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consolidated problem Consolidation Problem On January 1, 20x1, Peanut acquired 80% of Salt for $ 200,000. On this date, Salt had owners' equity of $
consolidated problem
Consolidation Problem On January 1, 20x1, Peanut acquired 80% of Salt for $ 200,000. On this date, Salt had owners' equity of $ 200,000 (including Retained earnings of $ 100,000). Any excess cost over book value is attributable to inventory (worth $ 12,500 over book value) equipment (worth $ 25,000 over book value, with a remaining life of 4 years) and to goodwill. On January 1, 20x2, Peanut held merchandise acquired from Salt for $ 20,000. During 20x2, Salt sold merchandise to Peanut for $ 40,000, $ 10,000 of which is still held by Peanut on December 31, 20x2. Salt's usual gross profit is 50% On January 1, 20x1, Peanut sold equipment to Salt at a gain of $ 15,000. Depreciation is computed using the straight line method over 5 years. This is the trial balance for the two companies on December 31, 20x2 Inventory Other Current Assets Investment in Salt Other Investments Land Bldg and Equip (net) Other intangible assets Current Liabilities Bonds Payable Other Long term Liabilities Common Stock APIC RE (1/1) Sales COGS Operating expenses Income from Salt Dividends declared Peanut 130,000 241,000 200,000 20,000 140,000 255,000 150,000 200,000 200,000 100,000 280,000 600,000 350,000 150,000 16,000 60,000 Provide consolidated financial statements for 20x2. Salt 50,000 235,000 80,000 170,000 20,000 70,000 100,000 50,000 50,000 50,000 150,000 315,000 150,000 60,000 20,000Step by Step Solution
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