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Posted on Jul 24, 2024

1 54. Consolidation subsequent to date of Requisition Equity method with moncontrolling interest LOS and AAP Assume, on January 1, 2013, a parent company acquires

1 54. Consolidation subsequent to date of Requisition Equity method with moncontrolling interest LOS and AAP Assume, on January 1, 2013, a parent company acquires a 76 interest in its subsidiary. The total fair X value of the controlling and noncontrolling interests was 5405,000 over the book value of the subsid- iary's Stockholders' Equity on the acquisition date. The parent assigned the excess to the following IAJ assets: Initial Value [A] Asset Useful Life Paten Goodwill 10 years $270.00 135,000 $405.000 Indefinite 75% of the Goodwill is allocated to the parent. The parent and the subsidiary report the following pre-consolidation financial statements at December 31, 2019. 374 Chapter 5 Consolidated Finance Show Less Than 100Owners Cambridge Business Publishers Parent Subsidiary Parent Subsidiary 30.000 300.000 722.000 Income statement Sales $6,300.000 Cost of goods sold 3.780.000 Gross profit 2.520.000 Income from subsidiary 114.750 Operating expenses (1.620.000 Net income $1.014,750 Statement of retained earninger Beginning retained caringe... 51A73.250 Not income 1,014750 Dividende (171.000 Ending retained camings $2.317.000 Balance sheet $1,620.000 Cash (900.000) Accounts receivable 720.000 Inventory Equity Investment (540.000 Property, plant and equipment.net $ 100.000 $ 270.000 540.000 720.000 1377.000 1.800.000 $4.707.000 1.000.000 $ 873.000 Current 180.000 Long tomb 190.000) Common stock 303,000 Additional paid in capital Retained eaming $ 500.000 900.000 540.000 300.000 2,317.000 407000 $ 162.000 40.000 252.000 405.000 4. Die and document the activity for the 100 Acquisition Accounting (AAP) the controlling interest AAP and the controlling AAR . Calculate and organize the profits and losses on intercompany actions and balance Compute the pre-consolidation quity lovestment com lening and coding balances Marting with the stockholders' equity of the day, 4. Reconstruct the activity in the part's pre-consolidation Equity is account for the year of consolidation Independently compute the owner'equity table to the controlling ret beginning and ending balances Marting with the owner'equity of the subsidiary Independently calculate consolidated net inco, controlling interested income and non controlling interest net income Complete the consolidating entries according to the CE-A-D-I sequence and complete the consolidation worksheet. hod with no controlling interest 1 54. Consolidation subsequent to date of Requisition Equity method with moncontrolling interest LOS and AAP Assume, on January 1, 2013, a parent company acquires a 76 interest in its subsidiary. The total fair X value of the controlling and noncontrolling interests was 5405,000 over the book value of the subsid- iary's Stockholders' Equity on the acquisition date. The parent assigned the excess to the following IAJ assets: Initial Value [A] Asset Useful Life Paten Goodwill 10 years $270.00 135,000 $405.000 Indefinite 75% of the Goodwill is allocated to the parent. The parent and the subsidiary report the following pre-consolidation financial statements at December 31, 2019. 374 Chapter 5 Consolidated Finance Show Less Than 100Owners Cambridge Business Publishers Parent Subsidiary Parent Subsidiary 30.000 300.000 722.000 Income statement Sales $6,300.000 Cost of goods sold 3.780.000 Gross profit 2.520.000 Income from subsidiary 114.750 Operating expenses (1.620.000 Net income $1.014,750 Statement of retained earninger Beginning retained caringe... 51A73.250 Not income 1,014750 Dividende (171.000 Ending retained camings $2.317.000 Balance sheet $1,620.000 Cash (900.000) Accounts receivable 720.000 Inventory Equity Investment (540.000 Property, plant and equipment.net $ 100.000 $ 270.000 540.000 720.000 1377.000 1.800.000 $4.707.000 1.000.000 $ 873.000 Current 180.000 Long tomb 190.000) Common stock 303,000 Additional paid in capital Retained eaming $ 500.000 900.000 540.000 300.000 2,317.000 407000 $ 162.000 40.000 252.000 405.000 4. Die and document the activity for the 100 Acquisition Accounting (AAP) the controlling interest AAP and the controlling AAR . Calculate and organize the profits and losses on intercompany actions and balance Compute the pre-consolidation quity lovestment com lening and coding balances Marting with the stockholders' equity of the day, 4. Reconstruct the activity in the part's pre-consolidation Equity is account for the year of consolidation Independently compute the owner'equity table to the controlling ret beginning and ending balances Marting with the owner'equity of the subsidiary Independently calculate consolidated net inco, controlling interested income and non controlling interest net income Complete the consolidating entries according to the CE-A-D-I sequence and complete the consolidation worksheet. hod with no controlling interest