Using the data from problem 3-24, complete the following steps:

  1. Prepare a schedule to determine goodwill and to allocate fair value

   2. Prepare a schedule to determine the balance in the Investment general ledger account for each of the three Investment alternative accounting methods (Initial Value, Partial Equity and Equity). Include ana analysis of the related income account also. This is the analysis I did in the video to determine entry C

  3. Prepare a Consolidating worksheet for each Investment accounting method (Initial Value, Partial Equity and Equity)

  4. for each accounting method, prepare a comparative analysis of Consolidated Net Earnings, Ending Retained Earnings, Total Assets. What observation can you conclude from your analysis?

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24. Foxx Corporation acquired all of Greenburg Company's outstanding stock on January 1, 2019, for $600,000 cash. Greenburg's accounting records showed net assets on that date of $470,000, although equipment with a 10-year remaining life was undervalued on the records by $90,000. Any recognized goodwill is considered to have an indefinite life. Greenburg reports net income in 2019 of $90,000 and $100,000 in 2020. The subsidiary declared dividends of $20,000 in each of these two years. Account balances for the year ending December 31, 2021, follow. Credit balances are indicated by parentheses. page 138 Revenues.. Cost of goods sold. Depreciation expense. Investment income.. Net income Retained earnings, 1/1/21 Net income... Dividends declared. Retained earnings, 12/31/21 Current assets. Investment in subsidiary Equipment (net). Buildings (net) Land Total assets Liabilities. Common stock. Retained earnings. Total liabilities and equity Foxx Greenburg $ (800,000) $ (600,000) 100,000 150,000 300,000 350,000 (20,000) -0- S (420,000) $ (100,000) $(1,100,000) $ (320,000) (420,000) (100,000) 120,000 20,000 S(1,400,000) $ (400,000) $ 300,000 $ 100,000 600,000 -0- 900,000 600,000 800,000 400,000 600,000 100,000 $3,200,000 $1,200,000 $ (900,000) $ (500,000) (900,000) (300,000) (1,400,000) (400,000) $(3,200,000) $(1,200,000) 24. Foxx Corporation acquired all of Greenburg Company's outstanding stock on January 1, 2019, for $600,000 cash. Greenburg's accounting records showed net assets on that date of $470,000, although equipment with a 10-year remaining life was undervalued on the records by $90,000. Any recognized goodwill is considered to have an indefinite life. Greenburg reports net income in 2019 of $90,000 and $100,000 in 2020. The subsidiary declared dividends of $20,000 in each of these two years. Account balances for the year ending December 31, 2021, follow. Credit balances are indicated by parentheses. page 138 Revenues.. Cost of goods sold. Depreciation expense. Investment income.. Net income Retained earnings, 1/1/21 Net income... Dividends declared. Retained earnings, 12/31/21 Current assets. Investment in subsidiary Equipment (net). Buildings (net) Land Total assets Liabilities. Common stock. Retained earnings. Total liabilities and equity Foxx Greenburg $ (800,000) $ (600,000) 100,000 150,000 300,000 350,000 (20,000) -0- S (420,000) $ (100,000) $(1,100,000) $ (320,000) (420,000) (100,000) 120,000 20,000 S(1,400,000) $ (400,000) $ 300,000 $ 100,000 600,000 -0- 900,000 600,000 800,000 400,000 600,000 100,000 $3,200,000 $1,200,000 $ (900,000) $ (500,000) (900,000) (300,000) (1,400,000) (400,000) $(3,200,000) $(1,200,000)

Answer rating: 100% (QA)

Answer To solve this problem we need to follow the steps provided 1 Prepare a schedule to determine goodwill and to allocate fair value Fair Value of ... View the full answer