Book Print O nome sedot 15.00 PO Consolidation spreadsheet for continuous sale of inventory Equity method Assume that a parent company acquired a subsidiary on January 2013. The purchase price was $500.000 milion in excess of the suburys book of Scholters Equityinen date, and that excess was assigned to the fing AAP asset Original Original AAPA Amen Life beans Property tantando 100.000 20 Cust 10 Royayartment 128.000 10 Goodwill 100,000 550.000 The MP assets with a definite useful life have been more as part of the parents equity method accounting The Goodwill has been tested for me and is not been found to be impared Assume that the parent company sets tvertory to its wholly owned subsidiary. The subsidiary citiemately, sells the inventory to cunemers ovende of the commodated you. You are conced the following data for the years ending 2015 and 2016 Gross Profil Remaining Inventory in unsold Receivable Sales Inventary Payable SORODO 513 2015 SE 200 $27.200 The inventory not remaining at the end of the year has been sold to unafted entities outside of the consolidated group. The parent uses the equity method to account forest tements of the parent and its subsidiary for the year ended December 31, 2016. follow in part below The inventory not remaining at the end of the year has been sold to un aliated entities outside of the consoldated group. The parentes the equity method to account for its fruity investment The financial statements of the parent and its subsidiary for the year ended December 31, 2016, follow in part d below a show the computation to yield the pre-consolidation 567.837 income loss from subsidiary reported by the parent dnne 2016. He negative signs with answers when appropriate Net income of subsidiary . Plus Didends Les Equity investment AAP depreciation income from Subdary = 0 D b. Show the computation to yield the Equity Investment balance of $997,989 reported by the parent at December 31, 2016. Hinc Use negative signs with answers when appropriate Common stock APIC Retained earning BOY namored AAP BOY deferred profit Income (loss from subsidiary Dividends Equity investment 0 D O 0 c. Prepare the consolidation entries for the year ended December 31, 2016 Consolidation Worksheet Description Debit Credit 10) 0 0 Dividends 0 0 . 0 0 (E) Common stock 0 0 APIC 0 0 0 0 0 IA) PPE net 0 0 Customer list 0 Royalty agreement 0 0 O o 000 0 0 [D) PPE net Customer list OOOOOOO 0 0 [cogs) 0 044 0 To recognize deferred profit on prior year's sale [isales [cogs) OOOOOO To defer gross profit on the intercompany sale ) 44) 0 0 s when appropriate income statement UNTER 57810 Good to C.000 0 1000 3110 7, 10. (2016) 14.537 3620 10 0 02.1954 1550 4.53 1000 1041 14.51 12.617161 54 IC 0 0 1 income Open Nerincome Statement of retained in BOY Net.com Dividends FOY med en Balance sheet A ca Accounts receivable wiary PE Customers Byty greement Godwill County investment SAAD 12510 S160 56 347.70 2334 4.00 1 . 0 3333 0 0 0 LO 9 0 0 0 557,92 Drop 0 17.052 1.09,771 Liabilities and stocolders equity Accounts payable 527313 $93459 Day Our current oblite 0221 12 Long-term sabes 2.500.000 2000 Commonsta 714496 200 JEL APC 530955 6019 Bendearing 17.09.1852 51.00 G 0 0
