 $8.985 Total Credits $1.300 50 $1.000 Accounts payable Interest payable 10% bonds payable Common stock Retained Earnings Sales Gain on sale of land 1,000 5,000 3,380 2,000 2,085 3,700 200 4,800 Gain on sale of equipment Interest income 100 70 Total $15,700 $8.985 ADDITIONAL INFORMATION 1. Thanos SA acquired Merry SA when the book value of its net identifiable assets equaled the fair value. 2. Intercompany merchandise sale during 2014 by Thanos SA to Merry SA was $800,000 while unrealized profit of $ 100,000 remained in the ending inventory. 3. Thanos SA purchased land from Merry SA with book value of $800,000 for $1,000,000 in 2014. Thanos SA holds the land until 2015. 4. Merry SA purchased equipment from Thanos SA for $700,000 on December 31, 2014. The gain from selling this equipment was $100,000. 5. On January 1, 2014, Merry SA purchased half of Thanos SA's 10 percent outstanding bonds that were originally issued at par for $440,000. The bonds will mature on January 1, 2017. The bonds paid interest every January 1 and July 1. REQUIRED: Prepare consolidation workpapers for Thanos SA and subsidiary for the year ended December 31, 2014. The separate trial balance for Thanos SA and Merry SA, its 90 percent-owned subsidiary, for the year ended 2014 is as follows: Debits Thanos SA Merry SA Cash S600 $700 1,000 Accounts receivable Interest receivable 400 25 1,100 1,900 1,100 Inventory Land Equipment-net Building-net Investment in Thanos SA bonds Investment in Mery SA Cost of sales Interest expense Other expenses Dividends 700 800 1,400 2,000 1,400 460 3,600 2,800 2,400 100 1.100 300 $15.700 700 100 $8.985 Total Credits $1.300 50 $1.000 Accounts payable Interest payable 10% bonds payable Common stock Retained Earnings Sales Gain on sale of land 1,000 5,000 3,380 2,000 2,085 3,700 200 4,800 Gain on sale of equipment Interest income 100 70 Total $15,700 $8.985 ADDITIONAL INFORMATION 1. Thanos SA acquired Merry SA when the book value of its net identifiable assets equaled the fair value. 2. Intercompany merchandise sale during 2014 by Thanos SA to Merry SA was $800,000 while unrealized profit of $ 100,000 remained in the ending inventory. 3. Thanos SA purchased land from Merry SA with book value of $800,000 for $1,000,000 in 2014. Thanos SA holds the land until 2015. 4. Merry SA purchased equipment from Thanos SA for $700,000 on December 31, 2014. The gain from selling this equipment was $100,000. 5. On January 1, 2014, Merry SA purchased half of Thanos SA's 10 percent outstanding bonds that were originally issued at par for $440,000. The bonds will mature on January 1, 2017. The bonds paid interest every January 1 and July 1. REQUIRED: Prepare consolidation workpapers for Thanos SA and subsidiary for the year ended December 31, 2014.

Answer rating: 100% (QA)

Preliminary computations 90 of Merry SAs net income 720000 90 x 3700000 200000 2400000 Unrealized pr... View the full answer