This tab contains details needed for the project. Formulas are highlighted in gray. When completing the...

Transcribed Image Text:

This tab contains details needed for the project. Formulas are highlighted in gray. When completing the different parts, link all cells. No cells should be hard coded. Do not fill in or change anything on this tab. All work will be completed on subsequent tabs. PROJECT FACTS Ownership (no dissolution) Acquisition Date Consideration (paid in cash) Fair value of NCI 80% Stony Harbor Balance Sheet 1/1/2023 Assets 1/1/2023 Cash $ 396,000 Accounts Receivable $ 99,000 Inventory Land Equipment (net) STONY HARBOR FAIR VALUES AT ACQUISITION Software (net) Equipment (5 year remaining useful life) $ 105,000 Total Assets Software (3 year remaining useful life) $ 28,000 Customer list (10 year useful life - currently unrecognized) $ 45,000 Liabilities INTRAENTITY TRANSACTIONS Prairie View sold Land to Stony Harbor on 1/2/2024. They still hold the land at the end of 2024. Common Stock Sale Price $ 38,000 Additional Paid-in Capital Book Value $ 30,000 Retained Earnings Total Liabilities and Equity 41,700 95,600 185,200 46,000 85,000 25,000 478,500 Liabilities and Equity 102,500 20,000 205,000 151,000 478,500 Stony Harbor sold inventory to Prairie View in 2024. Sales price $ 66,000 STONY HARBOR'S RETAINED EARNINGS CHANGES Cost $ 52,000 2023 Income $ 45,000 Gross Profit % 21% 2023 Dividends $ 12,000 % Remaining at yearend 25% 2024 Income $ 43,000 2024 Dividends $ 16,000 Prairie View owes Stony Harbor at the end of 2024 $ 20,000 Acquisition Journal Entry DR CR Investment in Stony Harbor Cash $ 396,000.00 $ 396,000.00 Fair-Value Allocation Schedule Total Fair Value Book Value Excess Initial Value $ 495,000.00 $ (376,000.00) Useful Life $ 119,000.00 to Equipment to Software to Customer List to Goodwill Goodwill Allocation Schedule $ $ $ $ 20,000.00 $ 3,000.00 $ 45,000.00 $ 51,000.00 Amortization 5 $ 4,000.00 3 $ 1,000.00 10 $ 4,500.00 CI NCI Total 396,000.00 $ 99,000.00 $495,000.00 355,200.00 $ 88,800.00 $444,000.00 40,800.00 $ 10,200.00 $51,000.00 $ 9,500.00 Initial investment, 1/1/23 Dividends Income of Stony Harbor Amortization Investment in Stony Harbor 12/31/23 Dividends Income of Stony Harbor Amortization Deferred profit Deferred gain on sale of land Investment in Stony Harbor 12/31/24 $ 396,000.00 $ (9,600.00) $ 36,000.00 $ (7,600.00) $ 414,800.00 $ (12,800.00) $ 34,400.00 $ (7,600.00) $ (2,800.00) $ (8,000.00) $ 418,000.00 Complete the consolidation worksheet below. Start by filling in the yellow squares for Prairie View's trial balance. Use formulas whenever possible (calculating values or totaling rows/columns). Make sure your debits and credits are being added/subtracted correctly. All consolidation entry values need to be linked to the trial balance or other tabs. If any additional schedules are needed, place them below the consolidation worksheet. Equity Method Consolidated Worksheet - For the Year Ended 12/31/2024 Accounts Trial Balance Prairie View Stony Harbor (JE ref) Consolidation Entries Debit || (JE ref) | Credit Noncontrolling Consolidated Interest Totals Revenues and Gains Cost of Goods Sold Operating Expenses 850,000 750,000 680,000 602,000 145,000 105,000 Income of Stony Harbor Net Income 25,000 43,000 Net Income attributable to NCI Net Income attributable to Prairie View Retained Earnings - Prairie View 1/1 1,074,605 Retained Earnings - Stony Harbor 1/1 184,000 Net Income (above) 25,000 43,000 Dividends Declared 95,000 16,000 Retained Earnings 12/31 1,004,605 211,000 Cash 156,000 115,490 Accounts Receivable 305,000 93,250 Inventory 595,000 160,750 Investment in Stony Harbor Land Equipment (net) Software (net) Customer List Goodwill 125,000 84,000 463,580 51,000 59,375 19,000 Total Assets 1,703,955 523,490 Liabilities 451,350 87,490 Common Stock 50,000 20,000 Additional Paid-in Capital 600,000 205,000 Noncontrolling Interest in Stony Harbor, 1/1 Noncontrolling Interest in Stony Harbor, 12/31 Retained Earnings (above) 1,004,605 211,000 Total Liabilities and Equity 2,105,955 523,490 (402,000) This tab contains details needed for the project. Formulas