F. Present all consolidation entries that would appear in a three-part consolidation worksheet as of December 31, 20X7. [ACC-405-02]

On December 31, 20X7, trial balances for Posey and Stargell appeared as follows: $ S Posey Company Debit Credit 49,500 121,500 317,000 1,243,800 985,000 Stargell Corporation Debit Credit 39,000 90,100 364,900 Item Cash Current Receivables Inventory Investment in Stargell Stock Investment in Stargell Bonds Investment in Posey Bonds Land Buildings and Equipment Cost of Goods Sold Depreciation & Amortization Other Expenses Dividends Declared Accumulated Depreciation Current Payables Bonds Payable Premium on Bonds Payable Common Stock Premium on Common Stock Retained Earnings, January 1 Sales Other Income Income from Stargell Corp. Total 1,241,000 2,940,000 1,829,000 184,000 632,000 61,000 200,000 518,000 1,915,000 426,000 65,000 206,000 51,000 $ $ 1,050,000 699,190 200,000 910,000 610,000 2,848,950 3,010,000 143,000 132,660 9,603,800 597,000 213,000 1,000,000 3,000 487,000 267,000 457,000 801,000 50,000 $ 9,603,800 $ $ 3,875,000 $ 3,875,000 M 3 Required: e. Compute the gain or loss on the constructive retirement of Stargell's bonds that should 4 a. Compute the amount of the goodwill as of January 1, 20x7. Gain $24,000 Goodwill at acquisition $54,000 Gain on constructive retirement of Stargell's bonds: Goodwill as of January 1, 20X7: original proceeds from issuance of Stargell bonc 1,010,000 *FV of consideration given by 1,116,900 Premium amortized to Jan 1, 20X7 Posey *FV of non controlling interest at 124,100 acquisition 6,000 TOTAL 1,241,000 Book Value of bonds at constructive retirement 1,004,000 Book value net assets at acquisition 1,217,000 price paid for Stargell bonds by Posey 980,000 differential at acquisition 24,000 Gain on constructive retirement of Stargell's bon 24,000 -4 increase in FV of land 30,000 Goodwill at acquisition 54,000 c. Compute the income that should be assigned to the noncontrolling interest in the 20X74 b. Compute the balance of Posey's Investment in Stargell Stock account as of January 1, 7 20x7. (Do not round your intermediate calculations. Round your final answer to nearest Income to noncontrolling interest $15,031 9 Balance in investment $18,000 Stargell's 20X7 net income* 154,000 Add 2016 intercompany profit realized in 20X7 4,154 Stargell stockholders' equity, constructive gain on retirement of bonds 21,000 22 January 1, 20X7: common stock 487,000 Less unrealized intercompany profit on 20X7 transfer (3,846) premium on common stock 267,000 impairment of goodwill 25,000 retained earnings 407,000 subsidary income 150,308 stockholders equity Jan, 1 20X7 1,161,000 noncontrolling interest share % Posey ownership share 82,800 Income to noncontrolling interest 15,031 8 Book value of share hold by Posey 1,243,800 Differential at Jan, 120X7 82,800 Net income calculations * Inventory sale defferred 1,308,600 sales 801,000 Balance in Investment in Stargell Stock account, other income 50,000 January 1, 20X7 18,000 total revenue 851,000 expenses COGS 426,000 other expenses 206,000 56 31, 20X6. (Do not round your intermediate calculations. Round your final answer to nearest who depreciation and amorization 65,000 total expenses 697,000 8 Total noncontrolling interest Net income 154,000 20 10 min -0 Total noncontrolling interest, December 31, 20x6: Stargell's stockholders' equity, -1 December 31, 20X6 Total noncontrolling interest, -8 December 31, 20X6 Overview You are a financial accountant for Posey Company tasked with preparing consolidation documentation at year end. You have the following information: December 31, 20X5 Posey Company acquired 90% of Stargell Corporation's outstanding common stock for $1,116,900. On that date: The fair value of the noncontrolling interest was $124,100; Stargell reported common stock outstanding of $487,000, premium on common stock of $267,000, and retained earnings of $407,000; the book values and fair values of Stargell's assets and liabilities were equal except for land, which was worth $30,000 more than its book value. On April 1, 20X6 Posey issued at par $200,000 of 10% bonds directly to Stargell; interest on the bonds is payable March 31 and September 30. On January 2, 20X7 Posey purchased all of Stargell's outstanding 10-year, 12% bonds from an unrelated institutional investor at 98. The bonds originally had been issued on January 2, 20x1, for 101. Interest on the bonds is payable December 31 and June 30. Since the date it was acquired by Posey Stargell has sold inventory to Posey on a regular basis. The amount of such intercompany sales totaled $67,000 in 20X6 and $83,000 in 20X7, including a 30% gross profit. All inventory transferred in 20X6 had been resold by December 31, 20X6, except inventory for which Posey had paid $18,000 and did not resell until January 20x7. All inventory transferred in 20x7 had been resold at December 31, 20X7, except merchandise for which Posey had paid $16,667. As of December 31, 20X7 . Stargell had declared but not yet paid its fourth quarter dividend of $12,750. Both Posey and Stargell use straight-line depreciation and amortization, including the amortization of bond discount and premium. On December 31, 20X7, Posey's management reviewed the amount attributed to goodwill as a result of its purchase of Stargell common stock and concluded that an impairment loss in the amount of $25,000 had occurred during 20X7 and should be shared proportionately between the controlling and noncontrolling interests. Posey uses the fully