I have the following cases, do you think you can help me with them?

Value Added Accounting Practices in Strategic Business Decisions Case 3 Fall 2016 Names Cristina Navarro Amelia Estrada Section: Points: Case 3.1 - 15 points Case 3.2 - 25 points Case 3.3 - 20 points Total (60 points) Case 3.1 Non-controlling interests On January 1, 2011, Peres Company purchased 80% of the common stock of Soap Company for $308,000. On this date, Soap has common stock, APIC, and RE of $50,000, $100,000, and $150,000, respectively. Net Income and Dividends for two years for Soap Company are as follows: Net Income Dividends $ $ 2011 60,000 20,000 $ $ 2012 90,000 30,000 On January 1, 2011, the only undervalued tangible assets of Soap are inventory and the building. Inventory, for which FIFO is used, is worth $10,000 more than cost. The inventory is sold in 2011. The building, which is worth $25,000 more than book value, has a remaining life of 10 years, and straight-line depreciation is used. The remaining excess of cost over book value is attributable to goodwill. The trial balances for Peres and Soap are as follows: Inventory, December 31 Other Current Assets Investment in Soap Land Buildings and Equipment, net Goodwill Other Intangibles Current Liabilities Bond Payable Other Long-Term Liabilities Common Stock APIC RE Net Sales COGS Operating expenses Equity in investee income Dividend Declared Peres Company 100,000 Soap Company 50,000 148,000 ? 50,000 250,000 180,000 20,000 (120,000) (200,000) (200,000) (100,000) (204,000) (520,000) 300,000 120,000 ? 50,000 50,000 260,000 (40,000) (100,000) (50,000) (100,000) (190,000) (450,000) 260,000 100,000 30,000 Required: 1. Determine the Goodwill assigned to Non-controlling interest at the acquisition date (2 points). 2. Find the balance in the Equity in investee income and Investment accounts if Peres accounts for its investment using the equity method (3 points). 3. Calculate the balance of NCI at December 31, 2012. Provide detail calculations (5 points). 4. Complete a consolidated worksheet as of December 31, 2012. (5 points). Case 3.2 Intraperiod Purchase Alpha Company purchased 95% of the common stock of Beta Company on May 1, 2013, for a cash payment of $515,000. December 31, 2013, trial balances for Alpha and Beta were: Alpha Beta December 31, 2013 December 31, 2013 Current Assets 352,600 179,200 Investment in Beta 549,845 BALANCE SHEET Property and Equip ment Total Assets 1,334,000 562,000 2,236,445 741,200 270,240 124,000 60,000 Common Stock ($ 10 par) 1,000,000 200,000 Other Contributed Capital Account and Notes Payable Dividend Payable 364,000 90,000 Treasury Stock at Cost, 500 shares R/E January 1, 2013 315,360 (32,000) 209,200 Net Income 286,845 150,000 0 (60,000) Dividend Declared Total Liabilities + Equity 741,200 2,236,445 INCOME STATEMENT Sales Alpha 2013 Beta 2013 1,940,000 976,000 Cost of Goods Sold Other Expenses Equity in Subsidiary Income Net Income (1,261,000) (484,000) 91,845 286,845 (584,000) (242,000) 150,000 Beta Company declared a $60,000 cash dividend on December 20, 2013, payable on January 10, 2014, to stockholders of record on December 31, 2013. Alpha Company recognized the dividend on its declaration date. Any difference between book value and the value implied by the purchase price relates to subsidiary equipment with 5-year remaining life, included in property and equipment. Revenues and expenses are distributed evenly through the year Required: 1. Calculate the balance of NCI at December 31, 2013. Provide detail calculations (5 points). 2. Complete a consolidated worksheet for Alpha Company and its subsidiary Beta Company as of December 31, 2013. Prepare supporting amortization schedules (20 points). Case 3.3 Step Acquisitions On January 1, 2012, Porter Company bought a 20% interest in Salem Company for $275,000. Any difference between book value and the value implied by the price paid relates to the investee's inventory (turnover 1 year). During 2012, Salem reported net income of $110,000 and paid cash dividends of $33,000. On January, 1 2013, Porter acquired an additional 70% by $1,347,500 cash. The consideration transferred by Porter in its second acquisition of Salem represents the best available evidence for measuring the fair value of Salem Company at January 1, 2013. Also, as of January 1, 2013, Porter assessed a $440,000 value to an unrecorded customer contract recently negotiated by Salem. The customer contract is anticipated to have a remaining life of 4-years. Salem's other assets and liabilities were judged to have fair values equal to their book values. Porter elects to continue applying the equity method to this investment for internal reporting purposes. At December 31, 2013, the following financial information is available for consolidation: Porter Salem December 31, 2013 December 31, 2013 316,800 594,000 BALANCE SHEET Current Assets Investment in Salem Company Property, plant, and equipment ? 0 908,600 649,000 Patented Technology Total Assets 935,000 407,000 1,430,000 990,000 99,000 550,000 APIC 198,000 220,000 R/E January 1, 2013 Net Income 942,700 660,000 165,000 ? 1,650,000 Liabilities Common Stock ? Dividend Paid Total Liabilities + Equity (154,000) (44,000) 1,650,000 ? INCOME STATEMENT Revenue Operating Expenses Income in Salem's earning Gain (Loss) on revaluation of Investment IN Salem to fair value Net Income Porter 2013 1,024,100 (676,500) ? Salem 2013 418,000 (253,000) ? ? 165,000 Required: 1. Calculate the following amounts on Porter pre-consolidation 2013 statement (6 points) a. Investment in Salem b. Income in Salem's earnings c. Gain (Loss) on Revaluation of Investment in Salem to fair value 2. Calculate the balance of NCI at December 31, 2013. Provide detail calculations (2 points). 3. Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2013 (12 points)