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32. Following Several of Mergaronite's accounts have been omitted. Credit balances are indicated by parenthe Dividends were declared and paid in the same period. are
32. Following Several of Mergaronite's accounts have been omitted. Credit balances are indicated by parenthe Dividends were declared and paid in the same period. are selected accounts for Mergaronite Company and Hill, Inc, as of December 31, 2018. ses. Mergaronite Hill $(250,000) 100,000 Revenues Cost of goods sold Depreciation expense Investment income. Retained earnings, 1/1/18. Dividends declared.... 280,000 120,000 Not given (900,000) 50,000 NA (600,000) 40,000 690,000 90,000 140,000 130,000 200,000 300,000 Land. 500,000 Buildiggs (net) 250,000 200,000 (400,000) (300,000) (50.000) (310,000) (40,000) (160,000) Liabilities. Additional paid-in capital. Assume that Mergaronite took over Hill on January 1,2014, by issuing 7,000 shares of common stock having a par value of $10 per share but a fair value of $100 each. On January 1, 2014, Hills land was undervalued by $20,000, its buildings were overvalued by $30,000, and equipment was undervalued by $60,000. The buildings had a 10-year remaining life; the equipment had a 5-year remaining life. A customer list with an appraised value of S100.000 was developed intenally by Hill and was to be written off over a 20-year period. a. Determine and explain the December 31, 2018, consolidated totals for the following accounts: Revenues Amortization Expense Buildings Equipment Customer List Common Stock Cost of Goods Sold Depreciation Expense Additional Paid-In Capital b. In requirement (a), why can the consolidated totals be determined without knowing which method the parent used to account for the subsidiary? c. If the parent uses the equity method. what consolidation entries would be used on a 2018 worksheer
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