Big Co acquired 70% of the common Stock of Little Co. on 1/1/22 for $301,000. The fair value of the non-controlling interest was $129,000. Little's book value on that date was $300,000. Little had the following misvalued/unreported assets and liabilities: Land, undervalued by $5,000 Inventory, FIFO basis, undervalued by $10,000 Equipment, 10 year life, undervalued by $60,000 Customer list, 2 year life, valued at $20,000 but unreported on balance sheet (record amortization as "other expense") Any remaining differential is attributed to goodwill Big Co uses the EQUITY METHOD to account for their investment in Little In 2022, Little reported earnings of $70,000 and paid dividends of $10,000 In 2023 Little reported earnings of $30,000 and paid dividends of $15,000. The trial balances for 1/1/22,12/31/22, and 12/31/23 are given below. Required: Prepare elimination entries at 1/1/22 and complete the "Consolidation at acquisition" (1/1/22) worksheet 1. Prepare elimination entries at 1/1/22 and complete the "Consolidation at acquisition" (1/1/22) worksheet 2. Prepare elimination entries at 12/31/23 and complete the "Consolidation at acquisition" (12/31/23) worksheet 3. Prepare elimination entries at12/31/22 and complete the "Consolidation at acquisition" (12/31/22) worksheet You HAVE to "work down" the Big and Little columns in the 12/31/22 worksheet to get the ending R/E values to plug into the 12/31/23 worksheet! Please note that there is no question 3 or question 13. \begin{tabular}{|r|l|l|} \hline 1 & 50,000 & What is the value in cell F46 \\ \hline 2 & 129,000 & What is the value in cell F61 \\ \hline 3 & 0 & What is the value in cell I36? \\ \hline 4 & 0 & What is the value in cell K38? \\ \hline 5 & 0 & What is the value in cel L38? \\ \hline 6 & 370,000 & What is the value in cell M33 \\ \hline 7 & 0 & What is the value in cell M37 \\ \hline 8 & 0 & What is the value in cell M39 \\ \hline 9 & 0 & What is the value in cell M42? \\ \hline 10 & 82,000 & What is the value in cell M48? \\ \hline 11 & 0 & What is the value in cell M61? \\ \hline 12 & 0 & What is the value in cell P36? \\ \hline 13 & 0 & What is the value in cell T37? \\ \hline 14 & 0 & What is the value in cell P41? \\ \hline 15 & 0 & What is the value in cell T51? \\ \hline 16 & 0 & What is the value in cell T60? \\ \hline 17 & 0 & What is the value in cell T61? \\ \hline \end{tabular} \begin{tabular}{|l|r|r|l|l|l|} \hline & \multicolumn{1}{|l|}{ Big } & \multicolumn{1}{l|}{ Little } & dr & Cr & Consol. \\ \hline Sales & 370000 & 280000 & & & \\ \hline Cost of goods sold & 220000 & 160000 & & & \\ \hline Depreciation expense & 40000 & 30000 & & & \\ \hline Other expenses & 50000 & 60000 & & & \\ \hline Investment income & & & & & \\ \hline Consolidated net income & & 30000 & & & \\ \hline Less: Income to NC Interest & & & & & \\ \hline Income to controlling interest & & & & & \\ \hline & & & & & \\ \hline Beginning R/E & & & & & \\ \hline Add: Income & & 30000 & & & \\ \hline Less: Dividends & 20000 & 15000 & & & \\ \hline Ending R/E & & & & & \\ \hline & & & & & \\ \hline Cash & 40000 & 30000 & & & \\ \hline Receivables & 45000 & 35000 & & & \\ \hline Inventory & 50000 & 35000 & & & \\ \hline Investment in Little & 324100 & & & & \\ \hline Land & 60000 & 60000 & & & \\ \hline Equipment, net & 180000 & 190000 & & & \\ \hline Customer list & & & & & \\ \hline Patents & 20000 & 10000 & & & \\ \hline Goodwill & & & & & \\ \hline Other assets & 172500 & 215000 & & & \\ \hline & & & & & \\ \hline Accounts payable & 40000 & 50000 & & & \\ \hline Bonds payable & 300000 & 150000 & & & \\ \hline Common Stock & 200000 & 100000 & & & \\ \hline Retained earnings & & & & \\ \hline Non-controlling interest & & & & & \\ \hline \end{tabular} January 1, 2022 \begin{tabular}{|l|r|r|l|l|l|} \hline & \multicolumn{1}{|l|}{ Big } & \multicolumn{1}{l|}{ Little } & dr & cr & Consol. \\ \hline Cash & 30000 & 20000 & & & 50000 \\ \hline Receivables & 35000 & 30000 & & & \\ \hline Inventory & 45000 & 50000 & & & \\ \hline Investment in Little & 301000 & 0 & & & \\ \hline Land & 60000 & 60000 & & & \\ \hline Equipment, net & 260000 & 250000 & & & \\ \hline Customer list & & & & & \\ \hline Patents & 30000 & 20000 & & & \\ \hline Goodwill & & & & & \\ \hline Other assets & 20000 & 70000 & & & \\ \hline & & & & & \\ \hline Accounts payable & 60000 & 50000 & & & \\ \hline Bonds payable & 300000 & 150000 & & & \\ \hline Common Stock & 200000 & 100000 & & & \\ \hline Retained earnings & 221000 & 200000 & & & \\ \hline NC Interest & & & & & \\ \hline \end{tabular} Big