Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1 question, please answer all parts Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid $728,000 in cash

image text in transcribed

image text in transcribed

1 question, please answer all parts

Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid $728,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $182,000 both before and after Miller's acquisition. On January 1, 2019, Taylor reported a book value of $474,000 (Common Stock = $237,000; Additional Paid-In Capital = $71,100; Retained Earnings = $165,900). Several of Taylor's buildings that had a remaining life of 20 years were undervalued by a total of $63,200. During the next three years, Taylor reports income and declares dividends as follows: Year 2019 2020 2021 Net Income $55,600 72,900 81,300 Dividends $ 8,100 12,200 16,300 answers for each of the following questions: a. What amount of excess depreciation expense should be recognized in the consolidated financial statements for the initial years following this acquisition? b. If a consolidated balance sheet is prepared as of January 1, 2019, what amount of goodwill should be recognized? c. If a consolidation worksheet is prepared as of January 1, 2019, what Entry S and Entry A should be included? d. On the separate financial records of the parent company, what amount of investment income would be reported for 2019 under each of the following accounting methods? The equity method. The partial equity method. The initial value method. e. On the parent company's separate financial records, what would be the December 31, 2021, balance for the Investment in Taylor Company account under each of the following accounting methods? The equity method. The partial equity method. The initial value method. 5 f. As of December 31, 2020, Miller's Buildings account on its separate records has a balance of $652,000 and Taylor has a similar account with a $244,500 balance. What is the consolidated balance for the Buildings account? g. What is the balance of consolidated goodwill as of December 31, 2021? h. Assume that the parent company has been applying the equity method to this investment. On December 31, 2021, the separate financial statements for the two companies present the following information

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Teams Dynamics And Efficiency

Authors: Mara Cameran, Angelo Ditillo, Angela Pettinicchio

1st Edition

1032097000, 9781032097008

More Books

Students also viewed these Accounting questions

Question

LO.1 Demonstrate why taxation is important.

Answered: 1 week ago