Question
Excess fair value assignments Remaining Life Annual Amortization Patent 400,000 5 80,000 Goodwill 275,000 I ntra-company gross profit deferrals related to the inventory transfers. Year
Excess fair value assignments | Remaining Life | Annual Amortization | |
Patent | 400,000 | 5 | 80,000 |
Goodwill | 275,000 |
Intra-company gross profit deferrals related to the inventory transfers.
Year | Original cost to Nittle, Inc. | Transfer Price to Jet Corp. | Ending Balance at Transfer Price | Deferred Gross Profit |
2020 | $ 189,800 | $ 260,000 | $ 90,000 | $ 24,300 |
2021 | $ 238,000 | $ 340,000 | $150,000 | $45,000 |
Financial information for the year ended 12/31/21 kis presented below. The parent company has applied the equity method to record its investment in Nittle.
Account Name (number) | Jet | Nittle |
Revenue (40) | (1,940,000) | (907,000) |
Cost of goods sold (50) | 980,000 | 400,000 |
Expenses (51) | 393,904 | 221,760 |
Interest exp.-bonds (60) | 2,096 | |
Interest rev.-bond invest. (61) | (2,760) | |
Equity in income of Nittle (62) | (180,000) | |
Gain on retirement of debt (63) |
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Net income | (744,000) | (288,000) |
Retained earnings (1/1) | (3,800,000) | (490,000) |
Net income | (744,000) | (288,000) |
Dividends paid (34) | 200,000 | 40,000 |
Retained earnings (12/31) | (4,344,000) | (738,000) |
Cash (10) | 357,200 | 129,000 |
Accounts rec. (11) | 975,000 | 315,000 |
Inventory (12) | 840,000 | 781,000 |
Investment in Nittle (13) | 2,096,630 | |
Invest. in Jet bonds (14) | 23,000 | |
Buildings and Equipment (net) (15) | 2,325,000 | 963,000 |
Patent (16) | 950,000 | 127,000 |
Goodwill (17) |
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Total Assets | 7,543,830 | 2,338,000 |
Accounts pay. (20) | (450,000) | (150,000) |
Notes pay. (22) | (323,630) | (350,000) |
Bonds pay. (23) | (25,000) | |
Prem. on bonds (24) | (1,200) | |
Common stock (30) | (1,900,000) | (900,000) |
Additional PIC (31) | (500,000) | (200,000) |
Retained earnings, 12/31/18 | (4,344,000) | (738,000) |
Total liabilities and equity | (7,543,830) | (2,338,000) |
Complete the consolidation entries for the year ended December 31, 2021. The account numbers are listed on the financial information above. Use 35 for retained earnings and 39 for Non-Controlling Interest.
Complete the consolidation entries for the year ended December 31, 2021. The account numbers are listed on the financial information above. Use 35 for retained earnings and 39 for Non-Controlling Interest. Assume that Jet acquired 90% of Nittle on January 1, 2019.
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