Question
GAGA Company and Little Bieber Company had the following balance sheets on January 1, 2015 GAGA Little Bieber Cash 2,000,000 40,000 Inventory 1,000,000 90,000 Equipment
- GAGA Company and Little Bieber Company had the following balance sheets on January 1, 2015
GAGA Little Bieber
Cash 2,000,000 40,000
Inventory 1,000,000 90,000
Equipment 2,000,000 500,000
a/d equip (1,000,000) (200,000)
total assets 4,000,000 430,000
accts payable 1,000,000 20,000
common stock 2,000,000 10,000
retained earnings 1,000,000 400,000
On January 2nd GAGA purchased 80% of Little Bieber from Little Biebers stockholders for $750,000. At that time Little Biebers equipment was worth $400,000 with all other assets and liabilities having a book value equal to their fair market value.
REQUIRED;
- MAKE THE JOURNAL ENTRY GAGA MAKES WHEN IT BUYS THE 80% OF LITTLE BIEBER
- MAKE THE JOURNAL ENTRY LITTLE BIEBER MAKES WHEN 80% OF ITS STOCK IS PURCHASED BY GAGA
- MAKE A CONSOLIDATED BALANCE SHEET ON JANUARY 2ND (DONT FORGET GAGA SPENT $750,000 )
- MAKE THE NECESSARY ELIMINATION ENTRIES
- THIS IS A CONTINUATION OF PROBLEM 2. IT IS NOW DECEMBER 31, 2015 AND GAGA AND LITTLE BIEBER HAVE THE FOLLOWING FINANCIAL STATEMENTS
GAGA LITTLE BIEBER
SALES 900,000 200,000
COST GOODS SOLD 400,000 90,000
GROSS PROFIT 500,000 110,000
DEPRECIATION 200000 50000
OPERATING EXP 200,000 20000
INVEST INC A 0
INCOME B 40,000
NOTE THE EQUIPMENT HAD A 10 YEAR LIFE WHEN ACQUIRED WITH NO SALVAGE VALUE.
GAGA LITTLE BIEBER
CASH 750000 120,000
INVENTORY 1,000,000 90,000
EQUIPMENT 2,000,000 500,000
A/D EQUIP (1,200,000) (250,000)
INVESTMENT C 0
TOTAL ASSETS D 460,000
A/P 1,000,000 20,000
COMMON STOCK 2,000,000 10,000
RETAINED EARNINGS E 430,000
NOTE: YOU MAY CHOOSE ANY OF THE 3 METHODS (INITIAL VALUE, PARTIAL EQUITY OR FULL EQUITY) FOR GAGAS INVESTMENT IN LITTLE BIEBER BUT YOU MUST TELL ME WHICH METHOD YOU ARE USING
REQUIRED:
- FILL IN THE MISSING LETTERS A THROUGH E ON GAGAS FINANCIAL STATEMENTS
- RECORD THE JOURNAL ENTRIES GAGA MADE DURING THE YEAR DUE TO ITS INVESTMENT IN LITTLE BIEBER
- PREPARE THE NECESSARY WORKSHEET ENTRIES NEEDED FOR THE CONSOLIDATION
- PREPARE A CONSOLIDATED INCOME STATEMENT
- PREPARE A CONSOLIDATED BALANCE SHEET(HINT DONT FORGET ABOUT DIVIDENDS)
- GAGA Company and Little Bieber Company had the following balance sheets on January 1, 2015
GAGA Little Bieber
Cash 2,000,000 40,000
Inventory 1,000,000 90,000
Equipment 2,000,000 500,000
a/d equip (1,000,000) (200,000)
total assets 4,000,000 430,000
accts payable 1,000,000 20,000
common stock 2,000,000 10,000
retained earnings 1,000,000 400,000
On January 2nd GAGA purchased 80% of Little Bieber from Little Biebers stockholders for $750,000. At that time Little Biebers equipment was worth $400,000 with all other assets and liabilities having a book value equal to their fair market value.
REQUIRED;
- MAKE THE JOURNAL ENTRY GAGA MAKES WHEN IT BUYS THE 80% OF LITTLE BIEBER
- MAKE THE JOURNAL ENTRY LITTLE BIEBER MAKES WHEN 80% OF ITS STOCK IS PURCHASED BY GAGA
- MAKE A CONSOLIDATED BALANCE SHEET ON JANUARY 2ND (DONT FORGET GAGA SPENT $750,000 )
- MAKE THE NECESSARY ELIMINATION ENTRIES
- THIS IS A CONTINUATION OF PROBLEM 2. IT IS NOW DECEMBER 31, 2015 AND GAGA AND LITTLE BIEBER HAVE THE FOLLOWING FINANCIAL STATEMENTS
GAGA LITTLE BIEBER
SALES 900,000 200,000
COST GOODS SOLD 400,000 90,000
GROSS PROFIT 500,000 110,000
DEPRECIATION 200000 50000
OPERATING EXP 200,000 20000
INVEST INC A 0
INCOME B 40,000
NOTE THE EQUIPMENT HAD A 10 YEAR LIFE WHEN ACQUIRED WITH NO SALVAGE VALUE.
GAGA LITTLE BIEBER
CASH 750000 120,000
INVENTORY 1,000,000 90,000
EQUIPMENT 2,000,000 500,000
A/D EQUIP (1,200,000) (250,000)
INVESTMENT C 0
TOTAL ASSETS D 460,000
A/P 1,000,000 20,000
COMMON STOCK 2,000,000 10,000
RETAINED EARNINGS E 430,000
NOTE: YOU MAY CHOOSE ANY OF THE 3 METHODS (INITIAL VALUE, PARTIAL EQUITY OR FULL EQUITY) FOR GAGAS INVESTMENT IN LITTLE BIEBER BUT YOU MUST TELL ME WHICH METHOD YOU ARE USING
REQUIRED:
- FILL IN THE MISSING LETTERS A THROUGH E ON GAGAS FINANCIAL STATEMENTS
- RECORD THE JOURNAL ENTRIES GAGA MADE DURING THE YEAR DUE TO ITS INVESTMENT IN LITTLE BIEBER
- PREPARE THE NECESSARY WORKSHEET ENTRIES NEEDED FOR THE CONSOLIDATION
- PREPARE A CONSOLIDATED INCOME STATEMENT
- PREPARE A CONSOLIDATED BALANCE SHEET(HINT DONT FORGET ABOUT DIVIDENDS)
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Operations Management Processes And Supply Chains
Authors: Lee Krajewski, Naresh Malhotra, Larry Ritzman
13th Global Edition
129240986X, 978-1292409863
