7/11
please fix Req. A
On January 1, 2017, Travers Company acquired 90 percent of Yarrow Company's outstanding stock for $891,000. The 10 percent noncontrolling interest had an assessed fair value of $99,000 on that date. Any acquisition-date excess fair value over book value was attributed to an unrecorded customer list developed by Yarrow with a remaining life of 15 years. On the same date, Yarrow acquired an 80 percent interest in Stookey Company for $496,000. At the acquisition date, the 20 percent noncontrolling interest fair value was $124,000. Any excess fair value was attributed to a fully amortized copyright that had a remaining life of 10 years. Although both investments are accounted for using the initial value method, neither Yarrow nor Stookey have distributed dividends since the acquisition date. Travers has a policy to declare and pay cash dividends each year equal to 40 percent of its separate company operating earnings. Reported income totals for 2017 follow: Travers Company Yarrow Company Stookey Company $ 490,000 255,000 196,000 Following are the 2018 financial statements for these three companies. Stookey has transferred numerous amounts of inventory to Yarrow since the takeover amounting to $118,000 (2017) and $147,500 (2018). These transactions include the same markup applicable to Stookey's outside sales. In each year, Yarrow carried 20 percent of this inventory into the succeeding year before disposing of it. An effective tax rate of 40 percent is applicable to all companies. All dividend declarations are paid in the same period. Travers Yarrow Stookey Company Company Company Sales $(1,090,000) $ (746,300) $ (538,000) Cost of goods sold 580,700 397,900 322,800 Operating expenses 129,900 99,000 107,600 Net income $ (388,400) $ (249,400) $ (107.600) Retained earnings, 1/1/18 5 (890,000) (748,280) $ 471,000) Net Income (above) (388,400) (249, 400) (107,600) Dividends declared 155, 360 Retained earnings, 12/31/18 $(1,123,040) $ 1997.600) $ (578,600) Current assets 559,900 $ 473, 100 Investment in Yarrow Company $382.700 891,000 a Investment in Stookey Company 0 496,000 Land, buildings, and equipment (net) 1,175, 100 874,000 508.600 Total assets $ 2,626,000 $ 1,843, 100 $ 891,300 $ 0 $ Return to questa 891,00 Investment in Tarrow company Investment in Stookey Company Land, buildings, and equipment (net) Total assets Liabilities Common stock Retained earnings, 12/31/18 Total liabilities and equities 1,175, 100 $ 2,626,000 $(1.602,968) (500,000) (1,123,040) $(2,626,000) 496, 088 874,000 $ 1,843, 100 $ (522,700) (322,800) (997,680) $(1,843, 100) 508,600 $ 891,300 $ (112,700) (200, eee) (578,688) $ (891,300) Note: Parentheses indicate a credit balance. a. Prepare the business combination's 2018 consolidation worksheet; ignore income tax effects. b. Determine the amount of income tax for Travers and Yarrow on a consolidated tax return for 2018 c. Determine the amount of Stookey's income tax on a separate tax return for 2018 d. Based on the answers to requirements (b) and (c), what journal entry goes this combination make to record 2018 income tax? Answer is not complete. Complete this question by entering your answers in the tabs below. ReqA Red Band Reg D Prepare the business combination's 2018 consolidation worksheet; ignore income tax effects. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign. Round your answers to nearest whole dollar amount. ) Show less TRAVERS COMPANY AND CONSOLIDATED SUBSIDIARIES Consolidation Worksheet Return Accounts TRAVERS COMPANY AND CONSOLIDATED SUBSIDIARIES Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Travers Yarrow Stookey Company Credit Debit Company Company (1,090,000) (746,300) (538,000) 147,500 580,700 397.900 322,800 11,800 156,940 120,000 99,000 107,600 26,100 (388,400) (249.400) (107.600) Consolidated Noncontrolling Interest Balance (2,226,800) 1,156,260 353,600 (32,854) (18,148) (716,940) 32,854 18,148 (665,938) Sales and other revenue Cost of goods sold Operating expenses Separate company net income Consolidated net income Net income attributable to NCI (Yarrow) Net income attributable to NCI (Stookey) Net income attributable to travers Company Retained earnings, 1/1/18 Travers Company Yarrow Company Stookey Company Net Income (above) Dividends declared Retained earnings, 12/31/18 Current assets Investment in Yarrow Company Investment in Stookey Company Land buildings & equipment (net) Copyright Customer list Total assets (890,000) (748,200) 885.848 471,000 (249,400) (471,000) (107.600) (388.400) 155,360 (1,123,040) 559.900 891 000 (997.600) 473,100 (578.600) 382.700 0 11.800 342.943 1,087,783 137.648 146.160 1,175, 100 496,000 874.000 508,600 164.400 26.100 14,500 2.626.000 1,843.100 891 300 0 a. Prepare the business combination's 2018 consolidation worksheet; ignore income tax effects. b. Determine the amount of income tax for Travers and Yarrow on a consolidated tax return for 2018. c. Determine the amount of Stookey's income tax on a separate tax return for 2018. d. Based on the answers to requirements (b) and (c), what journal entry does this combination make to record 2018 income tax Answer is not complete. Complete this question by entering your answers in the tabs below. Req A Reg Band Reg D Red Band b. Determine the amount of income tax for Travers and Yarrow on a consolidated tax return for 2018. c. Determine the amount of Stookey's income tax on a separate tax return for 2018. b. Income tax payable Income tax payable S 244.680 $ 43,040 PELLIEU canys, Total liabilities and equities $(2,626,000) vu $(1,843, 100) HUVU $ (891,300) Note: Parentheses indicate a credit balance. a. Prepare the business combination's 2018 consolidation worksheet; ignore income tax effects b. Determine the amount of income tax for Travers and Yarrow on a consolidated tax return for 2018 c. Determine the amount of Stookey's income tax on a separate tax return for 2018. d. Based on the answers to requirements (b) and (c), what journal entry does this combination make to record 2018 income tax? Answer is not complete. Complete this question by entering your answers in the tabs below. Req A Red Band Reg D Based on the answers to requirements (b) and (c), what journal entry does this combination make to record 2018 income tax? (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) No Transaction 1 1 Debit General Journal Deferred income tax-Asset Income tax expense Current Income tax payable Credit 944 ololo 286,776