adjusted equity method to account for its investment in Stargell. On December 31, 20X7, trial balances for Posey and Stargell appeared as follows: $ S Posey Company Debit Credit 49,500 121,500 317,000 1,243,800 985,000 Stargell Corporation Debit Credit 39,000 90,100 364,900 Item Cash Current Receivables Inventory Investment in Stargell Stock Investment in Stargell Bonds Investment in Posey Bonds Land Buildings and Equipment Cost of Goods Sold Depreciation & Amortization Other Expenses Dividends Declared Accumulated Depreciation Current Payables Bonds Payable Premium on Bonds Payable Common Stock Premium on Common Stock Retained Earnings, January 1 Sales Other Income Income from Stargell Corp. Total 1,241,000 2,940,000 1,829,000 184,000 632,000 61,000 200,000 518,000 1,915,000 426,000 65,000 206,000 51,000 $ $ 1,050,000 699,190 200,000 910,000 610,000 2,848,950 3,010,000 143,000 132,660 9,603,800 597,000 213,000 1,000,000 3,000 487,000 267,000 457,000 801,000 50,000 $ 9,603,800 $ $ 3,875,000 $ 3,875,000 M 3 Required: e. Compute the gain or loss on the constructive retirement of Stargell's bonds that should 4 a. Compute the amount of the goodwill as of January 1, 20x7. Gain $24,000 Goodwill at acquisition $54,000 Gain on constructive retirement of Stargell's bonds: Goodwill as of January 1, 20X7: original proceeds from issuance of Stargell bonc 1,010,000 *FV of consideration given by 1,116,900 Premium amortized to Jan 1, 20X7 Posey *FV of non controlling interest at 124,100 acquisition 6,000 TOTAL 1,241,000 Book Value of bonds at constructive retirement 1,004,000 Book value net assets at acquisition 1,217,000 price paid for Stargell bonds by Posey 980,000 differential at acquisition 24,000 Gain on constructive retirement of Stargell's bon 24,000 -4 increase in FV of land 30,000 Goodwill at acquisition 54,000 c. Compute the income that should be assigned to the noncontrolling interest in the 20X74 b. Compute the balance of Posey's Investment in Stargell Stock account as of January 1, 7 20x7. (Do not round your intermediate calculations. Round your final answer to nearest Income to noncontrolling interest $15,031 9 Balance in investment $18,000 Stargell's 20X7 net income* 154,000 Add 2016 intercompany profit realized in 20X7 4,154 Stargell stockholders' equity, constructive gain on retirement of bonds 21,000 22 January 1, 20X7: common stock 487,000 Less unrealized intercompany profit on 20X7 transfer (3,846) premium on common stock 267,000 impairment of goodwill 25,000 retained earnings 407,000 subsidary income 150,308 stockholders equity Jan, 1 20X7 1,161,000 noncontrolling interest share % Posey ownership share 82,800 Income to noncontrolling interest 15,031 8 Book value of share hold by Posey 1,243,800 Differential at Jan, 120X7 82,800 Net income calculations * Inventory sale defferred 1,308,600 sales 801,000 Balance in Investment in Stargell Stock account, other income 50,000 January 1, 20X7 18,000 total revenue 851,000 expenses COGS 426,000 other expenses 206,000 56 31, 20X6. (Do not round your intermediate calculations. Round your final answer to nearest who depreciation and amorization 65,000 total expenses 697,000 8 Total noncontrolling interest Net income 154,000 20 10 min -0 Total noncontrolling interest, December 31, 20x6: Stargell's stockholders' equity, -1 December 31, 20X6 Total noncontrolling interest, -8 December 31, 20X6 Overview You are a financial accountant for Posey Company tasked with preparing consolidation documentation at year end. You have the following information: December 31, 20X5 Posey Company acquired 90% of Stargell Corporation's outstanding common stock for $1,116,900. On that date: The fair value of the noncontrolling interest was $124,100; Stargell reported common stock outstanding of $487,000, premium on common stock of $267,000, and retained earnings of $407,000; the book values and fair values of Stargell's assets and liabilities were equal except for land, which was worth $30,000 more than its book value. On April 1, 20X6 Posey issued at par $200,000 of 10% bonds directly to Stargell; interest on the bonds is payable March 31 and September 30. On January 2, 20X7 Posey purchased all of Stargell's outstanding 10-year, 12% bonds from an unrelated institutional investor at 98. The bonds originally had been issued on January 2, 20x1, for 101. Interest on the bonds is payable December 31 and June 30. Since the date it was acquired by Posey Stargell has sold inventory to Posey on a regular basis. The amount of such intercompany sales totaled $67,000 in 20X6 and $83,000 in 20X7, including a 30% gross profit. All inventory transferred in 20X6 had been resold by December 31, 20X6, except inventory for which Posey had paid $18,000 and did not resell until January 20x7. All inventory transferred in 20x7 had been resold at December 31, 20X7, except merchandise for which Posey had paid $16,667. As of December 31, 20X7 . Stargell had declared but not yet paid its fourth quarter dividend of $12,750. Both Posey and Stargell use straight-line depreciation and amortization, including the amortization of bond discount and premium. On December 31, 20X7, Posey's management reviewed the amount attributed to goodwill as a result of its purchase of Stargell common stock and concluded that an impairment loss in the amount of $25,000 had occurred during 20X7 and should be shared proportionately between the controlling and noncontrolling interests. Posey uses the fully adjusted equity method to account for its investment in Stargell