Co acquired 70% of the common Stock of Little Co. on 1/1/22 for $301,000. The fair value of the non-controlling interest was $129,000. Little's book value on that date was $300,000. Little had the following misvalued/unreported assets and liabilities: Land, undervalued by $5,000 Inventory, FIFO basis, undervalued by $10,000 Equipment, 10 year life, undervalued by $60,000 Customer list, 2 year life, valued at $20,000 but unreported on balance sheet (record amortization as "other expense") Any remaining differential is attributed to goodwill Big Co uses the EQUITY METHOD to account for their investment in Little In 2022, Little reported earnings of $70,000 and paid dividends of $10,000 In 2023 Little reported earnings of $30,000 and paid dividends of $15,000. The trial balances for 1/1/22,12/31/22, and 12/31/23 are given below. Required: Prepare elimination entries at 1/1/22 and complete the "Consolidation at acquisition" (1/1/22) worksheet 1. Prepare elimination entries at 1/1/22 and complete the "Consolidation at acquisition" (1/1/22) worksheet 2. Prepare elimination entries at 12/31/23 and complete the "Consolidation at acquisition" (12/31/23) worksheet 3. Prepare elimination entries at12/31/22 and complete the "Consolidation at acquisition" (12/31/22) worksheet You HAVE to "work down" the Big and Little columns in the 12/31/22 worksheet to get the ending R/E values to plug into the 12/31/23 worksheet! Please note that there is no question 3 or question 13. \begin{tabular}{|r|l|l|} \hline 1 & 50,000 & What is the value in cell F46 \\ \hline 2 & 129,000 & What is the value in cell F61 \\ \hline 3 & 0 & What is the value in cell I36? \\ \hline 4 & 0 & What is the value in cell K38? \\ \hline 5 & 0 & What is the value in cel L38? \\ \hline 6 & 370,000 & What is the value in cell M33 \\ \hline 7 & 0 & What is the value in cell M37 \\ \hline 8 & 0 & What is the value in cell M39 \\ \hline 9 & 0 & What is the value in cell M42? \\ \hline 10 & 82,000 & What is the value in cell M48? \\ \hline 11 & 0 & What is the value in cell M61? \\ \hline 12 & 0 & What is the value in cell P36? \\ \hline 13 & 0 & What is the value in cell T37? \\ \hline 14 & 0 & What is the value in cell P41? \\ \hline 15 & 0 & What is the value in cell T51? \\ \hline 16 & 0 & What is the value in cell T60? \\ \hline 17 & 0 & What is the value in cell T61? \\ \hline \end{tabular} \begin{tabular}{|l|r|r|l|l|l|} \hline & \multicolumn{1}{|l|}{ Big } & \multicolumn{1}{l|}{ Little } & dr & Cr & Consol. \\ \hline Sales & 370000 & 280000 & & & \\ \hline Cost of goods sold & 220000 & 160000 & & & \\ \hline Depreciation expense & 40000 & 30000 & & & \\ \hline Other expenses & 50000 & 60000 & & & \\ \hline Investment income & & & & & \\ \hline Consolidated net income & & 30000 & & & \\ \hline Less: Income to NC Interest & & & & & \\ \hline Income to controlling interest & & & & & \\ \hline & & & & & \\ \hline Beginning R/E & & & & & \\ \hline Add: Income & & 30000 & & & \\ \hline Less: Dividends & 20000 & 15000 & & & \\ \hline Ending R/E & & & & & \\ \hline & & & & & \\ \hline Cash & 40000 & 30000 & & & \\ \hline Receivables & 45000 & 35000 & & & \\ \hline Inventory & 50000 & 35000 & & & \\ \hline Investment in Little & 324100 & & & & \\ \hline Land & 60000 & 60000 & & & \\ \hline Equipment, net & 180000 & 190000 & & & \\ \hline Customer list & & & & & \\ \hline Patents & 20000 & 10000 & & & \\ \hline Goodwill & & & & & \\ \hline Other assets & 172500 & 215000 & & & \\ \hline & & & & & \\ \hline Accounts payable & 40000 & 50000 & & & \\ \hline Bonds payable & 300000 & 150000 & & & \\ \hline Common Stock & 200000 & 100000 & & & \\ \hline Retained earnings & & & & \\ \hline Non-controlling interest & & & & & \\ \hline \end{tabular} January 1, 2022 \begin{tabular}{|l|r|r|l|l|l|} \hline & \multicolumn{1}{|l|}{ Big } & \multicolumn{1}{l|}{ Little } & dr & cr & Consol. \\ \hline Cash & 30000 & 20000 & & & 50000 \\ \hline Receivables & 35000 & 30000 & & & \\ \hline Inventory & 45000 & 50000 & & & \\ \hline Investment in Little & 301000 & 0 & & & \\ \hline Land & 60000 & 60000 & & & \\ \hline Equipment, net & 260000 & 250000 & & & \\ \hline Customer list & & & & & \\ \hline Patents & 30000 & 20000 & & & \\ \hline Goodwill & & & & & \\ \hline Other assets & 20000 & 70000 & & & \\ \hline & & & & & \\ \hline Accounts payable & 60000 & 50000 & & & \\ \hline Bonds payable & 300000 & 150000 & & & \\ \hline Common Stock & 200000 & 100000 & & & \\ \hline Retained earnings & 221000 & 200000 & & & \\ \hline NC Interest & & & & & \\ \hline \end{tabular}
