Question
Can someone please help me with this? Thank you very much!!!! I need the Consolidated Balance amounts for the worksheet for the following: 1. Total
Can someone please help me with this? Thank you very much!!!! I need the Consolidated Balance amounts for the worksheet for the following:
1. Total assets
2. Noncontrolling interest in subsidiary companies
3. Total Liabilities & Equity
Here is the problem given:
House Corporation has been operating profitably since its creation in 1960. At the beginning of 2012, House acquired a 70 percent ownership in Wilson Company. At the acquisition date, House prepared the following fair-value allocation schedule:
Consideration transferred for 70% interest in WIlson ... $707,000
Fair value of the 30% noncontrolling interest .... $303,000
-------------------------
Wilson business fair value .... $1,010,000
Wilson book value ............ 790,000
--------------------------------
Excess fair value over book value ................. $220,000
Assignments to adjust Wilson's assets to fair value:
To buildings (20-year remaining life) ......... $60,000
To equipment (4-year remaining life)...........$(20,000)
To franchises (10-year remaining life)........$40,000
To goodwill (indefinite life)...........................................80,000
-----------------
$140,000
House regularly buys inventory from WIlson at a markup of 25 percent more than cost. House's purchases during 2012 and 2013 and related ending inventory balances follow:
Year Intra-Entity Purchase Remaining Intra-Entity Inventory - End of Year (at transfer price)
2012 $120,000 $40,000
2013 150,000 60,000
On January 1, 2014, House and Wilson acted together as co-acquirers of 80 percent of Cuddy Company's outstanding common stock. The total price of these shares was $240,000, indicating neither goodwill nor other specific fair-value allocaitons. Each company put up one-half of the consideration transferred. During 2014, House acquired additional inventory from Wilson at a price of $200,000. Of this merchandise, 45 percent is still held at year-end. Using the three companies' following financial records for 2014, prepare a consolidation worksheet. The partial equity method based on separate company incomes has been applied to each investment.
House Corporation Wilson Company Cuddy Company
Sales and other revenues .................................................................. $(900,000) $ (700,000) $(300,000)
Cost of goods sold.............................................................................. 551,000 300,000 140,000
Operating expenses........................................................................... 219,000 270,000 90,000
Income of Wilson Company............................................................... (91,000) -0- -0-
Income of Cuddy Company................................................................. (28,000) (28,000) -0-
------------------ --------------------- ----------------------
Net income......................................................................................... $ (249,000) $ (158,000) $ (70,000)
Retained earnings, 1/1/14................................................................... $ (820,000) $ (590,000) $ (150,000)
Net income (above)............................................................................ $ (249,000) $ (158,000) $ (70,000)
--------------------- ---------------------- ----------------------
Dividends declared............................................................................. 100,000 96,000 50,000
Retained earnings, 12/31/14........................................................... $ (969,000) $ (652,000) $ (170,000)
-------------------- ---------------------- ----------------------
Cash and receivables...................................................................... $ 220,000 $334,000 $ 67,000
Inventory.......................................................................................... $390,200 $320,000 $103,000
Investment in Wilson Company....................................................... 807,800 -0- -0-
Investment in Cuddy Company....................................................... 128,000 128,000 -0-
Buildings.......................................................................................... 385,000 320,000 144,000
Equipment........................................................................................ 310,000 130,000 88,000
Land................................................................................................. 180,000 300,000 16,000
------------------ ------------------ --------------------
Total assets....................................................................................... $2,421,000 $1,532,000 $418,000
------------------ -------------------- --------------------
Liabilities............................................................................................. $ (632,000) $ (570,000) $ (98,000)
Common stock.................................................................................... (820,000) (310,000) (150,000)
Retained earnings, 12/31/14............................................................... (969,000) (652,000) (170,000)
------------------------- ------------------------- -----------------------
Total liabilities and equities.................................................................. $(2,421,000) $(1,532,000) $(418,000)
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