are highlighted in gray. When completing the different parts, link all cells. No cells should be hard coded. Do not fill in or change anything on this tab. All work will be completed on subsequent tabs. PROJECT FACTS Ownership (no dissolution) Acquisition Date Consideration (paid in cash) Fair value of NCI 80% Stony Harbor Balance Sheet 1/1/2023 Assets 1/1/2023 Cash $ 396,000 Accounts Receivable $ 99,000 Inventory Land Equipment (net) STONY HARBOR FAIR VALUES AT ACQUISITION Software (net) Equipment (5 year remaining useful life) $ 105,000 Total Assets Software (3 year remaining useful life) $ 28,000 Customer list (10 year useful life - currently unrecognized) $ 45,000 Liabilities INTRAENTITY TRANSACTIONS Prairie View sold Land to Stony Harbor on 1/2/2024. They still hold the land at the end of 2024. Common Stock Sale Price $ 38,000 Additional Paid-in Capital Book Value $ 30,000 Retained Earnings Total Liabilities and Equity 41,700 95,600 185,200 46,000 85,000 25,000 478,500 Liabilities and Equity 102,500 20,000 205,000 151,000 478,500 Stony Harbor sold inventory to Prairie View in 2024. Sales price $ 66,000 STONY HARBOR'S RETAINED EARNINGS CHANGES Cost $ 52,000 2023 Income $ 45,000 Gross Profit % 21% 2023 Dividends $ 12,000 % Remaining at yearend 25% 2024 Income $ 43,000 2024 Dividends $ 16,000 Prairie View owes Stony Harbor at the end of 2024 $ 20,000 Acquisition Journal Entry DR CR Investment in Stony Harbor Cash $ 396,000.00 $ 396,000.00 Fair-Value Allocation Schedule Total Fair Value Book Value Excess Initial Value $ 495,000.00 $ (376,000.00) Useful Life $ 119,000.00 to Equipment to Software to Customer List to Goodwill Goodwill Allocation Schedule $ $ $ $ 20,000.00 $ 3,000.00 $ 45,000.00 $ 51,000.00 Amortization 5 $ 4,000.00 3 $ 1,000.00 10 $ 4,500.00 CI NCI Total 396,000.00 $ 99,000.00 $495,000.00 355,200.00 $ 88,800.00 $444,000.00 40,800.00 $ 10,200.00 $51,000.00 $ 9,500.00 Initial investment, 1/1/23 Dividends Income of Stony Harbor Amortization Investment in Stony Harbor 12/31/23 Dividends Income of Stony Harbor Amortization Deferred profit Deferred gain on sale of land Investment in Stony Harbor 12/31/24 $ 396,000.00 $ (9,600.00) $ 36,000.00 $ (7,600.00) $ 414,800.00 $ (12,800.00) $ 34,400.00 $ (7,600.00) $ (2,800.00) $ (8,000.00) $ 418,000.00 Complete the consolidation worksheet below. Start by filling in the yellow squares for Prairie View's trial balance. Use formulas whenever possible (calculating values or totaling rows/columns). Make sure your debits and credits are being added/subtracted correctly. All consolidation entry values need to be linked to the trial balance or other tabs. If any additional schedules are needed, place them below the consolidation worksheet. Equity Method Consolidated Worksheet - For the Year Ended 12/31/2024 Accounts Trial Balance Prairie View Stony Harbor (JE ref) Consolidation Entries Debit || (JE ref) | Credit Noncontrolling Consolidated Interest Totals Revenues and Gains Cost of Goods Sold Operating Expenses 850,000 750,000 680,000 602,000 145,000 105,000 Income of Stony Harbor Net Income 25,000 43,000 Net Income attributable to NCI Net Income attributable to Prairie View Retained Earnings - Prairie View 1/1 1,074,605 Retained Earnings - Stony Harbor 1/1 184,000 Net Income (above) 25,000 43,000 Dividends Declared 95,000 16,000 Retained Earnings 12/31 1,004,605 211,000 Cash 156,000 115,490 Accounts Receivable 305,000 93,250 Inventory 595,000 160,750 Investment in Stony Harbor Land Equipment (net) Software (net) Customer List Goodwill 125,000 84,000 463,580 51,000 59,375 19,000 Total Assets 1,703,955 523,490 Liabilities 451,350 87,490 Common Stock 50,000 20,000 Additional Paid-in Capital 600,000 205,000 Noncontrolling Interest in Stony Harbor, 1/1 Noncontrolling Interest in Stony Harbor, 12/31 Retained Earnings (above) 1,004,605 211,000 Total Liabilities and Equity 2,105,955 523,490 (402,000)

Answer rating: 100% (QA)

Detailed Explanation To proceed with calculations you would generally follow these steps Prepare Acquisition Journal Entries Record the acquisition of Stony Harbor by debiting Investment in Stony Harb... View the full answer