On January 1, 2007, Harrah's Entertainment, Inc. acquired a 70 percent interest in the company that owned
Question:
On January 1, 2007, Harrah's Entertainment, Inc. acquired a 70 percent interest in the company that owned Emerald Safari Resort for \($592\) million in cash and stock. Harrah's is now part of Caesar's Entertainment Corporation. Assume the following information at the date of acquisition (in millions):
The previously unrecorded identifiable intangibles have indefinite lives. In the years since this acquisition, intense competition and a declining economic outlook led to reduced projected performance for this property. Testing indicated impairment of the identifiable intangibles by a total of \($40\) million as of the end of 2014, and \($10\) million additional impairment occurred in 2015. The entire goodwill balance associated with this property has been written off prior to 2015. The December 31, 2015 trial balances of Harrah’s and Emerald Safari Resort follow. Harrah’s uses the complete equity method to report the investment on its own books.
Required
a. Prepare a schedule to calculate the 2015 equity in net loss and the noncontrolling interest in the net loss of Emerald Safari Resort.
b. Prepare a consolidation worksheet to consolidate the December 31, 2015, trial balances of Harrah’s Entertainment and Emerald Safari Resort.
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