Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Acme Corporation has been operating profitably since its creation in 1 9 9 8 . At the beginning of 2 0 2 2 , Acme
Acme Corporation has been operating profitably since its creation in At the beginning of Acme acquired a percent ownership in Beta Company. At the acquisition date, Acme prepared the following fairvalue allocation schedule:
Consideration transferred for interest in Beta $
Fair value of the noncontrolling interest
Beta business fair value $
Beta book value
Excess fair value over book value $
Assignments to adjust Betas assets to fair value:
To buildings year remaining life $
To equipment year remaining life
To franchises year remaining life
To trademarks indefinite life
Acme regularly buys inventory from Beta at a markup of percent more than cost. Acme's purchases during and and related ending inventory balances follow:
Year IntraEntity Purchases Remaining IntraEntity Inventory End of Year at transfer price
$ $
During Acme acquired additional inventory from Beta at a price of $ Of this merchandise, percent is still held at yearend.
On January Acme and Beta acted together as coacquirers of percent of Cade Company's outstanding common stock. The total price of these shares was $ indicating neither goodwill nor other specific fairvalue allocations. Each company put up onehalf of the consideration transferred.
Items Acme Corporation Beta Company Cade Company
Sales and other revenues $ $ $
Cost of goods sold
Operating expenses
Income of Beta Company
Income of Cade Company
Net income $ $ $
Retained earnings, $ $ $
Net income above
Dividends declared
Retained earnings, $ $ $
Cash and receivables $ $ $
Inventory
Investment in Beta Company
Investment in Cade Company
Buildings
Equipment
Land
Total assets $ $ $
Liabilities $ $ $
Common stock
Retained earnings,
Total liabilities and equities $ $ $
Note: Parentheses indicate a credit balance.
Required:
Using the three companies financial records for prepare a consolidation worksheet. The equity method has been applied to each investment.
Note: 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. Input all amounts as positive values.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started