Question
Hi I am having trouble with this question can someone help me out. On 1 January 2023, Puttup Company acquired 75% of the outstanding common
Hi I am having trouble with this question can someone help me out.
On 1 January 2023, Puttup Company acquired 75% of the outstanding common stock of Shuttup, Inc, in exchange for $843,750 cash. As of the acquisition date, Puttup estimated Shuttups total fair value to be $1,125,000, which includes the noncontrolling interest. Shuttups book value at the time of acquisition was $690,000.
Three items on Shuttups books were identified to have fair values different from their book values. The amounts are on the spreadsheet along with 31 December 2023 balances for both companies.
Puttup uses the equity method to account for its investment in Shuttup. There were no intra-entity receivables or payables outstanding at year-end.
Required: Prepare the consolidation worksheet for Puttup and Shuttup for 2023 in the spreadsheet. Use formulas as much as possible. Include the following:
- Reconciliation of fair value to book value acquired
- Amortization schedule for undervalued assets
- All required consolidation entries in general journal format. You may enter these starting on row 38 below the account balances. Identify each entry using the letter system S, A, I, D, E.
- The complete consolidation worksheet, including the noncontrolling interest. Again, identify entries S, A, I, D, E, and any others necessary in columns D and F.
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