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i. Determine the consolidation balances for these two companies. Please help with the NCI in B 12/31 Pitino acquired 90 percent of Brey's outstanding shares
i. Determine the consolidation balances for these two companies.
Please help with the NCI in B 12/31
Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, in exchange for $414,000 in cash. The subsidiary's stockholders' equity accounts totaled $398,000 and the noncontrolling interest had a fair value of $46,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $29,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (four-year remaining life). Brey reported net income from its own operations of $72,000 in 2016 and $88,000 in 2017. Brey declared dividends of $23,000 in 2016 and $27,000 in 2017 Inventory Remaining at Year-End (at transfer price) $ 33,000 45,000 75,000 Transfer Price Cost to Brey $ 77,000 96,250 140,000 to Pitino $ 155,000 175,000 200,000 Year 2016 2017 2018 At December 31, 2018, Pitino owes Brey $24,000 for inventory acquired during the period. The following separate account balances are for these two companies for December 31, 2018, and the year then ended. Note: Parentheses indicate a credit balance. Pitino Brey $ (406,000) 217,000 74,000 $ (878,000) 523,000 186,200 (91,440) (260, 240) Sales revenues Cost of goods sold Expenses Equity in earnings of Brey $(115,000) Net income (504,000) $(294,000) (260,240) 137,000 $ (627,240) $(382,000) Retained earnings, 1/1/18 Net income (above) (115,000) 27,000 Dividends declared Retained earnings, 12/31/18 154,000 $ $106,000 176,000 Cash and receivables Inventory Investment in Brey Land, buildings, and equipment (net) 295,000 541,845 972,000 $1,962,845 336,000 618,000 Total assets (780,605) (22,000) (555,000) (627,240) $(1,962,845) $ (618,000) Liabilities (214,000) (382,000) Common stock Retained earnings, 12/31/18 Total liabilities and equity Consolidated Balance $ Sales revenues 1,084,000 Cost of goods sold 542,250 Expenses Equity in earnings of Brey Noncontrolling interest in consolidated net income Consolidated net income to parent $ 271,350 10,160 260,240 Retained earnings, 1/1 504,000 Dividends declared 137,000 Retained earnings, 12/31 627,240 Cash and receivables Inventory Investment in Brey 236,000 448,500 0 Land, buildings, and equipment Patented technology Total Assets $ 1,328,300 8,250 $ 2,021,050 $ 778,605 Liabilities 59,650X Noncontrolling interest in Brey, 12/31 Common Stock Retained earnings, 12/31 555,000 627,240 Total liabilities and stockholders' equity EF EA EA EA GA A EA EA A EA GAStep by Step Solution
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