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Answer the following question Income Statement was realized for the period after acquisition of Small by Big USE This In the period of operations Dividends
Answer the following question
| Income Statement was realized for the period after acquisition | |||||||||||
| of Small by Big | |||||||||||
| USE This | In the period of operations Dividends Small to Big = | $1,20,000 | |||||||||
| To Do: | |||||||||||
| Prepare Consolidated Income Statement and | |||||||||||
| Consolidated Balance Sheet of the Form set forth in the Excel Examples | |||||||||||
| AND reflect changes due to amortizing FV adjustments | Data Set | ||||||||||
| Consolidating Balance Sheet Before operations | |||||||||||
| Big | Small | ||||||||||
| Assets: | $s | $s | debit | Credit | Consol. | ||||||
| Cash | 6,40,000 | 4,40,000 | 0 | 0 | 10,80,000 | ||||||
| A/R | 32,00,000 | 11,00,000 | 50,000 | 0 | 43,50,000 | ||||||
| Inventory | 21,00,000 | 14,50,000 | 0 | 35,50,000 | |||||||
| Current Assets | 59,40,000 | 29,90,000 | 89,80,000 | ||||||||
| Net PPE | 44,00,000 | 18,00,000 | 1,20,000 | 0 | 63,20,000 | Small | Small | ||||
| Investments | 27,50,000 | 0 | 0 | 27,50,000 | 0 | Book | FV | ||||
| Intangibles [patents & trademarks] | 0 | 0 | 2,75,000 | 0 | 2,75,000 | Intangibles | |||||
| Goodwill | 1,10,000 | 0 | 75,000 | 0 | 1,85,000 | Patents | 0 | 1,00,000 | |||
| Total Assets | 1,32,00,000 | 47,90,000 | 1,57,60,000 | Trademarks | 0 | 1,75,000 | |||||
| Total intangibles | 2,75,000 | ||||||||||
| Current Liabilities | 30,00,000 | 7,90,000 | 30,000 | 0 | 37,60,000 | ||||||
| 0 | 0 | 0 | 0 | 0 | 0 | ||||||
| Long term Debt | 29,00,000 | 18,00,000 | 0 | 0 | 47,00,000 | ||||||
| Total Liabilities | 59,00,000 | 25,90,000 | 84,60,000 | ||||||||
| Equity: Capital | 63,00,000 | 18,00,000 | 18,00,000 | 0 | 63,00,000 | ||||||
| Equity: Retained earnings | 10,00,000 | 4,00,000 | 4,00,000 | 0 | 10,00,000 | ||||||
| Total Equity | 73,00,000 | 22,00,000 | 73,00,000 | ||||||||
| Total Liabilities & Equity | 1,32,00,000 | 47,90,000 | 27,50,000 | 27,50,000 | 1,57,60,000 | ||||||
| check | 0 | 0 | 0 | ||||||||
| Fair Value adjustments are in the BS above | Calculate | enter whether Debit or credit | |||||||||
| FV Greater/(Less) | Life | Period amortzn.. | Debit or Credit | ||||||||
| A/R | 1 | ||||||||||
| Net PPE | 5 | ||||||||||
| Inventory | 1 | ||||||||||
| Curr. Liab. | 1 | ||||||||||
| Patents | 4 | ||||||||||
| Trademarks | Indefinite | ||||||||||
| Goodwill | N/A | ||||||||||
| Total: | Sum | ||||||||||
| Consolidated Income Statement | |||||||||||
| Consolidating entries | Income statement | ||||||||||
| Small | Big | Debit | Credit | Consolidated | |||||||
| Net Revenue | 15,70,000 | 40,50,000 | |||||||||
| CoGS | 7,50,000 | 33,00,000 | |||||||||
| Gross Profit | 8,20,000 | 7,50,000 | |||||||||
| Expenses | 3,50,000 | 4,80,000 | |||||||||
| Small equity-Other (Income)/Expense | 0 | ||||||||||
| Income before tax | 4,70,000 | ||||||||||
| Taxes | 85,000 | 1,30,000 | |||||||||
| Net Income | 3,85,000 | ||||||||||
| Show calculations for | |||||||||||
| Small equity-Other (Income)/Expense | |||||||||||
| Then enter into box E57 then Big Income before tax then Big Net Income | |||||||||||
| Then do consolidating entries Then do consolidated Income statement | |||||||||||
| Shown calculations [see Excel] | |||||||||||
| First complete Big investments | |||||||||||
| Then Big RE then Small Capital then Small RE then Total Equity | |||||||||||
| Then use cash for both Big & Small to balance then CA and CL then Total Liabilties add A = L + Eq --- must balance | |||||||||||
| After operations | Consolidating | Consolidating | |||||||||
| BIG PE | Small PE | Adjustments | Adjustments | ||||||||
| Assets: | $s | $s | Debit | Credit | Consolidated | ||||||
| Cash | Back into cash | ||||||||||
| A/R | 30,00,000 | 10,50,000 | |||||||||
| Inventory | 21,00,000 | 14,00,000 | |||||||||
| Intangible: Customer contracts | 0 | 0 | |||||||||
| Current Assets | |||||||||||
| Net PPE | 43,50,000 | 17,75,000 | |||||||||
| Investments | 0 | ||||||||||
| Intangibles [Patents/trademarks] | 0 | 0 | |||||||||
| Goodwill | 1,10,000 | 0 | |||||||||
| Total Assets | |||||||||||
| Current Liabilities | 31,00,000 | 7,95,000 | |||||||||
| 0 | 0 | ||||||||||
| Long term Debt | 30,00,000 | 26,00,000 | |||||||||
| Total Liabilities | 61,00,000 | 33,95,000 | |||||||||
| Equity: Capital | 63,00,000 | ||||||||||
| Equity: Retained earnings | |||||||||||
| Total Equity | |||||||||||
| Total Liabilities & Equity | |||||||||||
| Check | |||||||||||
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The Board Of Directors And Audit Committee Guide To Fiduciary Responsibilities Ten Critical Steps To Protecting Yourself And Your Organization
Authors: Sheila Moran CPA CFE, Ronald Kral CPA CMA
1st Edition
0814431666, 978-0814431665
