Advanced Financial Accounting and Reporting Consolidation Case - Part II Aston Corporation acquired 80 percent of the stock of Martin Company on January 1, 20x1, for $150,000. At acquisition, Martin Company reported retained earnings of $75,000. Aston accounts for its investment in Martin using the simple equity method. Trial balance data for Aston Corporation and Martin Company on December 31, 20X3 are as follows: Corporation Credit Aston Corporation Debit Credit 34.000 180,000 320,000 130,000 750,000 Martin Debit 115,000 95,000 135,000 75,000 100,000 Cash Accounts Receivable Inventory Land Buildings and Equipment Investment in: Bonds - Other Stock - Martin Other Investment Cost of Goods Sold Depreciation Expense Interest Expense Other Expense Dividends Declared Accumulation Depreciation Accounts Payable Bonds payable Bond Premium Common Stock Retained Earnings Sales Interest Income Income from Subsidiary 103,500 226,000 3.500 320,000 50,000 36,000 24,000 20,000 160,000 5,000 7,000 38,000 10,000 500,000 210,000 400,000 40,000 103,000 100,000 7,000 100,000 150,000 240,000 200,000 355,500 500.000 7,500 24,000 2,197,000 2,197,000 740,000 740,000 Additional Information: 1. The excess for the determination and distribution schedule at the date of acquisition related to the following assets of Martin Company: 25% to Inventory that was sold during 20X2 to an unrelated party 25% to Land, Parcel A, that was sold by Martin in 20X2 to an unrelated party for a gain of $800. 25% to Equipment with a remaining useful life of 10 years from the date of combination 2. In 20X2, Martin sells land, Parcel B, to Aston for $17,000; the land originally cost Martin $15,000. Aston continues to hold the land. 3. On January 1, 120X2, Martin sells a machine to Aston for $7,000. The machine originally cost Martin $6,000, and it was depreciated on a straight-line basis with no salvage over a 10-year life; 7 years remain at the date of intercompany sale. 4. Aston and Martin both produce inventory for resale each period and frequently sell to each other. The following intercompany transactions occurred between the two companies in 20X2 and 20X3: Percent Resold to Nonaffiliate in 20X2 20X3 Sale Price to Affiliate Year Cost to Produce Produced by Sold to 20X2 20X2 20X3 20X3 Aston Martin Aston Martin Martin Aston Martin Aston 6040 30 50 90 $100,000 70,000 40,000 200,000 $150,000 100,000 60,000 240,000 Required: NOTE: Make changes necessary to the spreadsheet submitted for Part I of the Consolidation Case and use it as the template for Part II. I. In your Excel spreadsheet: A. Prepare the value analysis schedule and the determination and distribution of excess schedule. Show all of the compilations and computations necessary to support amounts recorded in the eliminating entries. B. Prepare all of the eliminating and adjusting entries that would be made on the consolidation worksheet as of December 31, 20X3. C. Prepare a consolidation worksheet for 20X3 in good form. D. Prepare the following consolidated financial statements for 20X3 in good form: 1. Consolidated Balance Sheet; 2. Consolidated Income Statement; and 3. Consolidated Retained Earnings Statement. II. Submit your solution to the Canvas assignment link for Consolidation Case - Part II. Your solution must meet the requirements for the case; and must be submitted to Canvas by the due date and time. The solution to the case will be presented in class. Late submissions are not accepted. III. Group 2 - Part II, submit your group's presentation to the Canvas assignment link. Each member of the group must participate in the presentation of the group's solution to Part II of the case to the class. Advanced Financial Accounting and Reporting Consolidation Case - Part II Aston Corporation acquired 80 percent of the stock of Martin Company on January 1, 20x1, for $150,000. At acquisition, Martin Company reported retained earnings of $75,000. Aston accounts for its investment in Martin using the simple equity method. Trial balance data for Aston Corporation and Martin Company on December 31, 20X3 are as follows: Corporation Credit Aston Corporation Debit Credit 34.000 180,000 320,000 130,000 750,000 Martin Debit 115,000 95,000 135,000 75,000 100,000 Cash Accounts Receivable Inventory Land Buildings and Equipment Investment in: Bonds - Other Stock - Martin Other Investment Cost of Goods Sold Depreciation Expense Interest Expense Other Expense Dividends Declared Accumulation Depreciation Accounts Payable Bonds payable Bond Premium Common Stock Retained Earnings Sales Interest Income Income from Subsidiary 103,500 226,000 3.500 320,000 50,000 36,000 24,000 20,000 160,000 5,000 7,000 38,000 10,000 500,000 210,000 400,000 40,000 103,000 100,000 7,000 100,000 150,000 240,000 200,000 355,500 500.000 7,500 24,000 2,197,000 2,197,000 740,000 740,000 Additional Information: 1. The excess for the determination and distribution schedule at the date of acquisition related to the following assets of Martin Company: 25% to Inventory that was sold during 20X2 to an unrelated party 25% to Land, Parcel A, that was sold by Martin in 20X2 to an unrelated party for a gain of $800. 25% to Equipment with a remaining useful life of 10 years from the date of combination 2. In 20X2, Martin sells land, Parcel B, to Aston for $17,000; the land originally cost Martin $15,000. Aston continues to hold the land. 3. On January 1, 120X2, Martin sells a machine to Aston for $7,000. The machine originally cost Martin $6,000, and it was depreciated on a straight-line basis with no salvage over a 10-year life; 7 years remain at the date of intercompany sale. 4. Aston and Martin both produce inventory for resale each period and frequently sell to each other. The following intercompany transactions occurred between the two companies in 20X2 and 20X3: Percent Resold to Nonaffiliate in 20X2 20X3 Sale Price to Affiliate Year Cost to Produce Produced by Sold to 20X2 20X2 20X3 20X3 Aston Martin Aston Martin Martin Aston Martin Aston 6040 30 50 90 $100,000 70,000 40,000 200,000 $150,000 100,000 60,000 240,000 Required: NOTE: Make changes necessary to the spreadsheet submitted for Part I of the Consolidation Case and use it as the template for Part II. I. In your Excel spreadsheet: A. Prepare the value analysis schedule and the determination and distribution of excess schedule. Show all of the compilations and computations necessary to support amounts recorded in the eliminating entries. B. Prepare all of the eliminating and adjusting entries that would be made on the consolidation worksheet as of December 31, 20X3. C. Prepare a consolidation worksheet for 20X3 in good form. D. Prepare the following consolidated financial statements for 20X3 in good form: 1. Consolidated Balance Sheet; 2. Consolidated Income Statement; and 3. Consolidated Retained Earnings Statement. II. Submit your solution to the Canvas assignment link for Consolidation Case - Part II. Your solution must meet the requirements for the case; and must be submitted to Canvas by the due date and time. The solution to the case will be presented in class. Late submissions are not accepted. III. Group 2 - Part II, submit your group's presentation to the Canvas assignment link. Each member of the group must participate in the presentation of the group's solution to Part II of the case to the class