Galvin Company purchased 100% of the outstanding stock of Goldberg, Inc., on January 1, 2023, for a purchase price of $1,250,000. At the acquisition date, Goldberg's book value consisted of common stock of $550,000 and retained earnings of $450,000. Galvin attributed the cost over book to a trademark with an estimated 20-year remaining useful life. Galvin uses the equity method to account for its investment in Goldberg.

During the next two years, Goldberg reported the following:

Year	Income	Dividends Declared	Inventory Transfers to Galvin at Transfer Price
2023	$125,000	$45,000	$275,000
2024	140,000	50,000	300,000

Goldberg sells inventory to Galvin after a markup based on a gross profit rate. At the end of 2023 and 2024, 40 percent of the current year's purchases remain in Galvin's inventory.

REQUIRED

Create an Excel spreadsheet that computes the following:

1. 1. 1. Investment in Goldberg, Inc. account as of December 31, 2024.
      2. Worksheet adjustments (consolidation journal entries) for the December 31, 2024, consolidation of Galvin and Goldberg.

Your solution should be formulated so that Goldberg's gross profit rate on sales to Galvin is treated as a variable (this requires the use of formulas in your Excel spreadsheet!). Most amounts should be formula-driven so that when you change the gross profit rate (or any other variable), all other numbers update, including the equity income, balance in the investment account, and amount of the worksheet adjustments. Use formulas everywhere you reasonably can.

Not sure where to start or what to include in your solution? You can use the Excel Case Guide for Students.xlsx Download Excel Case Guide for Students.xlsxas a template to complete the assignment. Alternatively, you can build your own Excel solution from scratch and the following are suggestions of items to include if you choose that option:

• • • Acquisition Date Allocation including the calculation of any amortization.
    • Intra-entity inventory transfers (this could be just a small table calculating the amount of unrealized intra-entity profit) - this one isn't necessary because you can embed the calculations elsewhere, but seeing it separately usually helps students, and the more detail you have, the more partial credit I can award if you make mistakes.
    • Equity Income for each year (these are needed to help arrive at the investment balance).
    • Investment in Goldberg
    • Consolidation entries
    • I also recommend having a small section somewhere in the worksheet with "given" information so that any formulas you use can pull from it (Goldberg's income and dividends, etc.)

Consolidation Project - Excel Case Study - Guide Acquisition Date Allocation Consideration transferred Goldberg Common Stock Goldberg Retained Earnings Cost over book Given Given Given Formula Intra-entity Inventory Transfers - The amounts labeled "given" are provided in the case study and will just be entered into the spreadsheet. - The cells labeled "formula" should include formulas. They can be as simple as "=H20" for the 2023 reported net income in the calculation of Equity in Goldberg Earnings. That formula is just pulling a number from somewhere else in the spreadsheet. Or, it could be more complieated and include references to other cells and have mathematical operations like the formula at the end of the consolidation entries that will calculate whether the investment account goes to zero or not